10 Things to Know About the Federation of American Hospitals

The Federation of American Hospitals represents investor-owned and managed community hospitals throughout the U.S., acting as a spokesperson to Congress, the White House, media and academia.

Here are 10 key things to know about FAH.

1. FAH represents more than 1,100 investor-owned hospitals and more than 150,000 hospital beds. The organization is primarily viewed as the spokesperson of for-profit hospital chains.

2. Charles "Chip" Kahn III has served as president and CEO of FAH since June 2001. He is nationally recognized as an expert on healthcare policy, Medicare payment, healthcare financing and health coverage. Scott Becker, publisher of Becker's Hospital Review, says Mr. Kahn is "one of the brightest political guys in healthcare." Mr. Kahn previously served as president of the Health Insurance Association of America. He also served on Capitol Hill as minority health counsel and later staff director for the health subcommittee of the House Ways and Means Committee. He was also a senior health policy adviser to former Sen. David Durenberger (R-Minn.) and legislative assistant for health to former Sen. Dan Quayle (R-Ind.).

3. The organization was founded in 1966 by a group of about 30 for-profit hospital leaders to ensure they had a say in the development of the Medicare program. They felt the proposed Medicare reimbursement formula didn't take into account the significant capital investments made by for-profit providers to improve quality of care. The newly formed FAH helped convince Congress to implement a payment to for-profit hospitals for the expenses incurred in meeting Medicare requirements.

4. The FAH political action committee was launched in 1972. The organization has proved itself to be politically effective: In the 2004 election cycle, FAH contributed to victorious candidates in 70 percent of targeted House elections and 90 percent of Senate elections.

5. Since its inception, the FAH has taken an aggressive approach to lobbying for the interests of for-profit hospitals. For instance, FAH reported $570,000 in lobbying expenses during the third quarter of 2012, leading up to that year's election.  

6. Along with other hospital groups, the FAH has fought Medicare cuts and the extension of sequestration to fund other programs, such as unemployment benefits. Last fall, for instance, FAH and eight other hospital associations urged Congress to avoid further reducing payments to hospitals, which already face nearly half a trillion dollars in reimbursement cuts during the next decade. The FAH and the other associations have said the cuts hurt patients' access to essential care.

7. The FAH demonstrated its significant influence at the beginning of 2013, when it and other healthcare advocacy organizations stopped Congress from including cuts to outpatient payments, graduate medical education and "bad debt" payments in a deal to avoid the fiscal cliff.

8. The FAH has advocated strongly for healthcare quality improvement. In 2002, the organization joined forces with the American Hospital Association and Association of American Medical Colleges to launch the Hospital Quality Alliance, a voluntary initiative to improve patient safety and advance quality care delivery. The HQA advised CMS on the creation and development of Hospital Compare, the nation's broadest compendium of publicly available, comparable national hospital quality measures. The HQA ceased operations in 2011 after transferring its hospital quality measure review processes to the National Quality Forum's Measures Applications Partnership, which was created under the PPACA.

9. The FAH has taken a controversial stance on the topic of hospital industry consolidation, dismissing the concerns many have expressed about monopolization and higher prices for consumers. The organization commissioned FTI Consulting and its Center for Healthcare Economics and Policy to put together a report on hospital mergers. Overall, the report's positive findings aren't surprising, given that it was commissioned by an organization that mainly represents for-profit hospital chains. The report — released this past January — stated most recent literature suggests hospital mergers and integration deals benefit the populace. Larger systems are able to drive down costs through economies of scale, reduce overhead and other duplicative services and maintain hospital care in a community, according to the report. "It's becoming less and less possible to be a freestanding hospital," Mr. Kahn says. "Consolidation is a reality."

10. The FAH also promotes structural changes in the healthcare industry that decrease spending. The organization commissioned healthcare economics consulting firm Dobson DaVanzo to analyze Medicare spending; in a report released last March, they concluded Medicare could save $900 billion from 2015 through 2024 if Medicare spending continues to grow at a slow rate due to the shift to value-based payments, increased patient cost-sharing, state initiatives, reductions in healthcare-associated infections and hospital readmissions and a slowdown in the diffusion of expensive technologies like high-cost prescription drugs. The report urges policymakers to support and encourage existing reform efforts and allow time for further implementation and evaluation of these efforts before considering any major new structural reforms. It's unclear whether policymakers will follow those recommendations.

More Articles on FAH:
Report: Medicare Changes Could Save $900B
Ardent Health CEO David Vandewater Elected Chairman of FAH
Industry Report: Hospital Mergers Benefit Patients 


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