I Love the Federation
A nonprofit hospital administrator thanks the lobby that made his competition illegal, and the man who bragged about it.
Let me tell you about the finest sentence ever written in American healthcare.
Not by a physicians.
Not by a nurse.
By a lobbyist.
The ban on physician-owned hospitals, he said, “wouldn’t be there if it wasn’t for the Federation.”
Read it again.
Again. This time slower….
He is not apologizing.
He is not spinning.
He is taking credit.
Standing at a microphone, in a suit I probably paid for, announcing that he personally removed my competition from the board.
I have that sentence framed.
I look at it when I am sad.
Understand What Almost Happened To Me
Picture the nightmare.
A surgeon builds a hospital. He owns it. He runs it. He replaces your knee for a fraction of what I collect, and he does it better, because he is standing in the building with his name on it and he cannot hide behind a system.
His patients love him.
His outcomes embarrass me.
His prices are printed on a wall.
Now picture him doing that across the street from me.
I would have to get good.
I have thirty vice presidents. I have a brand consultant.
I have a mission statement carved into travertine in a lobby that cost nine million dollars.
I cannot get good.
There is no room in the budget.
So We Did The Sensible Thing
We banned him.
March 23, 2010. Section 6001 of the Affordable Care Act. One paragraph.
No new physician-owned hospital may enter Medicare under the exception. The existing ones were frozen at their statutory baseline. Every bed. Every operating room. Every procedure room. Counted once, and never again.
Congress did leave them a door.
They may apply to the Secretary for permission to grow. They may qualify as an applicable hospital, or a high Medicaid facility, and if they do, they may be allowed to expand.
On the main campus only. To no more than double what they had.
And when they apply, the request is published, and their community is invited to comment on whether they deserve it.
I am their community.
Congress wrote that part in. No administrative review. No judicial review. None.
They did not lose an argument.
They did not lose a market.
Congress simply stopped allowing them in the building.
That is not competition.
That is taxidermy.
The Beautiful Part
Appreciate the craftsmanship.
Congress did not ban bad hospitals. They banned ownership.
Understand the difference, because it is everything.We did not ban bad doctors.
We still have those. Every one of them.They are in my building right now.
They are in the VA.
They are in every nonprofit system in America, and they are staying, because a bad doctor is the safest asset I own.
He cannot leave. Nobody is recruiting him. He will not open a surgery center, because he cannot fill one. He does not ask what a case costs. He does not print his prices on a wall. He shows up, he bills under my tax ID, and he goes home.
I do not have to compete with him.
I have to schedule him.
The one who scares me is the good one.
The good one has patients who would follow him anywhere. The good one has outcomes he is proud of and a waitlist he did not buy. The good one can walk out of my building on a Friday, and by Monday he is across the street, doing my knee for a third of my price, with his name on the door and his numbers on the wall.
So we did not write a law about quality.
We wrote a law about ownership.
Because quality was never the problem. Quality was the threat.
How We Said It Out Loud
So we called it a loophole. We said self-referral. We said cherry-picking.
We said “patient safety” into a microphone. Congress converted it into market share.
Nobody had to prove a patient was harmed. We only had to sound concerned.
And the man who ran the for-profit lobby went out afterward and told everyone it was his.
I have never respected anyone more.
What He Actually Did For Me
Do the arithmetic with me.
He spends a few million a year. Pocket change, in this business.
In return: an entire class of competitor is legally frozen. Not slowed. Not regulated. Frozen. For fifteen years and running.
I have not had to lower a price. I have not had to improve an outcome. I have not had to explain a bill.
And I did not lift a finger. I did not spend a dollar of my own. I am nonprofit. I have a mission.
I let the for-profits do the punching. Then I go to the gala.
The Man Retired. The Paragraph Did Not.
He stepped down at the end of last year. Long career. Well earned.
I sent flowers.
But here is the thing about a man like that. He is replaceable.
The paragraph is not.
He goes home, and Section 6001 stays exactly where it is, doing its work, quietly, forever, without a salary or a pension or a single day off. The greatest employee I ever had, and he does not know my name.
Somewhere in this country there is a surgeon with a plan, a lease, and a spreadsheet, and he is about to find out he needs permission.
He will call a lawyer. The lawyer will read the paragraph. There will be a long pause on the phone.
I love that pause. It is the sound of me winning without waking up.
So Thank You, Federation
To the men who took a fight I would lose on quality and turned it into a fight I win on paper: thank you.
To the man who bragged about it on the record, in public, with his name attached: thank you, sincerely.
Physicians are so busy being right.
We were busy being there.
-Rojas out.
Glossary
Section 6001: the provision of the Affordable Care Act, enacted March 23, 2010, that narrowed the Stark whole-hospital and rural-provider exceptions. New physician-owned hospitals cannot qualify under those exceptions, and existing ones cannot expand their licensed operating rooms, procedure rooms, or beds beyond their March 23, 2010 baseline, unless the Secretary grants an exception.
Applicable hospital / high Medicaid facility: the two narrow categories that allow an existing physician-owned hospital to request permission to expand. Applicable hospitals may expand on the main campus only, and to no more than 200 percent of baseline. The request is published for community comment, and the decision is not subject to administrative or judicial review.
The Federation (FAH): the Federation of American Hospitals, the lobby for investor-owned, for-profit hospital systems. Not the AHA.
Stark whole-hospital exception: an exception to the physician self-referral law permitting qualifying physician ownership in an entire hospital, rather than in a single department or service.
Physician-owned hospital: a hospital owned in whole or part by the doctors who practice in it.
Sources
Section 6001, Patient Protection and Affordable Care Act (2010), 42 U.S.C. 1395nn(i). Amended the Stark whole-hospital and rural-provider exceptions. A physician-owned hospital may not increase operating rooms, procedure rooms, or beds beyond its March 23, 2010 licensed count (or its provider-agreement date, if in effect by December 31, 2010).
Expansion exception: the Secretary may grant an exception if the hospital qualifies as an “applicable hospital” or “high Medicaid facility.” Applicable hospitals may expand on the main campus only, capped at 200 percent of baseline. 42 CFR 411.362(c). Source: CMS, “Physician-Owned Hospitals.”
Community comment: the request is published in the Federal Register and the community has 30 days to comment. 42 CFR 411.362(c)(5).
No review: Section 1877(i)(3)(I) bars administrative and judicial review of the process.
Chip Kahn, longtime president of the Federation of American Hospitals, on the ban: it “wouldn’t be there if it wasn’t for the Federation.” Verbatim, one use. Kahn retired December 31, 2025.
FAH is the for-profit hospital lobby. The AHA is a separate organization and does not appear in this piece.