HealthSouth Corp., Birmingham, Ala., said Wednesday that it is separating its underperforming ambulatory services division into distinct operations for ambulatory rehabilitation services and diagnostic imaging centers.
"Both outpatient (rehab) and diagnostics are experiencing challenging market pressures," according to HealthSouth spokesperson Andy Brimmer.
The company named Karen Davis president of the new diagnostics division, which includes 127 imaging centers nationwide. Brimmer says it is the second-largest imaging network in the United States.
Davis had been diagnostic group vice president for the eastern U.S. and formerly served as CEO of HealthSouth MetroWest Hospital in Birmingham.
Interim corporate CEO Bob May will supervise ambulatory rehab operations while HealthSouth searches for a permanent division chief, the company says. Brimmer says the new division includes more than 1,000 clinics and employs about 7,100 people.
Although the outpatient rehab and diagnostics divisions comprise more than half of HealthSouth's 1,700 total locations, the two sections account for a relatively small part of overall business. Brimmer says HealthSouth garners approximately 75% of its revenue and more than 85% of its profits from its ambulatory surgery centers and inpatient rehab services.
Also today, HealthSouth announced the resignations of William Horton, executive vice president and corporate counsel, and Brandon Hale, executive vice president for administration and corporate secretary. Neither has been implicated in the accounting and tax scandal that, to date, has resulted in 15 former HealthSouth executives admitting to federal crimes.
The most recent admission came Friday, as U.S. Attorney Alice Martin said that Birmingham resident Catherine Fowler, 46, former vice president of treasury and cash manager, agreed to plead guilty to charges of conspiracy to deceive auditors and falsify financial records.
HealthSouth remains under federal investigation for allegedly overstating company profits by $2.5 billion between 1997 and 2002 and inflating the value of its assets by $800 million in public financial reports.