By the mid-nineties Scheffey had already been deposed an astonishing ninety times, but the videotapes from some of those sessions offer few hints that he felt any remorse.When challenged, his approach was almost always to retreat into medicalese, droning on for hours about the more technically complex points of his surgeries. One video deposition from 1992 is typical: Scheffey, with a guardedly neutral expression on his face, answered questions with a sort of impenetrable, emotionless objectivity. He conceded nothing. One of the few press interviews he ever gave (to the Houston Chronicle, in 1995) suggests a deeply adversary cast of mind. "They [insurance companies] set out on a plan… They have kept me in hot water with the board with complaints about patients," he said. "They managed to have me sued a number of times in such a manner that it made it difficult for me to get malpractice insurance…" Scheffey backed up such claims by mounting his own legal attacks against those whom he perceived to be harming him. He sued Barrash for slander three times. He sued an insurance company, whom he said had slandered him, winning a whopping $ll million in 1993. He also sued the media that had covered him, including NBC and the Houston Press, whose 1992 "Eric the Red" story was harshly critical of him.The Press settled out of court.
Yet none of his legal trouble seemed to deter Scheffey or make him change his behavior. His biggest problem was finding anyone to insure him at all. In 1993 he had appealed to the state Commissioner of Insurance to force the Texas Medical Liability Insurance Underwriting Association to suspend a surcharge they had imposed on him that would have required him to pay $537,931 in addition to his usual premium of $63,286. Such a surcharge meant that the insurance company would be charging $601,217 for what amounted to $600,000 of insurance. Scheffey lost the appeal. If state regulators had not quite figured out who Scheffey was yet, the insurance companies certainly had.
Where were the regulators? Why, with so many lawsuits filed, a track record known to a large segment of the medical community in Houston, and continual coverage in the press, was he allowed to continue performing surgeries in the state of Texas? In 1989 the state board had filed an informal complaint against the doctor based on a long list of patient injuries and other problems collected by Barrash, who by now was spending a good deal of time trying to expose Scheffey. But it was not until 1993 that the board mounted a full-scale, heavily-documented effort to revoke Scheffey's license in an administrative law court. Hearings in that case coincided with news of yet another Scheffey disaster: In 1994 his patient Ancel "Bud" Freeman, who had gone in for his third back operation, lost four quarts of blood and died after a seven-hour surgery. In 1995 a judge did what everyone expected: She recommended that Scheffey's license be revoked, not just for malpractice but also for excessive charges. But the board ignored that recommendation and voted instead to give Scheffey a five-year probation that would let him continue to practice but with some restrictions: To operate, for instance, he would have to have a written consultation from another doctor. "I was extremely distressed and disgusted at the board's action," says then-executive director Bruce Levy, whose staff mounted the case. "I came close to resigning."
Scheffey immediately appealed the ruling in a state district court and won a temporary injunction. Later, the court reversed the board's decision, allowing Scheffey to proceed as though nothing had happened. It was not until 1997 that an appeals court reversed the district court, but by then Scheffey's probation had less than three years to run. It is likely that Scheffey had started to believe, with good reason, that his medical license was legally invulnerable.
Thus began what amounted to a second professional golden age for Scheffey. In the late nineties he went to trial with five lawsuits and won them all, including one by the family of Freeman.The number of lawsuits filed against him dropped: From 1997 through 1999 only three suits were filed; from 2000 to 2002 there were only six. And he was making more money than ever. According to filings in one lawsuit, Scheffey's gross income from his practice in 1998 was $4,032,292. By 2002 it had risen to $5,453,361. Four entries from his 2002 profit-and-loss statement suggest the sort of life he was leading: Entertainment and meals: $238,927; Legal [fees]: $259,0l3;Travel and convention: $389,419; Charter expense [aircraft]: $448,260.
In the wake of all the bad press in 1994 and 1995, however, Scheffey had begun to lose friends in River Oaks, especially in the old-money set. "Oh, this guy was playing big, trying to date girls of the old Houston circle," says a woman who runs in those circles but asked not to be identified."The problem was that old Houston never liked him and was always suspicious of him." Says Houston Chronicle society columnist Shelby Hodge: "People absolutely stopped seeing him. People cluck-clucked all the time, especially in the medical community." But in 1999 Scheffey had done something that had greatly improved his social standing: He'd married a young society woman named Kendall Thomas, who was eighteen years younger than he was. She was pretty and well connected and part of the young social set in River Oaks. A year before he married her, he had moved into a $5.8 million, ten-thousand-square-foot house on Longfellow Lane, in Shadyside, near Rice University. The place was so spectacular that its landscaping and elaborate flower beds were featured five years later on the cover of Texas, the Houston Chronicle's Sunday magazine.
With Kendall there were parties and social invitations, even though many people wondered, as one acquaintance put it, "what she was doing with him." But he never quite made it back inside:"I went to a party at their house, one of those art groups," says the friend."I just remember that it was a big party with big money but kind of sleazy people. Girls with surgeries, like they might have had a background in exotic dancing.You know what I mean."
Through all this tumult, both social and professional, there is no evidence that Scheffey altered even a small part of the work behavior that had caused him so much trouble. It seemed that Scheffey's practice had never operated quite so efficiently, relying upon an elaborate network of enablers that included fellow surgeons, nurses, radiologists, anesthesiologists, and a system of insurance and workers' comp approvals that was easily gamed. The TWCC, which, in effect, controlled 90 percent of his revenue, not only allowed him to continue but failed to challenge him when he was asking for approval (in one case, for the fifteenth surgery on a patient). Once the TWCC approved it, there was little anyone could do.
Scheffey had also found the perfect home for the sort of work he did: a facility in Pasadena called Vista Medical Center Hospital. Vista was owned by a publicly traded Houston company called Dynacq Healthcare, whose main line of business was high-volume surgery. Dynacq, in fact, made both the Forbes and Fortune lists of the one hundred fastest-growing companies in 2002 on the strength of its astounding 47 percent annual growth rate over a three-year period. In a 2003 article in Barron's, company spokesman Jim Baxter boasted that "a very active surgeon might be able to do five spinal surgeries in a day." It is unclear if he was referring specifically to Scheffey, but he may as well have been. In one deposition, a Vista nurse said that Scheffey would often have two operating rooms going at the same time. So dependent was Vista on Scheffey that when his license was later suspended, in 2003, his absence led to dropping profits, which had a direct impact on Dynacq's bottom line.