On Wednesday, Aug. 27, NBC Nightly News aired yet another report about alleged wrongdoings at Nashville-based Columbia/HCA Healthcare Corp. Featured prominently in the report was an interview with Peter Young, described as a “health care consultant who’s been analyzing Columbia’s bills.” On camera, Young alleged that Columbia/HCA hospitals were overcharging the federal Medicare program for reimbursement for medical procedures. It was a serious allegation, but Young appeared authoritative and believable.
Of late, Young, a 52-year-old, self-styled “Florida-based health care consultant,” has made a reputation for himself as an expert on Columbia/HCA and its problems with Medicare. Not only has he appeared on NBC Nightly News, which has a viewership of more than 11 million. During the past year, some of the nation’s most respected newspapers, including The New York Times, The Wall Street Journal, and USA Today, have quoted him as an expert source on Columbia. Typically, Young comes off as a trustworthy source, and, as evidence of his credibility, he notes that he has been interviewed by federal investigators seeking information on Columbia.
Invariably, Young has been openly critical of Columbia’s business practices and of the management style of now deposed Columbia chairman and CEO Richard L. Scott. And, in conversations with journalists and friends—and even in one exchange with Nashville Mayor Phil Bredesen—Young has taken credit for Columbia’s current woes and the ouster of Scott. Indeed, Columbia’s shares on the New York Stock Exchange have dropped 24 percent since mid-March, when newspapers first reported that government agencies, including the FBI, were investigating the health care giant.
Asked about how they have come to depend on Young as a health care expert, the media has had varying responses. At NBC a network spokesperson would only say, “We evaluate all our sources very, very carefully.” Richard Tofel, spokesperson for Dow Jones & Co., parent company of The Wall Street Journal, said, “We had no reason at the time to believe we had done anything inappropriate to quote Young as we did.” A Times spokesperson said that, in her paper, Young is always described as “a competitor to Columbia.” USA Today declined comment.
A Nashville Scene investigation reveals that Peter Young is a man with a checkered past. He has been indicted for extortion, and former business partners have accused him of bilking them out of at least $100,000 and perhaps much more. Since he’s being quoted as a supposedly unbiased health care expert, it’s particularly disturbing to learn that Young has boasted about his past success in manipulating Nashville news reporters into printing negative stories about Baptist Hospital. He has also claimed that a Baptist Hospital executive offered him a $25,000-$30,000 contract to “assist them in figuring out some things.”
Young declined comment on the Scene’s investigation, but taped conversations prove that Young once threatened to spread dirt in the media about Columbia if the company refused to hire him as a “consultant.” He has bragged about his ability to “drive down the stock” of publicly traded health care companies, and he has detailed how he could earn huge profits by using that skill. In Young’s own words, he offers “specialized consulting” services to hospitals. In many cases, it appears, those services amount to little more than muckraking against the competition. And yet, when it comes to the current state of the health care industry, Peter Young has established himself as the mainstream media’s expert of choice. A simple background check turns up plenty of questions about Young’s reliability as a source: A Davidson County grand jury indicted him for extortion in October 1992 after Young allegedly threatened a young tenant at an apartment complex that he was managing. In a plea bargain agreement, the charge was suspended when Young agreed to pay court costs and perform community service. On his résumé, Young describes himself as “Chairmen [sic] Tennessee Republican Party, Statesmen,” but Jim Burnett, chairman of the Tennessee Republican Party, says Young has taken some “liberties” in describing his status in the party. Young, according to Burnett, was little more than a Republican Party “wannabe.” The same résumé lists Young as a member of the class of 1972 at Seattle University. A school spokesperson said Young was not awarded a degree from Seattle University.
