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Across America, safety-net hospitals stand as a lifeline for millions. These institutions serve patients who often have nowhere else to turn — individuals who are uninsured, underinsured, or living in communities where healthcare access is limited.
For hospitals operating on razor-thin margins, the 340B program has become an essential source of support. It’s not just about discounted medications; it’s about preserving vital services, sustaining community health initiatives, and making sure that financial hardship doesn’t determine access to care.
The Foundation of the 340B Program
Created in 1992, 340B requires drug manufacturers to sell outpatient medications at reduced prices to eligible healthcare providers. The savings generated are not retained as profit. Instead, they are reinvested in expanding access to care, funding oncology clinics, behavioral health services, HIV/AIDS treatment programs, and preventive health initiatives.
Research shows that 340B hospitals provide 60% of all uncompensated care nationally, despite representing only about 40% of hospitals.¹ Without the additional support 340B provides, many institutions would face painful decisions about scaling back services or closing programs that patients with limited access to healthcare depend on. Some hospitals would even have to close their doors altogether. The program is also critically important to health centers and other clinics serving our most vulnerable patient populations. These institutions are on shoestring budgets and 340B savings is vital to their mission.
Rising Pressures, Rising Stakes
Today, the financial pressures on safety-net hospitals are growing. Labor costs rose by 20% between 2019 and 2022,² while drug expenses continue to outpace general inflation. Supply chain disruptions and shifting reimbursement models have only added to the strain.
Against this backdrop, 340B savings have become a stabilizing force. Hospitals use these funds to absorb rising pharmaceutical costs, sustain trauma centers, expand chronic disease management programs, and maintain full-service outpatient pharmacies in medically underserved areas. 340B providers that are federal grantees like health centers and HIV clinics utilize 340B savings to cover the cost of additional wrap-around services and supports, such as transportation to appointments, free or reduced-cost health care services, food and housing assistance.
Managing Complexity with Precision
Administering a 340B program successfully requires more than participation — it demands vigilance. Covered entities must navigate rigorous eligibility tracking, compliance requirements, and shifting regulatory expectations. Mistakes can be costly, both financially and reputationally.
Hospitals that invest in real-time data management, accurate charge capture, and proactive program oversight not only protect their participation but also maximize the positive impact their 340B savings can have on patient care.
A Program Worth Protecting
340B is not a windfall — it’s a strategic reinvestment in the nation’s healthcare safety-net. As healthcare costs rise and patient needs grow more complex, protecting the integrity and intent of the 340B program is essential.
Safety-net hospitals deliver critical services to millions of Americans every year. Preserving the strength and sustainability of these institutions means strengthening 340B — and ensuring that communities in every corner of the country continue to have access to lifesaving care.
Now is the time for hospitals, policymakers, and industry stakeholders to work together to safeguard the future of 340B — because when safety-net hospitals and federally supported clinics thrive, so do the communities they serve.
The Craneware Group partners with healthcare providers to deliver the data intelligence, compliance support, and strategic insights needed to protect and maximize the benefits of 340B participation. Learn more about how we support hospitals and other covered entities committed to making a difference.
To learn more, visit thecranewaregroup.com
Jason Nickisch is a Solution Product Executive at The Craneware Group. He can be reached at jnickisch@craneware.com
¹ Source: 340B Health, “340B Program’s Role in Caring for America’s Uninsured.”
² Source: Kaufman Hall National Hospital Flash Report, 2022.
