A Well being Affiairs Vanguard article by means of DiGiorgio (2023) argues the 340B has outlived its functions. He writes:
By means of mandating that drug corporations give a big bargain to lined entities, nearly all of which can be hospitals with disproportionate percentage or important get right of entry to designations, the 340B program was once supposed to offer a monetary buffer for establishments comparable to the only the place I paintings. Then again, the 340B program has grow to be gamed by means of massive companies to extend income. It’s now not serving its authentic intent.
This system has grown swiftly amongst hospitals that serve wealthier affected person populations. 340B hospitals are increasing into extra prosperous neighborhoods, and they’re conscious of payer combine as they transfer into spaces with fewer publicly insured sufferers. 340B establishments are much more likely to steer clear of counties with decrease revenue ranges and extra uninsured sufferers. Whilst Rep. Waxman argues that those revenues are getting used to extend carrier traces for low-income sufferers, the proof counsel that 340B hospitals didn’t build up take care of underserved populations or build up their charges of uncompensated care. There are lots of reforms that would maintain safety-net investment whilst curtailing abuses of the 340B machine
One key piece of proof DiGriogio cites is a paper by means of Mulligan et al. (2021). This find out about in finding strategic habits amongst hospitals. Hospitals that recieve disproportionate percentage hospitals (DSH) bills are eligible for 340B if their DSH adjustment–a measure that identifies hospitals that deal with a disproportionate percentage of low revenue Medicare or Medicaid sufferers–is above 11.75%. Mulligan and co-authors used knowledge from Healthcare Value File Knowledge Device (HCRIS) to inspect if hospitals are adjusting their DSH to achieve eligibility. As a result of investor-owned hospitals aren’t eliigble for 340B, one would be expecting no strategic habits from those hospitals. The authors use a McCrary density assessments to evaluate whether or not the noticed distinction in density of hospitals slightly below and above the 11.75% threshold was once considerably better than what could be anticipated accidentally by myself. The authors in finding that:
In 2014–2016, the collection of hospitals will increase by means of 41% simply above the 340B eligibility threshold. McCrary density assessments discovered this build up to be statistically vital throughout a spread of bandwidths in 2014–2016 (p < 0.01)…We discovered no similar alternate amongst hospitals ineligible for the 340B program. Those knowledge are in step with the speculation that some hospitals regulate their DSH to achieve 340B eligibility.
You’ll be able to learn the entire Mulligan et al. (2021) paper right here.