Death and Profits

In the coming weeks, as the push for health-care reform collides with efforts to reduce the national deficit, one federal program is virtually guaranteed to get caught in the crunch: Medicare. Lawmakers in Washington are targeting that sprawling program A primarily for those over the age of 65 A for spending cuts. Some reduction in Medicare's budget seems inevitable, and lobbyists for businesses that depend on Medicare are working hard to protect their financial interests.

Among those health-care providers with the best chance of escaping unscathed is something called hospice: organizations that tend to the needs of the terminally ill in their last days and that emphasize home care over hospitalization. (See sidebar.) If the nation's little-known but rapidly expanding hospice industry does manage to dodge the budget-cutters' axe, it's likely that some of the credit will go to the Reverend Hugh A. Westbrook, an unassuming Methodist minister who lives in North Miami Beach.

Westbrook and hospice are nearly synonymous in the U.S. Not only was Westbrook a pioneer in the growth and development of hospices, today he runs the largest hospice operation in the nation. VITAS Healthcare Corporation (until recently known as Hospice Care Inc.) holds another distinction: contrary to the tradition of hospices being nonprofit organizations staffed by selfless volunteers, VITAS is an extraordinarily successful for-profit business.

Dying people have made Hugh Westbrook a very wealthy man. In the fifteen years he's been involved with the hospice movement -- originally as an idealistic champion of nonprofit altruism -- Westbrook has gone from humble son of a railroad worker with a modest North Dade ministry to multimillionaire businessman who no longer leads a congregation and no longer preaches, at least not in a church. At age 48 he owns a secluded, lushly landscaped home on North Miami Beach. He cruises on one of his several boats. He vacations at his getaway home in the North Carolina mountains. His personal business horizons have expanded to include an interest in at least eight Florida corporations. And he owns the controlling stake in VITAS, which by his own estimate could be worth as much as $50 million.

Though he refuses to discuss his salary or net worth, Westbrook acknowledges, "I've made a good living out of this. The company I created is worth a lot of money, and so on paper I created a lot of wealth. That was sort of not the intended result of what I set out to do. It is something that sort of happened along the way."

Former company officials, however, say there is nothing haphazard about the manner in which Westbrook has benefited. For example, an independent audit conducted in 1991 revealed that Westbrook had leased his 56-foot sport-fishing yacht to his own company for business and entertainment purposes. Over a two-year period, he received more than $360,000 for its use. He maintained a similar arrangement with his vacation home in North Carolina. And in a complex sale a couple of years ago, he and a partner netted four million dollars by selling one of his companies to another he controlled.

At a time when health-care providers nationwide are on the defensive, Hugh Westbrook's future looks bright. Which is not so surprising in light of the fact that he helped craft the state and federal laws that regulate the hospice industry. Those laws, enormously favorable to Westbrook's business interests, were passed at a time when Republican administrations held sway in Washington and Florida. Today Democrats are in charge, which has only enhanced Westbrook's stature in the corridors of power and stands to shield him and his industry from major reform or heavy cutbacks in Medicare revenue. For Westbrook himself is a Democrat. A very important Democrat.

Though he has received virtually no publicity in Miami for his business or political activities, over the years Westbrook, his family, friends, and companies, have contributed hundreds of thousands of dollars to the election campaigns of Democrats in Florida and around the nation. He has given jobs to politicians and their relatives. He served as finance chairman for Nebraska Sen. Bob Kerrey's ill-fated but well-funded presidential bid last year. Today he holds the influential position of finance chairman of the Democratic Senatorial Campaign Committee and will be responsible for raising up to $24 million for upcoming U.S. Senate races. His personal ties to powerful Democrats run directly to the White House.

As Reverend Westbrook and his long-time business partners -- Esther Colliflower and Don Gaetz -- have built an empire and amassed a fortune, they have also attracted their share of critics, state and federal regulatory authorities among them. Westbrook and his associates have never been accused of violating any laws governing the hospice industry, and the quality of care they provide to patients has never been seriously questioned. But an expose three years ago in the Chicago Tribune reported allegations of wrongdoing and sparked an investigation by the Office of the Inspector General for the U.S. Department of Health and Human Services. The results of that investigation, which examined the business practices of Westbrook's hospice operations in the Chicago area, raised serious questions of propriety, but federal prosecutors declined to pursue the matter.

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Jim DeFede
Contact: Jim DeFede