HealthSouth looking to rehabilitate

TEXT OF STORY

SCOTT JAGOW: HealthSouth's high profile trial grabbed headlines alongside names like Enron and WorldCom. But unlike those companies, HealthSouth is rehabilitating itself. Rachel Dornhelm reports.


RACHEL DORNHELM: CEO Jay Grinney just announced the company plans to sell the outpatient rehab clinics that started it all.

Health care analyst Derrick Dagnan says the firm also wants to spin off its outpatient surgery centers.

DERRICK DAGNAN: The proceeds from these sales would likely be used to pay down debt, which would give HealthSouth the financial flexibility to grow and operate as a profitable company over the long-term.

HealthSouth wants to focus on its most profitable sector: inpatient rehab for a mostly Medicare crowd. Dagnan says just a year ago HealthSouth bosses had to deal with creditors, lawyers and a diverse business.

HealthSouth also announced it is keeping its name after consumer studies found the brand largely untainted in much of the country.

I'm Rachel Dornhelm for Marketplace.

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