340B Hospitals More Profitable, Provide Less Charity Care, Receive Unwarranted Subsidies
Pacific Research Institute
November 9, 2021
So-called 340B hospitals whose mission is to help the vulnerable are more profitable and provide less charity care, finds a new brief released by PRI’s Center for Medical Economics and Innovation.
“The 340B program is supposed to help vulnerable patients receive their medicines, but our study shows that 340B hospitals are more profitable than traditional hospitals while not providing more charitable care,” said Dr. Wayne Winegarden, director of PRI’s Center for Medical Economics and Innovation and the study’s author.
Learn more about the study by clicking here.
The 340B program is named for section 340B of the Veterans Health Care Act of 1992 and is administered by the Health Resources and Services Administration (HRSA). It was designed to provide discounted drugs to improve vulnerable populations’ access to medicines.
Participating manufacturers provide qualifying clinics and hospitals discounts up to 50 percent or more off the costs for outpatient drugs, otherwise their drugs will not be covered by Medicaid.
Among the paper’s findings:
Data provided by hospitals to a Center for Medicare and Medicaid Services (CMS) database shows hospitals overall provided 2.03 percent of net patient revenues toward charity care in 2017, compared to 340B hospitals providing a small 1.66 percent.
Evaluating each hospital’s net income relative to net revenue, the profitability for 340B hospitals was 37 percent larger compared to the average of all hospitals. |
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