340B Hospitals Provide More Care to Underserved Populations Than Non-340B Providers

15 Apr 2019

A report prepared for 340B Health and published by L&M Policy Research shows that 340B hospitals care for a greater proportion of the underserved and low-income patient population than non-340B hospitals and private physician offices.  Specifically, the report found that 340B hospitals treat a higher percentage of patients who are dually eligible for Medicaid and Medicare, are disabled, or are of certain ethnic/racial minorities.  The report uses FY2016 Medicare Part B claims data to compare differences in patient characteristics between hospitals participating in the 340B drug pricing program with other non-340B hospitals as well as private physician office patients.

According to the report, the benefits of the 340B program truly support care for underserved populations.  The key findings of the study include:

  • The percentage of Black/African American patients treated in 340B hospitals is 66%, which is  75% higher than in non-340B hospitals and physician offices, respectively;
  • The percentage of patients treated in 340B hospitals who are disabled is 29%, which is 110% higher than in non-340B hospitals and physician offices, respectively;
  • The percentage of dual-eligible patients treated in 340B hospitals is 43% higher and 71% higher than in non-340B hospitals and physician offices, respectively.

These findings are consistent with other reports that have shown that 340B hospitals treat a higher proportion of patients associated with a lower socioeconomic status and who have difficulties accessing care.  For example, the Government Accountability Office (GAO) published a report in 2018 finding that 340B hospitals generally provided higher amounts of uncompensated care, and, on average, operate on lower financial margins than non-340B hospitals.  The GAO report also found that disproportionate share hospitals provide 63% more charity care than non-340B hospitals.

The findings are inconsistent, however, with studies frequently cited by the pharmaceutical industry as evidence that the 340B program needs reform.  For example, a recent PhRMA-funded report published by the Berkeley Research Group (BRG) analyzed Medicare Part B claims occurring at 340B-enrolled hospitals and found that Part B reimbursements at 340B hospitals increased by 20% between 2008 and 2017, blaming the increase on “financial incentives” created by the 340B program’s savings.

Category: Drug Pricing

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