02 Jun 340B Program Helps Strapped Hospitals Stay Financially Afloat
By 340B Matters
The pandemic has not only disrupted American life and caused more than 100,000 deaths, it is also wreaking havoc on the financial health of thousands of safety-net hospitals across the country.
That includes hundreds of rural hospitals that were already in dire budget straits before the pandemic and also urban and suburban hospitals dealing with steep drops in elective surgery and other revenue-generating services. Many hospitals are also losing money because of plummeting regular emergency room visits due to fears of the coronavirus.
The American Hospital Association estimates hospitals will lose $203 billion by June due to extra expenses and revenue shortfalls related to the pandemic.
“America’s hospitals and health systems have stepped up in heroic and unprecedented ways to meet the challenges,” said AHA President and CEO Rick Pollack. “However, the fight against this virus has created the greatest financial crisis in history for hospitals and health systems.”
Part of the problem is that many coronavirus patients have recently lost their jobs – and health insurance. Few can afford COBRA as a bridge and some later qualify as Medicaid patients months later, a category with low reimbursement rates for medical facilities. An estimated 27 million people lost their health insurance between March and May, according to the Kaiser Family Foundation report.
But there is a ray of good news. Many of these providers are part of the federal 340B Drug Discount Program that allows them to buy medications for less since they treat high numbers of underserved patients. The savings from the program are helping these facilities stay open to treat the sick.
Unfortunately, Big Pharma is working behind the scenes in Washington, DC, to curtail the 340B program. The drug industry doesn’t like giving up any profits, even to help safety-net hospitals during the worst national health crisis in a century.
The University of Washington Medical Center is a case in point. It recently furloughed 4,000 workers citing coronavirus expenses. The health system is facing a $500 million budget shortfall by the end of the summer.
Given the financial strains, Sen. Ben Sasse, (R-Neb.) has introduced a bill to give 340B hospitals flexibility during the pandemic to remain eligible for the program. We applaud Sen. Sasse’s efforts and those of 122 other members of Congress who signed onto a bipartisan letter to congressional leaders asking for the same.
The 340B Drug Discount Program is essential to helping safety-net providers stay operating during the pandemic – and into the future.
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