Young moved to Nashville in 1976. At that time, he was married to neurologist Mary Ellen Clinton, but the two were divorced in 1990 after Young took up with a woman whom Clinton describes as “a stripper.” According to his résumé, Young worked in the Trust Division at Third National Bank and later founded Young Financial, “a firm providing planning, strategy, financial and investment services.” He said he was also involved in a number of other investment and marketing ventures. Young filed for personal bankruptcy in Nashville on Dec. 3, 1993, after a series of his Middle Tennessee real estate deals ran into financial problems. He listed debts of more than $1 million on the bankruptcy filing.
Young’s list of professional references includes Sam Richmond, former dean of Owen Graduate School of Management at Vanderbilt University, but Richmond says he only knew Young socially and has no knowledge of his professional life. Another reference is local real-estate magnate Ted Welch, who would only confirm that, at one time, Young was a “tenant for a number of years” at one of Welch’s properties.
Around the time of his bankruptcy filing, Young seemed to be at loose ends, career-wise. Leeanne Saylors-Shelton, an employee of his financial services firm in the 1980s and early 1990s, says Young failed at several projects, including a venture to sell water softeners. It was then, Saylors-Shelton says, that “he hit upon a plan to try to make money out of gathering dirt on people.” Mayor Bredesen says it was around that time, too, that Young approached the Bredesen gubernatorial campaign, asking for money in return for not muddying Bredesen’s name.
Around the same time, several anonymous letters began circulating locally, alleging various business improprieties at Baptist Hospital. Worried about the possibility of extortion, Baptist officials apparently became suspicious that Young was the author of the letters. Saylors-Shelton says she met with Ed Creamer, then Baptist’s director of security, and agreed to secretly tape-record her telephone conversations with Young. She also wore a body wire so that she could record their face-to-face conversations. Rob Hempel, a local private investigator, confirmed that he helped outfit Saylors-Shelton with a recording device. In tapes that have been obtained by the Scene, Young paints a self-portrait, a none-too-flattering picture of a man intent on getting rich by manipulating the media.
The tapes make it clear that Young did indeed spend hours attempting to convince the local media to run negative stories about Baptist Hospital. David Fox, who covered the health care industry for The Tennessean from 1991 to early 1996, recalls that Young called him “frequently—at least weekly and sometimes daily, usually unsolicited. Usually it was to discuss his suspicions about various health care organizations.” Young also wooed Bill Snyder, health care reporter for the Banner; Bruce Dobie, editor of the Nashville Scene; and Dale Cardwell, then a reporter at WSMV-Channel 4. Young claimed that he had spent many hours reviewing public documents related to Baptist, and he offered to walk reporters through what he considered irregularities. The Banner, the Scene, and Channel 4 have all since run negative stories about Baptist Hospital.
Young’s plan was simple: He explained to Saylors-Shelton that he intended to grab credit for the negative coverage that was raining down on Baptist and then sell his “services” to a competitor. In a June 7, 1993, conversation, Young said he wanted to present “the HCA boys” with a Channel 4 videotape and a copy of a Banner article. He said he planned to tell them in a cover letter “that I’d like to have [a] contract with them to provide specialized consulting.” He explained that he “specifically did some things related to Baptist” to show HCA officials “that I’m capable of this stuff.” He had decided to use Baptist as his whipping boy, he said, because it was “very convenient and vulnerable” and because Baptist Hospital “just plain [had] a lot of shit on their shoes.”
Young’s real goal, however, was to get hired by HCA, which he termed a “much bigger fish.” In one conversation with Saylors-Shelton, he explained, “I’m going for somebody’s big jugular vein. And it’s going to be a publicly listed company. Somebody’s going to pay money to have me go after somebody.” Baptist is a not-for-profit institution. HCA, a public company, merged with Columbia, also public, in 1994. The tapes make it clear that Young hoped HCAwould hire him to trash its competition.
