Hospital-affiliated clinics are using a federal program intended to provide low-income patients with discounted drugs to serve wealthier patients and likely generate profits, according to a study in the October Health Affairs (2014 [doi:10.1377/hlthaff.2014.0540]).
Rena M. Conti, Ph.D., and Dr. Peter B. Bach found that clinics that registered for the federal 340B program in 2004 or later serve more affluent communities than those that registered before 2004.
The findings support recent criticism that the 340B program is being used to enrich hospitals and affiliated clinics, rather than to serve vulnerable patient populations, the authors noted.
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New findings indicate that hospital-affiliated clinics operating under the federal 340B program are simply making more money for themselves instead of treating low-income patients.
Named for section 340B of the Veterans Health Care Act of 1992, the medication program is aimed at providing aid to low-income and uninsured patients. The 340B program gives registered 340B entities, such as hospitals and other medical care providers, access to outpatient drug discounts similar to those offered through the Medicaid Drug Rebate Program.
To evaluate the patient populations of registered 340B health centers, Dr. Conti of the University of Chicago and Dr. Bach of Memorial Sloan-Kettering Cancer Center, New York, matched 340B program hospital data with Census Bureau community data. Specifically, the researchers compared data for 960 hospitals and 3,964 affiliated clinics registered with the 340B program in 2012 with the socioeconomic characteristics of their communities from the Census Bureau’s American Community Survey. They focused on 340B hospitals that also participated in Medicare’s disproportionate-share hospital (DSH) program.
Results showed that generally, DSH hospitals that registered for the 340B program in 2004 or later served communities with fewer low-income people (P < .05), compared to DSH hospitals that registered before 2004. Clinics affiliated with 340B entities that registered in 2004 or later served wealthier communities with higher levels of insurance (P < .01), compared with clinics that registered before 2004. In general, hospitals that registered in 2003 or before, had clinics that served significantly poorer communities than their parent institutions compared to facilities that registered after 2004 (P < .01), the study found.
Dr. Conti and Dr. Bach noted that 340B hospitals can generate profits by prescribing drugs to patients who have private insurance or Medicare. Hospitals can then potentially pocket the difference between the discounted price and the higher reimbursement paid by insurers and patients.
The study’s findings are consistent with recent claims by legislators that the 340B program is being misused by hospitals to gain profits. The researchers added that further national assessments of the 340B program are a necessary policy goal.
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