This article presents discusses the law which established the Brazilian Hospital Services Company (EBSERH) in 2011, describing the context of its creation and investigating the main changes brought by the legislation. The development of the law is reviewed based on the changes that have occurred in Congress since Provisional Measure 520. The context is analyzed in relation to the arguments maintained to justify the creation of the EBSERH in light of the international economic crisis. Domestically, the text places the company in the perspective of the state reform initiated in 1995. This reform, according to the consulted bibliography, was implemented through two generations of actions, with the EBSERH belonging to the second generation of so-called institutional reforms. In the context of health care, the separation of financing and provision of health services within the state and the competition between public and private providers are guiding markers for the analysis. The major changes of the law that creates the EBSERH are discussed, especially regarding financing, relationships with universities, labor relations and social control. Possible effects on medical education are also contemplated.