Hospitals that participated in the 340B Drug Pricing Program before 2010 are more likely to offer uncompensated care and low-profit services compared with nonparticipating centers, according to a research letter published in JAMA Internal Medicine.
The 340B Drug Pricing Program was designed to improve revenue generation among hospitals by allowing participating centers to purchase specific outpatient drugs at a wholesale discount. Study investigators compared hospital 340B Program participants with nonparticipants in regard to the number of patients attending each center, as well as the characteristics of the patient communities. In an adjusted, multivariable analysis, researchers noted differences regarding provision of low-profit services, uncompensated care, and financial services.
General acute care nonprofit hospital (n=1224) data were linked to 340B-participating hospitals (n=660) from the Healthcare Cost Report Information System and Health Resource & Services Administration’s provider list, respectively.
Before 2004, there were fewer than 200 hospitals participating in the 340B program (categorized as “early participants”). From 2004 to 2010, a total of 927 hospitals were participating in the program (categorized as “intermediate participants”). Hospitals that participated in the 340B program after 2010 were considered “late participants,” bringing the total number of 340B-participating hospitals to 1046. Participating hospitals represented 60%, or $14 billion, in total nationwide drug spending in 2015.
Hospitals participating in the 340B program were significantly less financially stable compared with nonparticipants in 2015 (-2.11% vs -1.74%, respectively; mean percentage point [PP] difference, 2.34%; 95% CI, -3.44% to -1.24%). In addition, participants featured a higher uncompensated care burden than nonparticipants (4.10% vs 3.13%, respectively; mean adjusted PP difference, 0.08%; 95% CI, 0.38%-1.26%), yet no differences were found between the 2 groups in regard to the proportion of participants offering low-profit services (48.18% vs 36.88%; mean adjusted PP difference, 5.33%; 95% CI, -0.54% to 11.21%).
Early participants were more likely to spend a greater proportion of their budget on uncompensated care than nonparticipants (5.94% vs 3.13%; adjusted mean PP difference, 2.04%; 95% CI, 1.21% to 2.87%). Also, early participants were more likely to provide low-profit services (62.89% vs 36.88%; adjusted mean PP difference, 8.79%; 95% CI, 0.17%-17.41%).
Comparatively, intermediate participants provided more uncompensated care than nonparticipants (3.59% vs 3.13%, respectively; mean adjusted PP difference, 0.60%; 95% CI, 0.22%-0.98%). Late participants were also more likely to offer more uncompensated care than nonparticipating hospitals (3.31% vs 3.13%, respectively; mean adjusted PP difference, 0.68%; 95% CI, 0.14%-2.62%).
One limitation of this study includes the enrollment of only urban hospitals, which may reduce generalizability of the findings across rural centers.
“Recent reimbursement reforms will likely have different effects across 340B participants,” the researchers noted. “Targeting cuts might mitigate potential adverse effects on participants that provide a large amount of charitable medical care and operate at a substantial loss.”
Nikpay S, Buntin M, Conti RM. Diversity of participants in the 340B drug pricing program for US hospitals [published online May 21, 2018]. JAMA Intern Med. doi: 10.1001/jamainternmed.2018.2015