New research finds gaps in charity care provided by 340B hospitals

Nicole Longo
Nicole Longo June 2, 2022

New research finds gaps in charity care provided by 340B hospitals.

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The 340B program was created to support safety-net clinics and qualifying hospitals by establishing a discounted medicine program funded by biopharmaceutical manufacturers to help vulnerable patients access medicines. Unfortunately, the worst kept secret about the 340B program is the lack of clear patient benefit. There are zero patient protections and zero reporting requirements for covered entities to hold them accountable. Two recent pieces of research add to the mountain of evidence showing patients are not in fact benefiting from 340B when they seek care at 340B hospitals.

  1. The Lown Institute released its 2022 Hospitals Index, which measures nonprofit hospitals’ role and level of investment in their communities. 340B hospitals make up all 10 of the non-profit hospitals found to provide the least amount of community benefit relative to the value of their tax breaks. These hospitals had the largest “fair share deficit,” which means they spent less on charity care and community investment than the estimated value of their tax breaks. It seems odd that all ten of these hospitals with the greatest fair share deficits are 340B, considering that those hospitals have not just the tax benefits of being non-profits, but they also oftentimes get significant revenue from buying discounted 340B medicines and getting reimbursed at a higher price.

  2. The Center for Public Health Law Research at Temple University’s Beasley School of Law analyzed the patient financial assistance policies of 75 hospitals that participate in the 340B program. Only 13 of the 75 hospitals’ policies included information to help low-income patients access their prescription medicines — and some of these 13 hospitals simply directed patients to an outside resource for financial assistance on medicines, rather than offering any direct assistance (like cost sharing assistance). Meanwhile, just six of the hospitals in the study stated they do not use extraordinary collections actions, which can include liens, foreclosures and civil actions, when patients fail to pay bills. Again, it seems odd that so few 340B hospitals, which receive significant discounts on outpatient medicines, give the appearance of providing direct assistance to low-income patients so that they can afford those medicines. These hospitals have all of the tools and resources at their disposal to go after patients who cannot afford to pay their medical bills.

340B is a safety-net program that doesn’t appear to actually help most vulnerable patients afford their medicines. We need to fix 340B so it helps more patients, instead of helping hospitals that provide little to no community benefit.

Learn more at PhRMA.org/340B.

Topics: 340B