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HealthSouth: The Wagon to Disaster

By: Aaron Beam with Chris Warner
Reviewed by: H. F. Lippincott
Wagon Publishing, 2009
$22.95, Hardcover

Aaron Beam, co-founder (in 1980) and comptroller of HealthSouth, has written an account of his involvement with CEO Richard Scrushy, who was convicted in 2006 of bribery, conspiracy, and fraud. Although Beam left the company in 2003, eventually to become a whistle blower, he too was convicted as a felon and served three months in the federal prison camp in Montgomery. Since, Beam has spoken widely at business schools about the morality of corporate finance. This book spells out the details of his rags-to-riches story—and back to rags again: Beam now operates a one-man lawn service in Lower Alabama.

According to Beam, the innovative idea behind HealthSouth was to set up a network of stand-alone wellness clinics for physical therapy and other health services to supplement regular hospitals. When the company went public in 1984, it was said to be "the largest venture capital deal ever closed in the city of Birmingham." The company was fabulously successful and its stock was the darling of Wall Street, making Scrushy a free-spending billionaire with an extravagant lifestyle.

Unfortunately, as Beam relates, the whole house of cards was erected on certifying false financial information and "cooking the books" to keep the stock price high. Beam paints Scrushy as the villain of the piece and calls him a "greedy sociopath." Jan 2010

H. F. Lippincott is a retired English teacher.

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