Defending the 20-year drug savings program
An October Health Affairs study criticized the 340B drug discount program by suggesting that hospitals that joined the program in 2004 or after served wealthier communities that may not be in need of the drug discounts. While the study certainly supports the pharmaceutical industry's attempts to attack and dismantle the 340B program, there's much more to the data.
Both Safety Net Hospitals for Pharmaceutical Access and the American Hospital Association offer deeper insights into the report. But from a quick analysis, there are five glaring oversights in the Health Affairs study:
- The main assertion of the report, that recently-added clinics serve wealthier communities, is unproven by the Census income data. This data only represents the income of the neighbors of the DSH hospitals and clinics, rather than the patients they actually serve.
- The difference in average household incomes among all the locations of 340B hospitals and clinics is approximately $5,000 — nominal in today's economy.
- Despite the mean incomes, both the DSH hospitals and their affiliated clinics are located in areas with a higher-than-average percentage of households living below the federal poverty level, when compared to the national average of 14.5 percent.
- Apparent growth in the number of hospital-based clinics participating in 340B is the result of a change in reporting by the Health Resources and Services Administration (HRSA) that now requires clinics to have a unique listing in HRSA's database for each service they provide. As a result of this change, a single clinic may have added up to 20 listings or more to comply with the new rules.
- Real growth in the number of hospital-based clinics participating in 340B is fueled partly by changes that resulted from the Patient Protection and Affordable Care Act in 2010 and partly from trends affecting healthcare overall, including coordination-of-care initiatives that have led to an increase in physician practice-hospital affiliations, as well as a general trend toward outpatient versus inpatient care intended to reduce hospital admissions.
The original intent of the 340B program was to help safety net facilities "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services" by reducing the amount they spend on outpatient drugs (see H.R. Rep. No. 102-384(II), at 12 (1992)). Its intent was not, as the study's authors assert, specifically "to help low-income and uninsured patients." We must be clear on this fact.
The 340B program is an important part of the continued viability of America's safety net providers, who turn no one away, regardless of their ability to pay. The question no one in these pro-pharmaceutical industry articles and blogs is asking is: What will happen to the millions of patients that rely on our safety-net providers if they close their doors?
The opinions expressed in this article are the author's own and do not necessarily reflect the views of Sentry Data Systems, Inc.
Lidia A. Rodriguez-Hupp is senior vice president and 340B compliance officer at Sentry Data Systems. With more than 14 years' experience in 340B software and program maintenance, and six years in various staff positions within the US House of Representatives, Lidia is uniquely suited for the challenges of 340B compliance. In her current role as SVP and 340B Compliance Officer for Sentry Data Systems, she oversees the 340B audit team, the client training team and the professional services department. These teams act as internal consultants on Sentry's high-priority projects and also support client requests that require a high level of expertise. Lidia is active in her local community as a mentor for Women of Tomorrow since 2008 and as a board member on the Boca Raton Community High School PTSA and School Advisory Council.
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