HealthSouth's flagship hospital confronting an uncertain future

Touted as the hospital of the future, the facility may never be completed; the financially strapped company considers selling it and two other hospitals.

By Katherine Vogt, amednews staff. May 5, 2003.

Construction crews are working to weatherproof HealthSouth's half-built "digital hospital" in Birmingham, Ala., as the embattled outpatient services giant considers selling the facility that was supposed to be a model for the world.

Work on the $300 million, 219-bed high-tech hospital slowed to a trickle this spring as HealthSouth re-evaluated its capital expenditures in the face of financial woes and an accounting scandal involving top executives. But some construction, including work on the roof, has resumed to ensure that the unfinished structure is preserved while its fate is decided. HealthSouth spokeswoman Laura Smith said the work would continue until June.

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The hospital was designed to showcase how cutting-edge technology such as electronic charts and wireless communications devices could help physicians and patients ultimately make health care less expensive and more efficient. It was due to be completed in June 2004.

But now if the right deal was reached, Smith said HealthSouth would sell the building as well as two other acute care facilities in Florida and Alabama. No potential bidders have yet emerged.

Meanwhile, the number of HealthSouth executives who have agreed to plead guilty to criminal charges in an accounting scandal has grown to at least nine. The charges stem from a federal investigation alleging that the company overstated earnings by $2.5 billion since 1997.

Richard M. Scrushy, fired as HealthSouth's chief executive on March 31, faces civil charges of insider trading from the Securities and Exchange Commission, which has accused him of being the mastermind of the company's alleged accounting fraud. No criminal charges have been brought against him.

According to published reports, Scrushy's attorneys have asserted that he was unaware of the years of accounting fraud until March 17. They have reportedly tried to lay blame for the fraud on other top HealthSouth executives.