One federal payer buys an essential floor through four payment methods matched to cost structure rather than to who owns the building: a reference fee schedule, capacity payment for standby capability, capitation with reinsurance, and hospital global budgets. Delivery stays plural and regional — private practices, nonprofit systems, public hospitals, tribal systems, and a standing public arm of federally chartered Regional Health Authorities, aggregated from entities that already run multi-site operations. Every county is assigned to exactly one Authority, so deserts are attached rather than built. Inside the floor there is no prior authorization, no network denial and no balance billing. A regulated supplemental sits above it, separately priced.
Each Authority is a federally chartered corporation created by act of Congress under a single enabling statute — not a state nonprofit. It has a defined catchment, a community-majority board, and an obligation to serve that catchment regardless of ability to pay. Financing never passes through a state treasury.
The number of authorities is an output of the chartering process, not a figure chosen in advance. Governance granularity and planning granularity are also distinct: service catchments are far finer than authorities, and the two should not be conflated.
A delivery capability that exists only in emergencies has no workforce, no institutional memory and no constituency, and will not be there when it is needed. The public arm stands permanently so that it is staffed permanently.
A state charter would subject an authority to that state's nonprofit law, attorney general and charitable-trust oversight — and an authority whose catchment crosses a state line would answer to several of them, with different standards and different remedies. A federal charter disposes of the cross-state problem entirely. The Tennessee Valley Authority operates across parts of seven states on one federal charter and registers as a foreign corporation in none of them.
The governance model is the community-governed health centre. The institutional chassis is the VHA. These are different borrowings and conflating them produced an earlier error: the instinct to build through the VHA was right about the difficulty and wrong only about which part of the VHA to use.
Chartering is aggregation, not creation. The candidate pool is entities that already run multi-site operations: public hospital districts with boards and taxing authority, large safety-net systems like Denver Health and Parkland that already carry a catchment obligation, large health-centre networks with community-majority boards and audited finances, and existing rural affiliations that have already consolidated finance, HR and purchasing. That pool is roughly two to four hundred entities.
An earlier draft proposed chartering the health-centre pool generally. That was too easy. An organization running eight clinics on $60 million has the right governance model and nothing like the management capacity to run a trauma system, an EMS network and a global budget. Governance model and institutional capacity are different things, and only the larger networks have both.
Authorities convert existing hospitals, clinics, pharmacies and unused facilities before constructing new ones. In scope: primary care and chronic disease management, behavioural health, desert coverage, obstetric capability in underserved catchments, long-term care where private supply is absent, and the clinical layer of memory care.
Out of scope: tertiary and quaternary care, transplant, complex surgical subspecialty, and the residential layer of memory care. Functioning institutions exist and duplication buys nothing. Authorities refer outward and are entitled to acceptance by designated regional centres.
Salary removes the direct volume reward. Published cost accounts give the rate-setter a defensible benchmark for what a service actually costs to deliver.
Personnel authority is the part that cannot be procured. Title 38 exists because Congress concluded over forty years that the VA could not recruit clinicians under ordinary civil-service rules, and it supplies clinician pay bands with legal authority, direct-hire authority, retention incentives and a national credentialing system already operating at scale. Authorities inherit that plumbing without becoming veterans' facilities and without inheriting the obstetric and paediatric capability gap that disqualifies the VHA as a general-population clinical provider.
The chartering statute specifies receivership triggers, a removal mechanism and a federal takeover condition. Several authorities will fail in any decade.
- The VHA
- Two distinct relationships. Clinically it remains a veterans' system with independent governance and veteran priority, re-insourced rather than hollowed out by purchased community care — it is not the general-population vehicle, operating essentially no labour-and-delivery capacity and treating no children. Institutionally it is the chassis: Title 38 personnel authority, national credentialing, formulary procurement and an EHR that took decades to build. Authorities may also share facilities, training programmes, laboratories and transport.
- Four payment methods
- The public arm is paid the same way everyone else is — method matched to service line.
A standing public arm becomes large and permanent by accident, absorbing the market it was meant to backstop.
The payment rate does all the work. If capacity payments are set too low, no private operator accepts them and the Authority inherits everything by default. That is the failure mode to watch, and it is a rate-setting discipline problem rather than an ownership question.
Honesty about gaps. Distributed Healthcare has more unresolved specification than other Engines because operational complexity is higher; the items below are flagged for v10.2 specification or for outside expert review.
- Whether authorities may issue debt or whether all capital is federal grant. Bond capacity changes the achievable build rate materially and changes the receivership process; TVA has bonding authority, most federal instrumentalities do not.
- Whether authorities employ clinicians directly or contract them, and in what mix. Salaried employment is assumed throughout and has never been ruled.
- Disposition of an existing hospital district's property-tax levy when that district is chartered federally.
- The management cadre is thin. Chief executives with catchment-scale operating experience number in the low thousands nationally, and most are in the private sector at several times public pay. Charter in cohorts; the first will be uneven.