Cuts to the 340B program threaten rural hospitals


The 340B program provides Americans of limited means with access to needed care by requiring drug companies to discount the prices they charge healthcare facilities like mine — Boone County Hospital in Iowa — which together take care of the majority of this vulnerable population.

The savings achieved by those discounts provide safety-net hospitals like ours the ability to provide critically-needed services. Our 25-bed critical access hospital uses its 340B savings to provide the only hyperbaric wound care center within a 60-mile radius — a necessity for many patients living with diabetes, infections, or certain types of trauma.

We also are able to deliver about 150 babies per year, a service that often is undercompensated by public health programs. Our outpatient infusion center allows the residents of Boone County and surrounding rural counties to receive much-needed therapies locally for their cancer, Crohn’s disease, rheumatoid arthritis, and many other conditions. These crucial services would be in jeopardy if the 340B program were rolled back or eliminated.

In many rural communities, the stakes are even higher, because those savings also help to support our basic operating expenses and keep our doors open to the community. At Boone County Hospital, our annual 340B savings are about $1.4 million, and we provide nearly $30 million a year in uncompensated care to patients who need it.

While the 340B savings that come from drug companies are relatively small – the discounts amount to less than 2 percent of overall drug sales in the U.S. — they go a long way toward shoring up our healthcare safety net so that the neediest patients can get the care they require.

The debate over 340B comes at a critical time for those of us living and working in rural communities. Rural hospitals are becoming an endangered species. Since 2010, more than 82 rural hospitals have closed, according to the University of North Carolina Sheps Center for Health Services Research. According to the National Rural Health Association, nearly another 700 rural facilities are at risk of closure. The 340B program is critical to the viability of rural hospitals, which operate on the thinnest of financial margins.

On average, 340B saves each rural hospital about $10,000 a year. That may not sound like much, but in a small town with only one hospital, that can be the difference between keeping a hospital open and losing it forever.

Yet, the 340B program has been under attack, in particular by the pharmaceutical industry. Bills have been introduced in Congress that would freeze the program or, in some cases, cut it back.

But legislation introduced by Reps. David McKinley, R-W.Va., and Mike Thompson, D-Calif., would protect the program and reverse recent Medicare payment cuts to many 340B hospitals, and their bill has a total of nearly 200 sponsors from both sides of the aisle. This bill needs to be passed as soon as possible.

A recent report by 340B Health found that hospitals participating in the 340B program provide 60 percent of all uncompensated care in the country despite representing only 38 percent of acute care hospitals. They also care for large numbers of low-income patients — on average 42 percent of their patients are on Medicaid. And they are able to offer critical services, such as opioid addiction treatment, HIV/AIDS care, and trauma care, that are often poorly reimbursed by Medicaid and other public programs.

For nearly all of the 340B program’s 25 years in existence, the program has achieved broad bipartisan support. With the number of uninsured Americans starting to rise again and the costs of drugs continuing to skyrocket out of reach, this is a time for lawmakers to put aside their political differences and pull together to protect and preserve successful programs such as 340B.