Jay Grinney of HealthSouth talks to Erica Morris about business after a PR crisis and why local outreach is so important to his company.
How did HealthSouth overcome the major PR challenge it faced a few years ago?
Grinney: We didn't just face a PR challenge: we faced a PR crisis. In 2004 a $2.7 billion accounting fraud was uncovered. This led to the delisting of the company from the NYSE, bondholders threatening to call our bonds, investigations and eventual settlements with the SEC, the Department of Justice and the Centers for Medicare and Medicaid Services, and the realization that the company had incurred a burdensome amount of debt relative to its true earnings capabilities. We met these challenges by creating a disciplined, prioritized turnaround plan that had open, honest and transparent communication with all constituents – shareholders, bondholders, regulators, employees, and patients. In 2008, HealthSouth generated its first real profit since 1996 and we're on our way to having another successful year of growth in 2009.
Is there anything specific to HealthSouth that makes communications particularly important?
Grinney: There are two characteristics that make effective communications essential at HealthSouth. Communicating patients' treatment plans and milestones within our clinical teams and among family members is essential to the patients' recovery and their ability to resume their normal lives. Second, we're in a highly regulated industry. It's imperative we have open and frequent communication with those who establish the myriad of policies and procedures that govern our business. Of course, being a NYSE-traded company, we also need to ensure our stakeholders are fully informed about the financial condition of the company and our plans for future growth.
How do you engage consumers?
Grinney: Healthcare is a local service business, so our efforts are aimed at establishing our brand at the local level. Our consumers are not only the patients we treat but, equally importantly, the physicians who entrust their patients to our care. We engage these physicians with detailed communications about the efficacy of rehabilitative care, in general, and the unique capabilities of our hospitals.
How has the changing media landscape affected HealthSouth's strategy?
Grinney: What we've noticed is local television stations still want to cover local matters. Our strategy of promoting our hospitals in their communities is currently fitting well. But, with the decline in local newspapers, we are exploring new mediums to get out message out. That includes enhancing our Web presence and exploring more social media.