In 2008, I had one of those I wonder whatever happened to moments and googled my blind-from-birth, mentor and former boss, Barry Scheur. My jaw dropped when I saw the headline in Modern Healthcare, dated December 05, 2005: “HMO dreams end in court. Barry Scheur began the Oath of Louisiana with big plans; now he stands accused of fraud after the HMO’s collapse.”
Barry and several members of his Boston consulting company were hired in 1999 to straighten out the financially troubled HMO owned by five New Orleans area hospitals. They had tapped into Barry’s modus operandi of I can fix this and persuaded the state Department of Insurance to let him take over. He assumed control of it in January 2000 when the company was $75 million in debt and became the CEO. The state’s regulators were happy to have it off their potential-disaster list; meanwhile Barry’s consulting company was being paid $200,000 to $350,000 a month to manage the HMO. This high-flying, make-a-ton-of-money approach to health insurance is why I left and the part of Barry’s story that has always troubled me.
Back in Touch
I read more articles, gathered my thoughts, and called Barry that afternoon at his home and said I’d just read some upsetting news.
“Oh, Barbara. It’s so good to hear from you—almost no friends left.”
“I just wanted you to know that I’m hoping for a good outcome.”
His guilt or innocence was never discussed. We stayed in touch but the next thing I heard Barry, five years after being indicted, had lost his appeal. His conviction for wire fraud and money laundering was aided by his oldest employee who flipped for the prosecution. Barry was sentenced and served twenty months in a federal administrative security medical center (prison) in Devens, Massachusetts. After being shoved to the ground by a guard within hours there, Barry spent his first ten days in solitary confinement. He said, “I had to keep walking in the cell to keep my sanity.”
When a letter from Barry was mis-delivered to my neighbor, he handed me the envelope, saying with a smirk, “Looks like something from your pen pal.” The prison envelope was full of stickers and a large return address with prisoner number xxx visible. It was like whoever corresponded with an inmate should be chastened for their association.
After his release, Barry was divorced, and started a new life with his partner, KaeAnn, in South Carolina. You can find more about how they are doing at the end of this post.
In 2011, the year Barry was released, Rick Scott became the Governor of Florida. He had been the CEO of Columbia/HCA, a company under his direction which owned over 340 hospitals, 135 surgery centers, and 550 home-health locations. Scott had resigned in 1997, the year a federal investigation began of his company for defrauding Medicare and Medicaid on a massive scale. Part of the settlement required Columbia/HCA to plead guilty to fourteen corporate felonies, but no jail time. At the time, it was largest fine ever levied on a healthcare company.
During Scott’s 2010 governor’s race, the Miami Herald reported that Scott had said he would have immediately stopped his company from committing fraud if only “somebody had told me something was wrong.” Hard to believe his out-of-loop claim given the warnings in the company’s annual public reports to stockholders which Scott signed as president and CEO.
How ironic—Barry was sentenced to prison while Scott’s company paid the government $1.7 billion in criminal fines, civil damages, and penalties.
Scott went on to serve two terms as Florida’s governor and is now a U.S. Senator (R). He has his eyes on both Medicare and Social Security, either gutting, cutting, or privatizing the programs. He calls it his “Eleven-Point Rescue America plan.”
Scott recently said: “It’s like alcoholism. The first step of the 12 Steps is, ‘You have a problem!’ OK? We have a spending problem in this country.”
Really? The first step is: “We admitted we were powerless over alcohol . . .” How is it that being “powerless over alcohol” is at all like making sure elders live out their lives with some small measure of dignity and health? They paid into the system throughout their working lives.
And not to be outdone, here’s Jeffrey Zients – President Biden’s new Chief of Staff. Zients was previously on the board of Facebook and White House COVID Coordinator. We’re living with how that worked out.
In 2020 at the height of the pandemic, Zients’s personal wealth increased from $10.4 million to $28 million. How? Primarily through profiteering via healthcare companies he either controlled, invested in, or helped oversee. Several of them were forced to pay tens of millions in fines for surprise billing, unnecessary procedures, and Medicare and Medicaid fraud. One company was fined $150 million and when an employee went to upper management to report discrepancies, she was told to “wait to see if the government caught the error.” She was demoted and later fired.
I regret that I don’t have pictures of Scott and Zients doing a perp walk – Oh, what justice that would be. I do, however, urge you to look at what Barry Scheur and his partner, KaeAnn Rausch, are doing now. She probably saved his life and health if not his sanity while he was in prison with her visits and support. This is what starting over, using your talents in a positive way, and having a caring heart looks like:
You can also read the full article about Barry’s “rise, fall, and rise again” in The American Foundation for the Blind magazine. It’s an honest and compassionate article about much of his life. https://www.afb.org/aw/20/2/14977.
Photo credits: Ms. Justice – tingey-injury law firm, Seniors tiles – jen-theodore, Senator Scott, Jeffrey Zients, Barry and KaeAnn – from their websites.
The longer I live, the more I feel that the individual is not so much to blame – not even the worst individuals, not even the ‘best’ citizens – as the system of corruption which has grown up about us, and which rewards an honest man with a mere living and a crook with all the magnificence of our magnificent modern life. Lincoln Steffens
Injustice and corruption are everywhere. The issue I follow, Palestine-Israel, abounds, and right up front in the “newspaper of record”, the NYT. We just keep on, one step at a time. Barbara, I’m glad (and sad) to learn about the health care industry from your perspective.
I guess corruption, like violence, is a sorry feature of human nature, and I wish I knew what we could do about it, except support the investigative journalists who bring malfeasance to light, and any whistle-blowers we know of.
Corruption is everywhere. Did you see the article in the Sunday March 12 NY Times magazine about how fake the Oscars have become? The big money campaign “playbook” was invented by no less a celebrity than Harvey Weinstein back in the 80’s. It appears that the surprise expressed by many Oscar winners is likely faked. Might this affect the next TV Oscars?
Indeed. Since we only stream, I completely missed the so-called awards show. No longer my cuppa.
Here’s what I think is a small and worthy antidote to corruption – “She was demoted and later fired.” I don’t know where “she” is or who she is, but I think when she looks in the mirror she feels better about herself.
Wow – that is a stunning fact about Zients profits. The things we don’t know. Loved this article!
Wow is the word for it, Molly. He and his ilk are just the tip of the mega profit/corruption/exploitation/disregard for human life/screw the working people/and live the high life iceberg. But he’s on the tip of it and in (for now) the US seat of power. Or as it’s called by people I follow – the blob or the D.C. bubble.