The healthcare industry is undergoing dramatic transformation. We’re shifting from fee-for-service reimbursement – receiving payment for each service to a patient – to a fee-for-value payment system, promoting the value and outcome of the healthcare services we deliver. We’re focused on providing the best care for the people we serve, measuring the efficiency of our healthcare delivery and striving to improve outcomes at a lower cost.
We at Ascension, the largest non-profit health system in the country, have embraced this transformation because it’s the right thing to do for the communities we serve. Unfortunately, the biggest daily obstacle that we see to providing better care at a lower cost is the astronomical price increases of prescription drugs.
Sadly, prescription drug spending continues to spiral out of control. Last year, according to the Office of the Assistant Secretary for Planning and Evaluation (ASPE), about $457 billion was spent on prescription drugs, accounting for 16.7 percent of overall personal healthcare services. Prescription medication prices are increasing far faster than any other aspect of healthcare. In the 24 states and the District of Columbia where we deliver care, we’ve experienced in a one-year period alone an increase of $73.9 million in our drug spending. That means $73.9 million less that we can invest in patient and community care.
Unfortunately, while this negative trend is occurring, a program that Congress created in 1992 to help needy patients gain better access to prescription medicines is under attack. The 340B Drug Pricing Program requires drug manufacturers to provide outpatient drugs to eligible healthcare organizations at significantly reduced prices so that vulnerable populations are able to afford the best care possible. And while 340B drugs now amount to only two percent of all medicines purchased in the U.S., this program makes an enormous impact when it comes to making drug therapy more affordable.
Hospital systems across the country – particularly those in disadvantaged, underserved and rural communities – rely significantly on the 340B program to better serve our communities. For instance, in one of our Ascension hospitals in Kansas, a woman was diagnosed with a rare, typically fatal, neuromuscular disease that affects only one out of 40,000 people, causing damage to the heart and skeletal muscles. To survive, the patient needed to take the only medication on the market, which costs $400,000 per year. Thankfully, through the 340B program, the drug’s pricing was reduced by one-third and the hospital covered the remaining cost of the drug.
While the 340B program has shown to benefit patients, there is talk of significantly scaling back the program, which would leave our most vulnerable citizens with less access to the medication and quality healthcare they desperately need. In order to transform healthcare, with drug prices rising rapidly, programs like 340B have to exist.
Our mission is to provide compassionate, personalized care to all, with special attention to persons living in poverty and those most vulnerable. Reducing the benefits of the program will compromise our ability to provide low-cost or no-cost medications to our patients who need it most.
We must bring attention to the important issue of rising drug prices and stress the importance of the 340B Drug Pricing Program for our patients.
That’s why Ascension leaders nationwide are on Capitol Hill this week to emphasize how critical of a program 340B is for our patients who are struggling to afford their prescription medications. By paying less for high-priced prescription drugs, our providers also have more resources to invest in community programs for our patients.
Ascension calls on Congress to continue looking in-depth at the issue of aggressive prescription drug price spikes and to preserve the integrity of the 340B program so we can continue providing our patients with access to life-saving affordable medications. We support policies to advance sustainable and fair drug prices and encourage innovation of new therapies. We encourage drug manufacturers, healthcare providers, legislators and regulators to work together to ensure medications are available and affordable for all who need them as we navigate the evolving landscape of value-based payments.
Henkel, FACHE, is president and CEO of Ascension Health. A subsidiary of Ascension, the nation’s leading non-profit healthcare system, Ascension Health includes hospitals, outpatient centers, and senior, home health and long-term care facilities.