340B hospitals spend less than other institutions for Part B drugs

A new study by an advocacy group for safety-net hospitals say that participants in the 340B drug discount program spend less per patient under Medicare Part B for drugs than hospitals outside of 340B, while still caring for a population of sicker patients.

That was the conclusion of the study by 340B Health, undertaken by healthcare consulting firm Dobson DaVanzo. 

Among hospitals that were reimbursed for at least one of the top 50 drugs in the 340B program, drug spending per Medicare beneficiary in 340B hospitals was $240.92 per patient, according to the study. At similar non-340B hospitals, it was $556.02 per patient, or 60 percent higher. That data also includes spending at physician offices, which are not generally 340B participants.

Across all categories of drugs, spending at 340B hospitals for drugs was $112.15 per patient compared to $128.91 for patients treated in non-340B covered entities.

Officials with 340B say the study vindicates a program that has come under criticism for potential abuse.

"The 340B program gives hospitals with high volumes of low-income and other vulnerable patients discounts on pharmaceuticals," 340B Health Chief Executive Officer Ted Slafsky said in a statement. "This study confirms that hospitals accessing 340B savings are treating significantly higher numbers of vulnerable patients and that 340B hospitals are not providing more drugs or more expensive drugs than non-340B providers."

The 340B program has come under fire for the practices of some hospitals. A few larger institutions have added tens of millions of dollars to their bottom lines by reselling discounted drugs to insured patients at higher prices. That conduct has drawn scrutiny from some members of Congress, but efforts to try and significantly modify the 340B program have met with limited success.

A Government Accountability Office report issued last year also recommended removing some of the financial incentives for hospitals to participate in the 340B program. The federal government will issue sweeping new guidance regarding the program later this year.

To learn more:
- read the 340B Health study (.pdf)
- check out the 340B Health statement