default avatar
Welcome to the site! Login or Signup below.
Logout|My Dashboard

One Surprising Cause Of Health Care Cost Increases

Font Size:
Default font size
Larger font size

Posted: Thursday, January 30, 2014 3:44 am | Updated: 1:32 am, Fri Jan 31, 2014.

(NAPSI)—Many Americans are asking their representatives what’s being done about a well-intentioned health care cost-cutting program—that’s actually having the opposite effect.

The original idea was to help not-for-profit hospitals cover some of the costs associated with treating low-income patients by making pharmaceutical companies provide large discounts to hospitals that treat many Medicaid patients. The discounts were to be for medicines used in an outpatient setting, such as chemotherapy drugs.

The Problem

The program, called 340B, is now used by many hospitals to get discounts on medicines for insured patients. The hospitals then pocket the difference—unfortunately, they are not required to pass on savings to patients—and use it to fund executive salaries and other unintended uses. As the Affordable Care Act expands Medicaid eligibility, more patients on Medicaid will mean more hospitals are eligible for discounts.

Additionally, some hospitals with the benefit of 340B discounts are buying up—or partnering with—private clinics, which would not on their own qualify for discounts.

According to The Journal of the American Medical Association (JAMA), this drives up the cost of care. For example, JAMA says, the widening disparity in drug revenue between 340B and non-340B hospitals shifts patients out of the comfort of a private clinic setting and into the hospital setting, where care is typically more expensive than the same care delivered in the physician’s office. The net result is an overall increase in health care spending.

A recent study from Avalere Health found that chemotherapy costs as much as 25 percent more in the hospital outpatient setting than in dedicated cancer clinics.

What’s more, 340B hospitals are now allowed to contract with for-profit pharmacies in order to sell discounted medicines at full price to patients.

An Answer

The program has now received attention from Capitol Hill. Senator Charles Grassley (R-Iowa) sent a letter of inquiry to a major drugstore chain referencing a claim that 340B would make the pharmacy a minimum of $250 million over five years.

Grassley asked the pharmacy to detail its profits from the 340B program, as well as to explain whether it would reinvest that money back into underserved communities.

What You Can Do

You can express an opinion on this or any issue to your senators and representatives at www.senate.gov and www.house.gov.


On the Net:North American Precis Syndicate, Inc.(NAPSI)

Rules of Conduct

  • 1 Use your real name. You must register with your full first and last name before you can comment. (And don’t pretend you’re someone else.)
  • 2 Keep it clean. Please avoid obscene, vulgar, lewd, racist or sexually oriented language.
  • 3 Don’t threaten. Threats of harming another person will not be tolerated.
  • 4 Be truthful. Don't lie about anyone or anything. Don't post unsubstantiated allegations, rumors or gossip that could harm the reputation of a person, company or organization.
  • 5 Be nice. No racism, sexism or any sort of -ism that is degrading to another person.
  • 6 Stay on topic. Make sure your comments are about the story. Don’t insult each other.
  • 7 Tell us if the discussion is getting out of hand. Use the ‘Report’ link on each comment to let us know of abusive posts.
  • 8 Share what you know, and ask about what you don't.
  • 9 Don’t be a troll.
  • 10 Don’t reveal personal information about other commenters. You may reveal your own personal information, but we advise you not to do so.
  • 11 We reserve the right, at our discretion, to monitor, delete or choose not to post any comment. This may include removing or monitoring posts that we believe violate the spirit or letter of these rules, or that we otherwise determine at our discretion needs to be monitored, not posted, or deleted.

Welcome to the discussion.



Mailing List

Subscribe to a mailing list to have daily news sent directly to your inbox.

  • Breaking News

    Would you like to receive breaking news alerts? Sign up now!

  • News Updates

    Would you like to receive our daily news headlines? Sign up now!

  • Sports Updates

    Would you like to receive our daily sports headlines? Sign up now!

Manage Your Lists