BusinessTN

Few names from the past in Tennessee business circles raise hackles like that of Nashville health care executive Rick Scott. During Scott’s decade long run as the leader of Colombia/HCA Healthcare Corp., a company he co-founded in 1988 with the purchase of two Texas hospitals, Scott built a for-profit health care empire spanning 340 hospitals, 700 surgery centers, 500 home health locations and 285,000 employees. His aggressive approach to physician recruitment and penchant for buying and subsequently shuttering money-losing hospitals gained him a national reputation not just among hospital administrators, who feared him, but the public at large. In 1996, Time magazine labeled Scott one of the 25 most influential people in America. But the following year, HCA directors pushed Scott out following federal raids on Colombia/HCA offices carried out in a search for evidence of Medicare billing fraud. Co-founder Tommy Frist Jr. assumed the helm. (Scott was never charged with a crime.)

Loaded down with $300 million created from his founding equity stake in Colombia Hospital Corp., Scott headed off for corporate headquarters-rich Stamford, Connecticut, just outside of New York, where he began investing in various companies through Richard L. Scott Investments, which he runs to this day. Companies he’s backed have included America’s Health Network (known for the online broadcast of surgeries and which was eventually folded into a unit of Fox Broadcasting), CyberGaurd Corp. (a Florida-based computer security firm whose investor pool includes Metro Nashville finance director David Manning) and CBCA, Inc. (a California-based online benefits administrator). Scott also partnered with Nashville Sounds minor league baseball franchise founder Larry Schmittou in S&S Family Entertainment, a chain of bowling alleys that has a presence in Nashville.

These days, though, Scott, now 53, has placed a good portion of his eggs back in his area of expertise—health care. Through his Jacksonville, Florida-based walk-in urgent care health clinic company, Solantic, of which he is the chairman and the company’s largest investor, Scott is hoping to taste again a modicum of the national success he enjoyed with Colombia/HCA. And he has tapped the world’s largest retailer, Wal-Mart, to help make it happen. Americans love convenience. Think fast food, Seven-Elevens and 24-hour wedding chapels. Scott, along with Solantic co-founder and company president Karen Bowling, a former news television anchor who has worked with Scott since his Columbia days, has emerged as a key player nationally in the trend of so-called “minute clinics,” the “McDonalds” of health care, which are popping up in retail settings like Wal-Mart and CVS Pharmacies at a rapid rate. Each walk-in urgent care health clinic Scott establishes in a retail setting is open on weekends, weeknights, and even holidays. Diagnosing an ear infection or completing a school physical is as easy as pushing through a check out line (and doesn’t require a half-day off of work to complete.) And instead of leafing through old magazines, patients can shop while awaiting the doctor’s availability. (In Wal-Marts, restaurant style beepers allow patients to roam the store.)

More convenient than an emergency room, getting help at an urgent care clinic can also be cheaper. A general visit costs around $60 while a consultation and a single test can cost around $105. Appropriate for a retail environment, prices are posted on a wallboard in the lobby. Most major health insurance plans are accepted. Patients with more serious injuries than the clinic is set up to deal with are referred to a more traditional provider. For Wal-Mart, the concept piggybacks on the success it has had with in-store hair salons and optometry centers. Health clinics often fill spaces that once housed arcades. Chain pharmacies like CVS, as well as individual malls and supermarkets nationwide, are also increasingly offering the service.

Importantly, Scott offers something the rest of his competition in the niche does not. While other walk in urgent care providers are staffed by nurses and nurse practitioners that work under the supervision of a doctor, only Solantic clinics are staffed with board certified doctors around the clock.

Solantic also distinguishes itself in another important way—Scott himself. That an executive with national and international business credentials leads the company is a fact not lost on the powers that be at $285 billion Wal-Mart.

“We’re in Wal-Mart because of a relationship Rick has with Wal-Mart,” Bowling relates. (Scott is not alone among formerly high profile executives exploiting the big box health care niche. Michael Howe, the former CEO of Arby’s fast food restaurants, heads Minnesota-based “MinuteClinic”.)

Bowling fielded a call to Scott, explaining that while Scott would have been happy to speak directly to the magazine about Solantic he could not due to the fact that he was on family leave in the aftermath of a death in his family.

To date, Scott, who lives in Naples, has 13 Solantic locations (more than double what the company had last year). Six are located in Jacksonville. Three are in Wal-Mart stores as part of the giant retailer’s pilot program. Along with Solantic, three other urgent care clinic providers have signed agreements to team with Wal-Mart on the pilot program, which currently includes 13 locations but is scheduled to expand to 62 by the end of 2006.

Will Scott’s bet pay off? In this day and age of health care insurance premium increases, employers are increasingly seeking to shift employees to higher deductible health plans, meaning more out-of-pocket expense to patients, an outcome sure to inspire the general public to seek out lower priced basic care.

Additionally, Bowling says emergency rooms, particularly those housed in hospitals in major urban areas that are often clogged, are joyous that retail health clinics exist. Some managed care companies are even beginning to send letters to individuals who recently used a hospital ER for a non-serious condition asking them to utilize a walk-in clinic the next time. Bowling anticipates managed care companies will soon begin to raise their co-pays on ER visits as a means of diverting traffic to walk-in urgent care clinics. Not surprisingly, the trend of walk-in urgent care clinics is being greeted with consternation by many in the medical community, not unlike the way Wal-Mart’s recent push to get in to banking is attracting opposition from traditional financial institutions. Doctors’ groups in particular fear that clinic care recipients don’t get the level of care they need.

Kevin Gardner, Wal-Mart’s senior manager of corporate communications, responds that Wal-Mart’s in-store clinics offer basic care services and preventative screenings and are not meant to take the place of the doctor-patient relationship or serve as a replacement for primary care.

“We believe that customers are looking for convenient ways to get help for non-complicated ailments, and these clinics allow them a one-stop solution that can be part of their shopping experience,” Gardner says. “As a customer-focused company, we are always looking for ways to add value and convenience for our customers.” Scott hopes to take his walk-in health care clinic company nationwide. In April he told the Business Journal of Jacksonville that he currently spends 60% of his time focused on his investment in Solantic, which he and Bowling started in 2001, and that he believes the company has the opportunity to one day have 1,000 locations across America.

What else is Scott up to these days? He also told the Journal that he has studied Mandarin for the past year and is considering launching a health care company in China. And, along with his now 20-something daughter, Allison, Scott has co-launched the Web site www.alijor.com that helps patients find health care providers. Right or wrong, many in Nashville health care circles still see Scott as a villain. Personal sentiment aside, though, odds appear strong that Scott is poised to make his next pile of chips in strip mall health care.