Young followed through on his plan. He wrote a series of letters, some of which the Scene has read, to various HCA and Columbia executives. Columbia/HCA spokesman Jeff Prescott declined to comment on Young, but other Columbia sources confirmed that the health care company was concerned that Young’s letters might be a thinly veiled attempt at extortion. On the tapes, Young told Saylors-Shelton that he had met with HCA officials and that, for a while at least, it appeared HCA might hire him. Young claimed in one taped conversation that HCA had no problem with his fees, which he described as “a $10,000 retainer and $100,000 on completion of project.” It was clear that Young meant serious business. On June 15, 1993, Young told Saylors-Shelton that, if HCA didn’t come through as a client, “I could certainly turn my gun on HCA.” Apparently, HCA didn’t take the bait.
Even while Young was trying to get on HCA’s payroll, Baptist apparently was putting together its own plan to stop Young. In another 1993 taped conversation, Young told Saylors-Shelton that Creamer, then Baptist Hospital security chief, had offered him a $25,000-$30,000 consulting contract with Baptist. Young dismissed the offer as “a nice way to buy someone off.”
Creamer, now an outside security consultant to Baptist, declined comment, and Baptist Hospital spokesperson Debby Koch said Baptist has “no relationship” with Young.
But Young was not just confident of his ability to damage a hospital’s reputation; he was also sure that he could cause financial distress, which, in turn, he could use to his own advantage. In another June 1993 conversation with Saylors-Shelton, Young said he felt “comfortable” that he could “drive the stock down” of a number of publicly held companies, including Columbia. “There’s a hell of a lot of money to be made in shorting stock,” he also noted. Nevertheless, he bemoaned the fact that he lacked “the money to fucking short the stock. If we had a lot of money, we could short the stock and make a killing.”
When investors “short” stocks, they basically are betting that the price of a company’s shares will go down. Shorting stocks is a commonplace means of profiting from a fall in a company’s stock price. However, Gary M. Brown, a lecturer in securities law at Vanderbilt University and an attorney at the Nashville law firm Tuke Yopp & Sweeney, said that an investor who shorts a stock while attempting to manipulate the share price through influencing the media “could be found to have violated federal securities law.”
However he’s making his money today, Young seems to have survived his bankruptcy very handsomely. Less than four years after filing for bankruptcy, Young lives in a comfortable three-bedroom home, complete with pool and pebble patio, in Cape Coral, a Florida coastal town. The Lee County (Fla.) tax collector’s office has assessed the property, which backs on a canal, at $152,950. A 27-foot Watkins sailboat and a 17-foot Hydra Sport motorboat are also registered in Young’s name. Young’s polished appearance on NBC Nightly News suggests that he is not skimping on his clothing allowance, and he’s stopped wearing the toupée that was a Peter Young trademark during his Nashville days. (At the time of Young’s bankruptcy filing, a business partner even offered to buy the hairpiece for $2,000. In a letter to the U.S. Bankruptcy Court, the business partner was convinced that “a higher price, most likely, would be obtained” for the toupée if it was sold at public auction.)
And Young seems to be riding high on the wave of attention he’s getting in the national media. What’s more, he seems to be perfectly willing to take credit for being the man who brought down Rick Scott. Just three weeks ago, Young called Bredesen, boasting to the Nashville mayor that he had been instrumental in getting the FBI and other agencies to investigate Columbia. Bredesen remembers Young saying, “Please tell your friends at Columbia that it was Rick Scott I was after. I’ve got nothing against Columbia.” Then, the mayor says, Young asked Bredesen for help in arranging a meeting with “his friends” at Columbia.
Only later did Bredesen remember who Young was. “He was the same guy who apparently tried to extort money out of my 1994 campaign,” said Bredesen. “My staff told me they had had some interaction with Young where he essentially said he had some dirt on me that he would be willing to keep to himself for a fee.” Bredesen said his staff did not comply with Young’s demands in 1994, and that he will not help him now.
