A ten-year full phase-in, with enrollment complete at Year 7. Every question in this category has a yes-or-no answer for a given person or institution on a given date: who is on the old plan and who is on the new one, who pays under which payment method, which institutions lose margin, which specialties take fee reductions, and whose jobs end. Price compression is the fiscal case, which means somebody's income falls — naming who is more honest than calling the same event efficiency. Access density is deliberately not on this clock.
At twenty years the federal government is the payer for roughly ninety percent of health spending and the operator of fifteen to twenty percent. Those numbers are different by design, and the gap between them is the answer to whether this is a takeover.
Most hospitals do not change hands. Their economics change; their ownership does not.
Under fee-for-service a hospital's value is the discounted stream from procedural volume in a favourable payer mix. Under a global budget with fixed revenue that mechanism disappears, and the asset becomes a regulated return on a utility-like base. The repricing is steepest exactly where value was highest — the well-located suburban facility whose worth came from payer mix rather than from plant.
It lands on announcement of the schedule and the conversion date, not on conversion itself, because markets price policy in advance. By the time an authority is negotiating, the number has already moved.
That is not a taking. Rate regulation reducing asset value has survived constitutional challenge repeatedly in the utility context, and Maryland's all-payer rate setting has run for decades without a successful hospital takings claim. It will be litigated anyway, and the program should budget two to four years of uncertainty.
And it means the public does not pay twice. The Accord does not compensate an owner for losing a rent it was collecting from the public in the first place.
Four instruments, and none of them is a purchase obligation.
**No obligation to buy.** An owner wanting out may close, sell to any qualified buyer, convert to nonprofit, or donate. The authority is never required to purchase and never bids against a private buyer to keep a facility open. That rule is what stops the program becoming a bridge for holders of distressed assets.
**Right of first refusal at appraised value**, before any sale or closure of a facility serving an assigned catchment. The appraisal is post-repricing by construction, because the prevailing regime is the global budget. The authority declines freely.
**Notice and anti-stripping.** Twelve to eighteen months before closing a catchment-serving facility. During the notice period the operator may not sell equipment separately from the facility, transfer the licence separately from the plant, or defer maintenance below a defined standard. The pattern this prevents is documented in private-equity hospital ownership: sale-leaseback of the real estate, extraction of the proceeds, then closure of an operating company left with rent it cannot pay.
**Certificate of closure** where the facility holds the only obstetric unit, emergency department, or ambulance service in a catchment. Not a prohibition on closing — a requirement to say what happens next.
Most transfers are at the bottom of the price range. A fifty-year-old rural hospital with a failing envelope and asbestos throughout has negative value, and worthless is a real category the paper should not flinch from: the authority declines, and the community's capability is rebuilt on a new site rather than inherited as a liability.
- Capacity payment
- The instrument for deserts. The authority is not buying its way in; it is being assigned them and funded for them.
- Catchment assignment
- Universal assignment is what makes the closure certificate enforceable — every county is somebody's obligation.
The exit story assumes for-profit chains abandoning marginal regions, and the authority will be left buying whatever they drop.
That is not the pattern and the premise needs correcting. For-profit chains operate in metropolitan markets with favourable payer mix; the rural facilities closing across America are independent nonprofits, small affiliations and county hospitals. Under global budgets a chain stops ENTERING rather than starts leaving, because the strategy that stops working is standing up a competitor in a corridor to capture the profitable layer. So the desert problem is a never-served problem rather than an abandonment problem, and the instrument is capacity payment plus catchment assignment rather than acquisition. Where acquisition matters is the second ring — exurban and small-city facilities a chain built when the payer mix looked better than it turned out to be.
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.
- The appraisal standard for the right of first refusal. Post-repricing by construction, but the method needs specifying, and it is where litigation will concentrate.
- Treatment of hospital real estate held separately from operations — the private-equity structure most likely to produce a stripped facility.
- Whether authorities may acquire going concerns at all, or only take assignment and build. Acquisition is faster and carries inherited liabilities.
- Independent physician practice declines under this program and the paper should say so rather than discover it later. The trend predates the reform; a national schedule with compressed differentials favours scale because compliance has fixed costs. Abolishing prior authorization and funding standby capacity are real mitigations and neither reverses the direction.