PROXY
                           HEALTHSOUTH Corporation
                SPECIAL MEETING OF STOCKHOLDERS --     , 1995
                     THIS PROXY IS SOLICITED ON BEHALF OF
                            THE BOARD OF DIRECTORS

   The  undersigned  hereby  appoints  RICHARD M. SCRUSHY and AARON BEAM, JR. or
_________________________________________, and each of them, with several powers
of substitution,  proxies to vote the shares of Common Stock, par value $.01 per
share, of HEALTHSOUTH  Corporation  ("HEALTHSOUTH")  which the undersigned could
vote if personally present at the Special Meeting of Stockholders of HEALTHSOUTH
to be held at Two Perimeter Park South, Birmingham,  Alabama 35243, on Thursday,
, 1995, at 2:00 p.m., Central Time, and any adjournment thereof:

    1. To approve and adopt the Amended and Restated Plan and Agreement of
Merger attached as Annex A to the Prospectus-Joint Proxy Statement, dated
 , 1995,  that has been  transmitted  in  connection  with the Special  Meeting,
pursuant  to which a  wholly-owned  subsidiary  of  HEALTHSOUTH  will merge into
Surgical  Health  Corporation  ("SHC") and  stockholders  of SHC will  receive a
specified  fraction of a share of Common Stock of HEALTHSOUTH  for each share of
capital stock of SHC, all as described in said Prospectus-Joint Proxy Statement.
    

                            [ ] FOR [ ] AGAINST [ ] ABSTAIN

    2. In their discretion,  to act upon any matters incidental to the foregoing
and such other business as may properly come before the Special Meeting,  or any
adjournment thereof.

              (Continued and to be dated and signed on other side)

                          (Continued from other side)

   This Proxy,  when  properly  executed,  will be voted in the manner  directed
herein by the undersigned stockholder.  If no direction is made, this Proxy will
be  voted  FOR  Item 1  above.  Any  stockholder  who  wishes  to  withhold  the
discretionary  authority  referred to in Item 2 above should mark a line through
the entire Item. Dated: , 1995 Signature(s) (Please sign exactly and as fully as
your name appears on your stock  certificate.  If shares are held jointly,  each
stockholder should sign.)

  PLEASE MARK, SIGN, DATE AND RETURN PROMPTLY, USING THE ENCLOSED ENVELOPE.
                           NO POSTAGE IS REQUIRED.

                               



                         SURGICAL HEALTH CORPORATION
         This Proxy is Solicited on Behalf of the Board of Directors

   
   The  undersigned  hereby  appoints  Rock A. Morphis and H. Michael  Finley as
Proxies,  each with the power to appoint his substitute,  and hereby  authorizes
either one or both of them to represent and to vote, as  designated  below,  all
the shares of Common  Stock,  Series A  Convertible  Preferred  Stock,  Series B
Convertible   Preferred   Stock  or  Series  C   Convertible   Preferred   Stock
(collectively,  "SHC  Shares") of Surgical  Heath  Corporation  ("SHC")  held of
record  by the  undersigned  on  April  26,  1995,  at the  Special  Meeting  of
Stockholders to be held on , 1995.

   1.  PROPOSAL  TO:  approve the Amended and  Restated  Plan and  Agreement  of
Merger,  dated as of January 22, 1995 (the "Merger Agreement") by and among SHC,
HEALTHSOUTH  Corporation  ("HEALTHSOUTH"),  and ASC Atlanta Acquisition Company,
Inc., a wholly-owned  subsidiary of  HEALTHSOUTH  ("Merger  Corp"),  pursuant to
which,  among other  matters,  (a) Merger Corp will merge with and into SHC (the
"Merger") and (b) each  outstanding  SHC Share will be exchanged for a specified
fraction of a share of Common Stock of HEALTHSOUTH,  all as more fully described
in the accompanying Prospectus-Joint Proxy Statement.

                        FOR [ ]AGAINST [ ]ABSTAIN [ ]

   2. In their  discretion,  the Proxies are  authorized to vote upon such other
business as may properly come before the meeting.

             (Continued and to be dated and signed on reverse side)

                             (Continued from front)

   THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSAL 1 ABOVE.

   Please  sign  exactly as name  appears  below.  When shares are held by joint
tenants,  both should sign. When signing as attorney,  executor,  administrator,
trustee or guardian, please give full title as such.

   If a corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.

Date: , 1995

Signature:
Signature if held jointly