It is difficult to decipher just who Young’s clients are—or what services he provides to them. More than once, he has told reporters that, typically, he is not hired directly by a hospital. Instead, he explains, he is hired by the hospital’s law firm, so that his dealings are shielded by the rules of lawyer-client confidentiality. Such an arrangement does not break the law, but Bruce Barry, a Vanderbilt professor who studies ethics, charges that, “legal or not, it’s underhanded.” Jim Humphrey, a Fort Myers, Fla.-based attorney representing Lee Memorial Health System, a not-for-profit group in Fort Myers, confirmed that his firm had retained Young some years ago to assist the system “in maintaining its status as a health care provider in competition with investor-owned hospitals.” Humphrey insists that Young had “absolutely not” been hired to bash the competition.
The Scene’s investigation has turned up only two hospitals that make direct use of Young’s services. Debbie Curry, spokesperson for Naples Community Hospital, a not-for-profit in Naples, Fla., confirmed that Young has been hired on a one-year contract as a “facilitator” in a joint health care project with Lee Memorial. Each hospital is paying half of Young’s $45,000 annual fee. Curry said Young is helping develop a health care plan for a small town located about halfway between the two hospitals.
Despite the mystery that surrounds Young’s employment and the fuzziness of his résumé, well-respected news organizations continue to use him as key source. Perhaps they assume that, because Young has been interviewed by several federal agencies during the Columbia/HCA probe, he may have access to hard-to-obtain information about the ongoing investigation. But journalism experts aren’t impressed with such reasoning. “It’s simply not good journalism. The public is entitled to good information, and not a bunch of b.s. from a guy who may have a lucrative private agenda,” argues Dick Schwarzlose, who teaches ethics at Medill School of Journalism at Northwestern University.
“If a journalist quotes a source who won’t reveal his agenda or who he is working for, then that story is sitting on sand,” warns Richard Campbell, director of the School of Journalism at Middle Tennessee State University. “Determining the source’s agenda should be part of any good journalist’s investigation.”
Several Nashvillians who have had business dealings with Young remain mystified as to just how Young has earned his current notoriety. “What makes Peter Young an authority on anything?” asked John Gillette, a Nashville accountant who invested in real estate deals set up by Young. “I’d like to ask The Wall Street Journal what they are using for sources.”
If the Journal—which, in all fairness, only quoted Young once—and other media organizations had made a perfunctory check of Young’s background, they would have found that many people formerly involved in financial dealings with Young are now willing to brand Young a scalawag. Along with other local physicians, Richard Feldman, a controversial Nashville doctor, invested money in real estate partnerships set up by Young in the 1980s. Those partnerships were administered by Young, who also controlled the funds.
Feldman now calls Young “a crook, a liar, and a scumbag,” with “a line of bullshit a mile long who took a lot of money from well-meaning investors.” Many of the investors are convinced that Young illegally converted their funds for his personal use before he filed for bankruptcy. The Scene’s analysis of many of Young’s financial records appears to confirm the investors’ suspicions. Attorney Charles B. Reasor Jr., who invested in one of Young’s deals and also served as legal advisor to other investors, said, “There was sufficient factual basis to lead a reasonable person to conclude that funds had been misappropriated.”
But Young managed to escape his disgruntled investors. In 1993 he agreed to step down from any role in the real estate deal in which Reasor and others were involved. In return, the investors promised not to prosecute Young. “It certainly appeared that Peter divested our money into his own pocket before the deals fell apart, and now it looks like he’s gotten away with it,” said Ralph E. Wesley, an ophthalmic surgeon who lost an estimated $100,000 in various real estate deals put together by Young.
Despite his shaky record in business, and despite the fact that he apparently does not even have a college degree, Peter Young has emerged as a “dial-a-quote” expert on the health care industry. What’s more, he has made it no secret that he takes pride in his ability to use the press to manipulate the very industry he’s being asked to analyze. Many consider him a slick con man and a would-be extortion artist. But the Times, USA Today, the Journal, and NBC never discovered these aspects of Peter Young, “health care consultant.” Apparently, the questions were never asked.
