US Hospital Service Availability and New 340B Program Participation

Author:

Owsley Kelsey M.12,Hasnain-Wynia Romana34,Rooks Ronica N.5,Tung Gregory J.6,Mays Glen P.6,Lindrooth Richard C.6

Affiliation:

1. Department of Health Policy and Management, University of Arkansas for Medical Sciences, Little Rock

2. Winthrop P. Rockefeller Cancer Institute, University of Arkansas for Medical Sciences, Little Rock

3. Office of Research, Denver Health and Hospital Authority, Denver, Colorado

4. Department of Medicine, University of Colorado-Anschutz Medical Campus, Aurora

5. Department of Health and Behavioral Sciences, University of Colorado Denver, Denver

6. Department of Health Systems, Management, and Policy, Colorado School of Public Health, University of Colorado-Anschutz Medical Campus, Aurora

Abstract

ImportanceThe US 340B Drug Pricing Program enables eligible hospitals to receive substantial discounts on outpatient drugs to improve hospitals’ financial sustainability and maintain access to care for patients who have low income and/or are uninsured. However, it is unclear whether hospitals use program savings to subsidize access as intended.ObjectiveTo evaluate whether the 340B program is associated with improvements in access to hospital-based services and to test whether the association varies by hospital ownership.Design, Setting, and ParticipantsDifference-in-differences and cohort analysis from 2010 to 2019. Never and newly participating 340B general, acute, nonfederal hospitals in the US using data from the American Hospital Association’s Annual Survey of Hospitals merged with hospital and market characteristics. Data were analyzed from January 1, 2023, to January 31, 2024.ExposuresNew enrollment in 340B between 2012 and 2018.Main Outcomes and MeasuresTotal number of unprofitable service lines, ie, substance use, psychiatric (inpatient and outpatient), burn clinic, and obstetrics services; and profitable services, ie, cardiac surgery and orthopedic, oncologic, neurologic, and neonatal intensive services.ResultsThe study sample comprised a total of 2152 hospitals, 1074 newly participating and 1078 not participating in the 340B program. Participating hospitals were more likely than nonparticipating hospitals to be critical access and teaching hospitals, have higher Medicaid shares, and be located in rural areas and in Medicaid expansion states. At public hospitals, participation in the 340B program was associated with a significant increase in total unprofitable services (0.21; 95% CI, 0.04 to 0.38; P = .02) and marginal increases in substance use (5.4 percentage points [pp]; 95% CI, –0.8 pp to 11.6 pp; P = .09) and inpatient psychiatric (6.5 pp; 95% CI, –0.7 pp to 13.7 pp; P = .09) services. Among nonprofit hospitals, there was no significant association between 340B and service offerings (profitable and unprofitable) except for an increase in oncologic services (2.5 pp; 95% CI, 0.0 pp to 5.0 pp; P = .05).Conclusions and RelevanceThe finding of the cohort study indicate that participation in the 340B program was associated with an increase in unprofitable services among newly participating public hospitals. Nonprofit hospitals were largely unaffected. These findings suggest that public hospitals responded to 340B savings by improving patient access, whereas nonprofits did not. This heterogeneous response should be considered when evaluating the eligibility criteria for the 340B program and how it affects social welfare.

Publisher

American Medical Association (AMA)

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