Hospitals participating in the 340B program provided $67.9 billion in total benefits to their communities in 2018, the American Hospital Association (AHA) reported yesterday. Community benefits represented 13.7% of total 340B hospital expenses, the group said.
AHA broke out the 340B hospital data from a broader report showing that all tax-exempt U.S. hospitals, 340B and non-340B, provided more than $105 billion in total community benefits in 2018, the most recent year for which comprehensive data is available, the association said. Total community benefits were 13.9% of all tax-exempt hospitals’ total expenses in 2018.
In his plan to lower drug prices delivered to the White House yesterday, U.S. Health and Human Services Secretary Xavier Becerra observed that last year total sales in the 340B program were $38 billion. Earlier this year, the Health Resources and Services Administration estimated that 340B sales are approximately 6 percent of the total U.S. drug market.
The report is not likely to sway hospital critics, including drug industry groups. U.S. Sen. Chuck Grassley (R-Iowa) and other lawmakers have criticized tax-exempt hospitals for acting more like large corporations and skirting their charitable obligations. They point to instances where hospitals have aggressively pursued patients for unpaid bills. 340B hospital critics in and outside of Congress will continue to push hospitals to be more transparent about what they charge patients and how they use their 340B savings. These issues have not received much attention under a Democratically controlled Congress.
AHA reported that 340B hospitals spent $32.2 billion in 2018 on financial assistance for patients and absorbing losses from Medicaid and other means-tested government program underpayments. They spent $22.9 billion on health professions education, medical research, and cash and in-kind contributions to community groups, and $10.5 billion on net Medicare shortfall. Bad debt expense attributable to financial assistance totaled $1.8 billion.