A drug discount program that punches above its weight

When Debbie Scott from Alabama was diagnosed with colon cancer, she had no insurance and wasn’t sure how she would pay for treatment. Fortunately, she turned to Monroe County Hospital, which participates in the 340B drug discount program. For 25 years, 340B has been helping safety net healthcare providers like Monroe County Hospital serve millions of patients in need like Scott.

The program lets safety net healthcare providers buy outpatient drugs at a discount and use their savings to offer critical services to their low-income and rural patients.  On Tuesday, July 18, a House Energy & Commerce subcommittee will hold an oversight hearing on the program. Stories like Scott’s, along with research from the hospitals and other providers I represent, offer proof that the 340B program helps hospitals and other safety-net health providers stretch dollars so they can serve more patients and provide better care — just as Congress intended.

{mosads}340B hospitals treat a higher percentage of low-income patients and provide more uncompensated care than non-340B hospitals. These hospitals also serve more seniors who are disabled and poor. For these hospitals, there is no “one size fits all.” Facilities such as the University of Rochester Medical Center use the savings to provide free medications to patients in need, including oncology drugs.

Seton Family of Hospitals in Austin, Texas, uses its savings to implement a nursing program in local public schools and a medical mission on weekends to the city’s poorest neighborhoods.

Sutter Health in Sacramento, Calif. uses its savings help pay for outreach to the indigent, including the Street Nurse program that provides free medications and medical services to the homeless.

These hospitals, and many like them, demonstrate the profound impact of the 340B program and show an innovative approach to ensure a deeper reach into the heart of the community, ultimately leading to reductions in preventable disease and savings to patients and the taxpayer.

What’s even more amazing is the 340B program’s low cost in relation to its overall reach and impact. The initiative ensures access to facilities treating our most vulnerable patients, yet represents just 1.3 percent of the nearly half-trillion-dollars spent on prescription drugs in this country each year ($457 billion). To put that in the context, the pharmaceutical industry spends four times more in drug advertising than is spent on the entire 340B program nationwide.

But what is the tangible impact?

Hospitals can continue to provide more services that are critical to low-income patients but are often underpaid, like labor and delivery, trauma care, and HIV/AIDS services.

Outcomes go beyond services, though. Take Michael Asip of San Mateo, Calif., who had no money, no insurance, high blood sugar and cholesterol, and had just suffered a heart attack. He was able to have all of these health conditions addressed through clinical services at San Mateo Medical Center made possible by the hospital’s participation in 340B.

Anthony Suarez of Chicago, Ill., also had no insurance when he fractured his neck, broke his tailbone, and sustained a serious brain injury in a traffic accident. The University of Illinois Hospital & Health Sciences System’s savings from its participation in 340B helped fund his treatment and subsequent physical therapy.

Of course, oversight is critical and the government has stepped up its game. The Health Resources and Services Administration, the government agency that administers 340B, has audited 667 healthcare providers in 340B and plans to audit hundreds more each year.

The office also educates providers on how to comply with the program’s rules, and hospitals put a lot of time and energy into compliance. We hope HRSA’s efforts to make sure drug manufacturers obey 340B program requirements stay on track.

The 340B program is more than a line item on a spreadsheet, and is more important than ever. It allows hospitals serving our most vulnerable populations to ensure that patients entering their doors have access to the comprehensive treatments needed to address their healthcare condition.

Equally important, it gives hospitals the ability to address the most critical treatment needs for their community and customize programs that have the greatest potential to reach the most vulnerable patients. As Congress conducts oversight of 340B, lawmakers should protect this program so it continues to help hospitals serve their low-income and rural patients for years to come.

Ted Slafsky is president and chief executive officer of 340B Health, which represents more than 1,300 hospitals in the 340B drug discount program.