HealthSouth taps HCA exec to take over company helm

The new CEO has experience with corporate overhauls.

By Katherine Vogt, AMNews staff. May 24/31, 2004.

HealthSouth has hired a longtime hospital chain executive -- who has firsthand experience in a corporate turnaround -- to become its new leader as the outpatient services company tries to recover from a massive accounting scandal.

Jay Grinney, 53, who led a 100-hospital division of HCA Inc., was unanimously elected by HealthSouth's board to become the company's new president and chief executive officer. The move was effective May 10, a week after it was announced.

Leaders hope that Grinney's experience both with HCA and as an executive with a hospital system in Houston will help him steer HealthSouth at a critical time for the company.

"Jay has broad operating and financial experience and is recognized as one of today's outstanding leaders in the health care industry," said Interim Chair Joel C. Gordon in a written statement. "He brings with him not only a wealth of practical know-how built over a 23-year career, but also a real vision of the opportunities and challenges in today's health care industry."

Grinney replaces Robert P. May, a board member who has served as interim CEO since March 2003, when HealthSouth founder Richard Scrushy was ousted as chief executive as the accounting scandal began to unfold. May was to remain on the board.

HealthSouth has been accused by federal prosecutors of overstating earnings by $2.7 billion or more to meet Wall Street expectations. Since the scandal broke, 17 former employees have agreed to plead guilty to various criminal charges, and Scrushy is awaiting trial for fraud.