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WASHINGTON, D.C.— Hospitals participating in the 340B drug pricing program provide significantly more care to Medicaid patients and Medicare patients living with low incomes than non-340B hospitals, according to new research that 340B Health released today. The study is the latest in a large and growing body of research demonstrating that safety-net hospitals are meeting the congressional intent of 340B to serve more low-income patients and offer more comprehensive services.

The report by Dobson DaVanzo & Associates analyzes fiscal year 2020 federal data to compare 340B disproportionate share (DSH) hospitals with non-340B acute care hospitals based on their delivery of care to Medicaid patients and Medicare patients who receive Supplemental Security Income (SSI). The researchers also compared hospitals based on shares of operating revenue attributed to Medicaid and the provision of crucial services to their communities.

The study found:

  • 340B DSH hospitals serve substantially more Medicaid and low-income Medicare patients. The average low-income patient share for 340B DSH hospitals is 40.6% compared with 26.2% among non-340B facilities – a 55% difference.
  • 340B DSH hospitals provided 77.1% of all Medicaid hospital services in the U.S.
  • Medicaid revenue as a percentage of total operating revenue is nearly twice as high at 340B DSH hospitals than non-340B hospitals (17.0% compared with 10.4%), with even higher percentages for smaller hospitals.
  • 340B DSH hospitals are significantly more likely to provide unreimbursed or under-reimbursed services that their communities need, including such “essential community services” as HIV/AIDS and obstetrics care, highly specialized services such as trauma and burn care, and programs addressing health, wellness, and social needs for underserved patients.

Congress created 340B in 1992 to help safety-net hospitals, health centers, and clinics stretch their scarce resources to serve more patients and offer more comprehensive care. Savings from 340B price discounts provided by drug companies help cover those health delivery costs without using taxpayer dollars.

“This study provides some of the strongest indications to date that 340B is a vital part of the nation’s health care safety net and is working exactly as Congress intended to help patients in need,” said 340B Health President and CEO Maureen Testoni. “340B hospitals make up less than half of all hospitals in the U.S. but provide more than three-quarters of Medicaid hospital care as well as a series of other vital services that other hospitals do not offer. 340B savings are essential for these hospitals to continue meeting their missions to the safety-net patients who rely on them.”

Read the full report.

Contact: Richard Sorian at richard.sorian@340bhealth.org or 202-536-2285.