Health Care Strategic Management
HealthSouth Woes May Spell Opportunities For Providers

By Bradley Worrell

HealthSouth's implosion is likely to cause reverberations across the health care provider spectrum, industry observers agree, but it's less clear whether not-for-profit hospitals have a chance of picking up any of the pieces should the company be forced to divest assets.

Finding out the "real numbers" would understandably be a top priority for would-be buyers should any HealthSouth assets wind up on the market, said Ed Ketz, a professor of accounting at Penn State University's Smeal College of Business and author of the forthcoming book "Hidden Financial Risks," which looks at major accounting scandals in 2001 and 2002.

"Particularly if you're buying a segment of a business, a subsidiary, you may not be sure if you can believe the financial statements for that subsidiary. You might want to hire an outside firm to do the books. Maybe not a full audit, but close," he said.

There also is the related issue of whether buyers can trust the HealthSouth executives who remain with the company in business dealing because of the taint surrounding the company. "From a buyer's point of view, you have to be very cautious as you talk with these officers, because, again, from a buyer's point of view, you don't know who's guilty and who's innocent," Ketz said.

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REPORTERS & EDITORS: For more information, please contact Wyatt DuBois in the Smeal College of Business Media Relations Office at 814-863-3798 or wed112@psu.edu .

Penn State's Smeal College of Business offers highly ranked undergraduate, MBA, executive MBA, Ph.D., and executive education opportunities to more than 5,500 students at all levels. Featuring academic departments of accounting, finance, marketing, insurance and real estate, management, and supply chain and information systems, the college is also home to major research centers such as the Center for Supply Chain Research, the Institute for the Study of Business Markets, the eBusiness Research Center, the Farrell Center for Corporate Innovation and Entrepreneurship, the Center for Global Business Studies, and the Center for the Management of Technological and Organizational Change.

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