340B Health

HOSPITALS REPORT USING 340B SAVINGS TO SUPPORT CARE FOR PATIENTS AND COMMUNITIES

in 340B Health News Releases

WASHINGTON, D.C.— Hospitals participating in the 340B drug pricing program are using their savings to provide critical services and access to care to patients with low incomes and those living in underserved rural communities. A new report and infographic based on a survey of more than 1,300 hospitals participating in the 340B drug pricing program also details the degree to which rural hospitals rely on 340B savings to remain open at a time of record rural hospital closures.

The report, based on a survey conducted in November and December of 2018, found that 95 percent of hospitals are using 340B savings to support the provision of uncompensated care and 90 percent are using savings to support patient care services. These services include critical clinical and pharmacy services and important patient auxiliary services such as transportation, translation, and social services.

There are, however, key differences in how different types of hospitals are using their 340B savings. For example, 72 percent of “disproportionate share” or DSH hospitals use 340B savings to offset losses from low Medicaid reimbursements. This holds true for DSH hospitals of all sizes.

On the other hand, fully 93 percent of rural hospitals reported relying on 340B to help stay open. And half of the rural providers said a loss of those savings likely would trigger a closure. According to the North Carolina Rural Health Research Program, 106 rural hospitals have closed across the U.S. since 2010, and approximately half of the remaining hospitals are at risk of shutting their doors.

Savings from 340B discounts vary widely based on the size of the hospital. Among all hospitals, savings averaged $11.8 million per hospital, but 34 percent of hospitals reported less than $1 million in annual savings. Among rural hospitals, 340B savings were much lower, averaging $2.2 million per hospital, with more than 60 percent reporting less than $1 million in annual savings. 

“Hospitals participating in 340B are a vital part of America’s health care safety net. These survey results show 340B hospitals are fulfilling the mission of the program established by Congress by caring for patients who are uninsured, underinsured, and reliant on Medicaid and other public insurance programs,” said Maureen Testoni, President and Chief Executive Officer of 340B Health. “It is extremely encouraging to note the improvements in patient outcomes that are resulting from the programs created by 340B hospitals.”

Hospitals reported spending between $100,000 and $200,000 annually on compliance costs related to participating in 340B. Unlike the savings figures, these costs didn’t vary based on hospital type or size. That creates a burden on smaller hospitals, especially those in rural communities.

Other highlights from the report:

  • Nearly 9 out of 10 hospitals reported programs or services with their 340B savings that have improved patient outcomes, including improving medication adherence (81%), reducing preventable readmissions (78%), and improving clinical outcomes (60%) for patients living with HIV, hepatitis, and other conditions.
  • 70 percent of hospitals reported using savings to provide discounted and/or free drugs to their patients who cannot afford them.
  • Nearly two-thirds of hospitals said a loss of 340B savings would reduce their ability to provide uncompensated care.

The 340B drug pricing program requires pharmaceutical companies to sell covered outpatient drugs at a discount to safety-net hospitals, health centers, and clinics serving low-income or rural populations. These providers use those savings to stretch their scarce resources to care for more patients and offer more comprehensive services to their communities without relying on taxpayer dollars.

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