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Here's our chance: Elect business competence

  • By Matt Walsh
  • | 10:20 a.m. July 16, 2010
  • | 2 Free Articles Remaining!
  • Opinion
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For mainstream political journalists, this year's election cycle is almost a dream come true.

A billionaire California transplant who was pals with Mike Tyson is ahead of the Democratic Party's establishment candidate for the U.S. Senate nomination. A multimillionaire businessman who resigned from the CEO's post of the world's largest hospital company amid federal-fraud allegations is ahead of the Republican Party's establishment candidate for the gubernatorial nomination. And the sitting governor ditches his political party of 30 years after seeing that an underdog was going to obliterate him in the Republican primary.

The pack-dog journalists are all but frothing at the mouth.

But let's focus, for this edition, on the contest that means the most to Florida — the gubernatorial election and more specifically, the Republican race for the gubernatorial nomination.

For business owners, executives and managers, indeed for all of the people who toil in the arena of competitive free enterprise, this is what we always talk about: an opportunity to have someone with real business experience and competence serving as Florida's chief executive; an opportunity, especially, not to have yet-another career politician playing politics.

We have that in the parties' two leading candidates — Democrat Alex Sink, Florida's current CFO and the former president of NationsBank's Florida operations; and Republican Rick Scott, who served 10 years as CEO of Columbia/HCA, a company he built into the world's largest healthcare company.

With all due respect, Democrat Bud Chiles is not a factor, and Republican Bill McCollum, in spite of his 30-year career in politics and public service, is not even close to being on the same plane as Scott in real-world business and management experience and competence.

And that — Scott's business experience vs. McCollum's political experience — is the issue on which voters should be persuaded to focus. It's no contest.

Meaningful statistics

We'll concede McCollum's political experience in Congress from 1981 to 2000 makes him a seasoned veteran in the gamesmanship of politics, that slimy world of push-peddlers, payoffs and paybacks. To be sure, there is value in knowing how to maneuver through that muck.

But that expertise is exactly what has spurred on so many first-time candidates from the business world such as Scott, Florida's U.S. Senate candidate Jeff Green, physician Rand Paul in Tennessee and former CEOs Meg Whitman (Ebay) and Carly Fiorina (H-P) in California. They and we voters have looked at the past and current state of government and concluded: We can't keep electing the same, tired, hackneyed career politicians into office. Pogo would say again and again: “We have met the enemy and he is us.”

Instead of the political platitudes of “I'm going to cut waste and reduce regulations,” actions McCollum may have voted for but never executed in his career, Scott has a business record that shows he has done that and more.

(We know. We know. Everyone is focused on and somewhat queasy over the whole Medicare fraud scandal at Columbia/HCA during and after Scott's tenure there. More on that below.)

If you examine what happened in the 10 years Scott and partner Richard Rainwater acquired two underperforming hospitals in El Paso in 1987 from Hospital Corporation of America to the day Scott resigned as CEO of Columbia/HCA in 1997, here's the quick summary: Scott lowered the cost of hospital healthcare and maintained or improved quality.

Hospital inflation nationwide declined from an annual rate of 18% when Scott started in El Paso to 0.2% by 1997. Scott and Columbia/HCA did not accomplish this by themselves. But as owners and operators of the nation's largest hospital network, Columbia/HCA's operating practices caused the entire industry to become more efficient. In that vein, a 1997 Healthcare Forum Journal study reported that Columbia/HCA's hospitals recorded the lowest patient costs when compared to government-owned, church-run, not-for-profit and non-Columbia/HCA for-profit hospitals.

As for quality of care, Health Affairs magazine reported in 1997 that 36% of Columbia's 340 hospitals received “accreditation with commendation” from the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) compared with only 8.5% of the non-Columbia/HCA hospitals nationwide. Health Affairs said such accreditation is given to hospitals “that demonstrate exemplary performance as measured by the rigorous standards of the accreditation process.”

In addition, a 1996 Gallup survey reported 94% of Columbia's patients were satisfied or very satisfied with the care they received in Columbia hospitals in 1996, compared with 88% in a national sample of patients in non-Columbia hospitals.

If you put some thought to these statistics, they really are meaningful in the context of judging competence and leadership. For all of you business readers out there, you know first hand the challenges of leading and managing people and moving your company and organizations forward. Just think of all of the daily challenges you encounter in your own businesses — businesses of, say, five employees, 25 employees, 100 employees or greater. Every day, there's a new drama — someone not showing up for work; another employee losing a loved one in a tragic accident; an employee mistreating a customer; and on and on. The surprises and challenges are endless.

Now imagine being CEO of an organization that had 285,000 employees, more than 340 hospitals and was located in 37 states, the United Kingdom and Switzerland — and figuring out how to make that organization the most efficient one in the industry. Sure, Scott did not do that by himself. But competence and leadership starts at the top and emanates downward.

The Medicare fraud

Yes, competence and leadership.

This is where McCollum and his lead economic adviser, Steve Forbes of Forbes magazine, along with Florida's largest daily newspapers, are pounding Scott and his credibility. Their obvious focus is Scott's most potent business blemish: that Columbia/HCA paid $1.7 billion to the federal government (half in 2000 and half in 2003) to settle Medicare fraud claims.

Scott resigned in 1997, shortly after federal investigators raided Columbia hospitals for Medicare records.

McCollum and Forbes call this “stunning managerial incompetence.” How, they ask, can Floridians trust a man whose company operated unethically to be the governor of Florida?

Scott repeatedly says he takes responsibility for what happened. And he repeatedly notes that throughout all of the Medicare fraud investigations never did any of the investigators interview Scott or charge him with any wrongdoing.

Contrast that with what happened to Enron's Ken Lay and Jeff Skilling; HealthSouth Corp.'s Richard Scrushy; and WorldCom's Bernie Ebbers. The government charged all of them with fraud; they all were convicted and jailed. Had Scott orchestrated and approved the fraud, surely the Clinton-era federal investigatorss would have pursued him. After all, Scott also was on record opposed to Hillary Clinton's attempt to take over the U.S. health care industry.

To McCollum's charge (as well as that of Sink) of Scott's questionable trustworthiness, leadership, ethics and managerial competence, surely Scott's personal and professional history is the best predictor. We want a governor who can make government accountable the way business is accountable. Scott has proven himself at that throughout his career.

Entrepreneurial at age nine, he sold TV Guides door to door in Kansas City. As a teen, he was a fry cook and cleaned telephone booths. After serving a tour in the Navy, he and his wife bought a donut shop in Kansas City; his mother managed the day-to-day operations while Scott finished college. He put himself through Southern Methodist's law school, and at the stunningly young age of 34, he invested his and his wife's life savings of $125,000 to acquire two hospitals in, of all places, El Paso, Texas.

Over the next 10 years, Scott built a team of some of the best hospital managers and leaders in the nation. And from 1987 to 1993, Scott and his team executed 13 multimillion-dollar acquisitions, all the while managing this far-flung company so that it increased profits for shareholders and lowered the cost of healthcare for its customers.

If Rick Scott, Bill McCollum or Alex Sink walked into your boardroom to apply for a job requiring the competence to execute a turnaround in statewide operations and improved efficiencies, it wouldn't take long to decide. You would tell Scott: Get to work.


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