By Alan Morgan
Rural hospitals are the front line of care for millions of Americans who can’t travel to big cities for medical treatment. Most are small, less than 25 beds, and many struggle to keep their doors open in the face of rising costs. A little-known prescription drug program called 340B helps these providers stay in business — and extend vital services to needy patients.
More than 20 years ago, Congress created the 340B drug discount program with bipartisan support to help hospitals serving high numbers of economically vulnerable people. In 2010, Congress expanded the program to rural hospitals to help them in their efforts to treat uninsured, underinsured and other patients who have difficulty getting access to care.
Under the program, eligible hospitals receive pharmaceuticals at discounted prices from drug companies. These savings are often passed on directly to outpatients. Healthcare providers also use the savings to fund dialysis, cancer and AIDS clinics as well as other services.
The positive impact of the 340B program is tangible in small towns and rural communities across America.
St. Thomas Hickman Hospital in Centerville, Tenn. reaches out to patients without cars, picks them up from home and brings them in for lunch and medical treatment. The hospital also provides free medications on a regular basis to outpatients who can’t afford them.
Cass County Hospital in Atlantic, Iowa, provides qualified outpatients a full year of medications for free. And it gives its emergency room doctors vouchers to supply medicines at no cost to patients, based on need.
At Regional Health System in the Black Hills of South Dakota, 340B savings fund patient treatment in a local detoxification clinic and a short-term crisis center.
The benefits of 340B flow far beyond the needy patients treated at America’s rural hospitals. Because savings are often passed on in low-cost or free prescriptions, people take their medications and return less to the hospital emergency room. That translates into lower costs for Medicare and Medicaid—saving a bundle of taxpayer dollars.
Millions of Americans receive care thanks to the 340B program, but it has powerful enemies in Washington. The pharmaceutical industry wants to restrict the program and some would like to kill it outright. Why? Because it cuts into drug company profits.
Fact: The pharmaceutical industry turns a $7.5 billion per year profit on sales through the 340B program to hospitals and related providers. We think that’s plenty.
If Big Pharma wins, hard-working Americans in the heartland of the country will lose as hospitals cut back on prescription discounts, treatment and services. Many of our hospitals and clinics would have to close altogether.
That would be a travesty we can’t let happen.
Alan Morgan is chief executive officer of the National Rural Health Association based in Leawood, Kan.