Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, January 10, 1993 TAG: 9301080239
SECTION: BUSINESS PAGE: B-1 EDITION: METRO
SOURCE: CHARLYNE H. McWILLIAMS STAFF WRITER
DATELINE: LENGTH: Long
HEALTHSOUTH AIMS TO SCORE WITH REHAB
In some ways, HealthSouth Rehabilitation Corp. resembles a chain of fast-food restaurants. Its menu? Physical and occupational therapies and sports medicine.The company has several locations; 141 physical rehabilitation and medical centers in 27 states, including one that opened in Roanoke last July. Like the \ fast-food industry, all of HealthSouth's facilities have similar carpet, furniture and rehab equipment. And they're accessible and convenient.
Richard Scrushy, president, chief executive officer and one of the founders of the company, doesn't mind his company being likened to a hamburger shop. However, he's quick to point out the differences.
"We're touching you," he said. "We take you from a level of being dependent on someone to a point of independence. We just don't feed you and let you go. We stay with you."
The philosophy of working with patients as closely as possible has been deeply instilled in all of HealthSouth's 7,000 employees.
"We don't believe in just giving them a list of exercises," said Michael Carney, administrator and physical therapist at the Roanoke location. "We want the patients to understand that we're partners in their recovery."
The Roanoke location opened last July after the Birmingham, Ala.-based HealthSouth bought Roanoke Orthopaedic Center on Postal Drive in Roanoke County. Patients are referred to the center by their doctors for orthopaedic rehabilitation, hand and industrial rehab and a sports medicine program that focuses on rehab and education. There are eight facilities in Virginia now, including a 200-bed medical center specializing in orthopaedic rehabilitation in Richmond.
HealthSouth has 125 out-patient facilities, which Scrushy said are the company's most cost effective facilities. It also operates 14 in-patient facilities for people who need 24-hour nursing care and four major medical centers that specialize in orthopaedic surgery.
It's easy to understand the success of a company like HealthSouth, considering the increasing interest in health care and concern about its cost. And because it offers value-meal prices, more employers, employees and insurance companies look at HealthSouth for rehab services.
The rehab programs can cost $25 a day to a $150 a day for a very complicated situation, Scrushy said.
Scrushy and four partners started the company in 1984 when they noticed a larger elderly population, the increase in sports medicine and the growing concern about injury prevention and saw the rehab market wasn't being tapped fully to provide services to these groups. Roanoke, he said, as a center of labor-intensive industries, offered the company opportunity and was an area that could benefit from HealthSouth's expertise.
"Many of the areas we go to don't have a rehab facilities," Scrushy said. He explained that if HealthSouth cannot add any value to areas where facilities exist, they don't try to move in. "It seems to be working quite well."
Gloria Reiske, client service representative at the HealthSouth of Roanoke, said they are realistic with their patients.
"It's not always that we reduce the pain," he said. "We teach them how to live with it."
Offering a limited selection of services has allowed the facilities to become experts in those fields, Scrushy said.
Work hardening is one of the programs that HealthSouth offers. A simulation of an employee's work environment is made to see how well he or she performs after the injury. Employees report to the center every day, just as they would go to work. They start with four-hour days and gradually work up to an eight-hour day with breaks.
The program last for six weeks, Reiske said. If a person isn't rehabilitated by then, they try to make arrangements for the person to have their job modified - or get a new job.
"They never leave here without a resource," she said.
HealthSouth's goal of rehabilitating employees as efficiently and getting them back to work as soon as possible has attracted the interest of many companies.
Kathleen Turner, manager of the Richmond office of Consolidated Risk Management, said that philosophy has helped companies like HealthSouth become successful.
CRM, a subsidiary of Blue Cross and Blue Shield of Virginia, is a third-party administrator for companies that insure their own employees for health costs. The company is a liaison between employees, insurers and the medical providers. The goal is to save the company money and get employees back to work.
Although it might seem that this program would cost more, Turner said, it's cheaper than paying for lost work time and rehabilitation for a 12-week period.
"It's the best plan to get people back to work," Turner said.
HealthSouth, just 9 years old, added 30 facilities last year and Scrushy said he expects to add at least that many next year. He expects to earn $600 million in gross revenues in 1992, an increase from 1991's $302.5 million. He said net revenues could reach the $400 million range, up from $225.5 million in 1991. In 10 years he sees the company as being "the choice provider and brand name in rehab."
HealthSouth's success rate has attracted employers, insurance companies and doctors, Scrushy said. The company's treatment for back injuries - which accounts for 50 percent of the work-related injuries - lasts about four weeks at $4,100 and will attract even more interest, he said. The national average for the treatment is 12-15 weeks at a cost of $12,000 to $15,000, he said.
While nationally 50 percent of people treated for back injuries go back to work, Scrushy said 90 percent of HealthSouth's patients with similar injuries return to their jobs.
"We've been a real hot item with companies in industries that are labor-intensive," he said.
Scrushy said his and other managers' experience with another rehab company taught them what was necessary to make their company work.
"We learned the do's and don'ts of building a national company," he said. "We built a strong foundation for the company," a foundation that includes the management of the business offices and their treatment of HealthSouth employees.
Because the fast-food industry never will have to deal with people on the same complicated level as the rehab industry, Scrushy said it's important to remember one thing when comparing the two:
"We're hands on," he said. "That's a different thing than buying a hamburger."
Charlyne H. McWilliams covers real estate and the health-care industry for the Roanoke Times & World-News.
Memo: CORRECTION