Coverage authority, payment authority, audit and appeals sit in separate bodies, because concentrating them would make a coverage mistake, a payment mistake and a governance mistake mutually reinforcing. The cost brake runs in two stages and both read access-adjusted spending, so a fall caused by undelivered care never registers as a saving. Prior authorization is abolished and replaced by retrospective, collective review. Durability is engineered: universality, mandatory appropriation, ring-fenced capital, insulated rate-setting.
Three layers: a federal payer setting the envelope, a regional authority managing a catchment inside it, and federally employed providers operating within that catchment.
The authority buys services from its federal providers at the same published rate it pays any other provider for the same service. Shifting a case to the public clinic costs exactly what shifting it to an independent practice costs.
Existence is federal. Utilization is regional.
The authority's job is to optimize distribution, so it has to be able to move work between providers. Two obvious designs both fail.
If federal providers sit OUTSIDE the authority's budget, shifting work to them is free, and the public arm becomes the dumping ground for every expensive case in the catchment. That is the failure that has hollowed out every American safety-net institution, and here it would arrive by design rather than by neglect.
If they sit inside the budget with no price attached, the authority captures the difference between what public delivery costs and what it charges, and the arm's viability depends on the authority's goodwill.
A published transfer price removes the arbitrage in both directions. The authority's referral decisions are then made on capability and access rather than on where the cost lands, and the public arm's viability depends on whether it can deliver at or below that price — which is the correct test, and the one that makes the growth question answerable rather than political.
Service payment flows through the authority's budget, because the authority decides how much of its work goes where. Capacity payment and capital flow DIRECTLY from the payer to the facility, because the authority decides utilization and does not decide existence. Clinician compensation runs on a nationally set schedule, which removes wage suppression from the authority's toolkit.
So an authority may decide it needs less from its public clinic this year. It may not decide the clinic stops existing.
Under a fixed envelope management looks for savings in four places, and three are already bounded. Salaries run on the national schedule. Headcount hits the nurse staffing minimums, which are a condition of participation. Service closure hits the catchment obligation and the closure certificate.
**Caseload is the fourth, and it is unbounded.** Panel size in primary care, caseload in behavioral health, patients per clinician per session, time per encounter — none of it is constrained anywhere in the architecture, which makes it the only squeeze available and therefore the one management will use. Published maxima by service line, on the same footing as nurse staffing standards, is what closes it. Until then the program's cost discipline lands on clinician workload, which is the mechanism that drives the exit the workforce sections warn about.
- Capacity payment
- Funds existence directly, so the arm does not depend on the authority's goodwill — only its utilization does.
- Patient mobility
- Settlement between authorities uses the same national schedule, so a case crossing a boundary is priced the same way as one crossing an ownership line.
The public-versus-private cost comparison is rigged. Authorities receive federal capital while legacy providers raise their own, so authority cost per service is artificially low and any growth in the public share is an artifact.
Correct, and it is the condition most likely to be missed. The arm must carry an imputed cost of capital on its asset base at REPLACEMENT value rather than historical cost, in the manner of utility rate-base regulation. Without it a new public clinic will look cheaper than a thirty-year-old private practice for reasons that have nothing to do with efficiency. Four other conditions travel with it: the same transfer price with no preferential public rate, obligations funded separately as capacity payment so the arm does not look expensive for doing what nobody else is asked to do, published audited cost on one standard, and risk-adjusted comparison. If any of the five fails, growth in the public share is an artifact rather than a finding.
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.
- Panel size and caseload maxima by service line. The last unregulated squeeze lever, and it should not stay open long.
- The capital-charge method — replacement value, allowed return, and whether capacity-funded assets carry it. This determines whether the growth signal means anything.
- The review threshold. Sixty percent of a service line is a first guess with no derivation behind it.
- How absorption after a legacy failure is distinguished from displacement by competition. Both raise the public share; only one is evidence.