There’s been a policy battle raging lately about the little-known federal 340B drug pricing program. It allows hospitals and other providers that serve the poor in large numbers to buy prescription drugs at a discount. Hospitals use the savings to stretch resources and reach more patients.

Central to this fight has been the drug industry’s contention that many hospitals in the program somehow don’t treat the poor of this country. Nothing could be further from the truth – and new research from the firm Dobson DaVanzo and Associates shows why.
The study finds that:

• As a percentage of total patient care costs, 340B disproportionate share hospitals provide nearly twice as much care as non-340B hospitals – 41.9 percent versus 22.8 percent – to Medicaid beneficiaries and low-income Medicare patients.

• 340B hospitals provide nearly 30 percent more uncompensated care than other hospitals. Most importantly, although 340B hospitals accounted for only one third of all hospitals included in the analysis, they provide nearly 60 percent of all uncompensated care.

• More 340B hospitals provide money-losing public health and specialized services than hospitals outside the program. This includes labor and delivery rooms, HIV/AIDS and palliative care services.

In addition, when taking hospital size into account and looking at uncompensated care as a percent of total patient care costs, 340B hospitals across all hospital sizes provide consistently high levels of uncompensated care.

The takeaway? Safety-net hospitals are on the front lines of treating America’s needy – regardless of their size.

As president of Charleston Area Medical Center in West Virginia, I already know the value of the 340B program to our underserved patients.
CAMC is the tertiary teaching and safety-net hospital for all of central and southern West Virginia.  It is our mission to take care of all patients including those who are critically ill requiring highly specialized acute care services and have no ability to pay. We have the only Level I trauma center for the region and we operate one of two Level III neonatal intensive care units.

CAMC provides 22.4 percent of the charity care provided by acute care hospitals in the state.

Savings from the 340B program are used to partially offset some of our uncompensated and Medicaid losses and to provide direct financial assistance to a large free clinic and a program that provides access to health care to the working poor.

West Virginia Health Right is located a few blocks from our trauma campus. The clinic has about 16,000 patients with over 65,000 visits annually.  CAMC provides all outpatient and inpatient services at no charge for the uninsured.  340B savings also help us fund the Community Access Program which provides free health care for the working uninsured. 

Now, and very unfortunately, some in the pharmaceutical industry want to gut the 340B program even though it represents just 2 percent of US drug sales.  Savings from the 340B program, which totals $11 million at CAMC annually, are extremely critical to our mission and are used to support our safety-net mission to the community.

I hope the new Dobson DaVanzo report will bring some much-needed factual balance to the 340B debate.  The program is too important to see curtailed.

Ramsey is president and CEO of the Charleston Area Medical Center in West Virginia