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I'll not dispute the impact on expansion and consolidation, but I will say in recent months I have seen a number of hit pieces on the 340B program, mostly bankr

I'll not dispute the impact on expansion and consolidation, but I will say in recent months I have seen a number of hit pieces on the 340B program, mostly bankrolled by pharma companies (not this one just calling out the trend). The exact implementation might be flawed, but if 340b is eliminated it will kill many hospitals in underserved communities. So any plan to change 340B should really also explain how to fund these critical hospitals. In the way that surgeries used to be the "money maker" to subsidize other expensive service lines like an ED, pharmacy has filled that gap in recent years. It is less hospitals getting rich off overcharging insurance for drugs and more hospitals overcharging insurers for drugs since everything else they do is a drain on finances.

dfsnow 8mo ago
Hi, I wrote this article and largely agree with you. 340B is important and without it many hospitals likely wouldn't survive. However, it's pretty evident at this point that 340B has expanded beyond its original intent. For example, Northwestern University (in the middle of downtown Chicago) got itself reclassified as a rural hospital in order to participate in the program. Moreover, it's grown extremely rapidly over the past ~5 years, and the gravity of the program is starting to create bizarre second-order effects like the one outlined. My intent with this article is just to highlight some of those effects, not to advocate for eliminating 340B. Also, not bankrolled by pharma, just a researcher for Turquoise Health (a healthtech startup). I get to dig around in their data and publish occasionally, but editorial control / opinions are my own.
- shigawire 8mo ago
  Thanks for the response, I'll update my post to be clear I was not calling this post an astroturfing attempt.
  - dfsnow 8mo ago
    Thanks! Good to see other health policy wonks on HN
- bilbo0s 8mo ago
  For example, Northwestern University (in the middle of downtown Chicago) got itself reclassified as a rural hospital in order to participate in the program. This is also a bit misleading though right? Northwestern was obliged to put 11 other hospitals and something on the order of like 150 to 200 clinic/other locations on its books largely for the purposes of access. So that rural communities across northern Illinois can also have the same access as people in Chicago. The fact is, they are a rural healthcare system. Because the options that were in those locations previously were unable to make a long term go of it.
  - dfsnow 8mo ago
    I was being a bit glib/imprecise before, but I'm specifically talking about the Northwestern Memorial campus downtown Chicago [0]. That location qualifies for 340B as a Rural Referral Center (RRC), and got itself reclassified by CMS/HRSA as rural to do so, despite being in the middle of downtown. RRCs need to meet a lower threshold of Disproportionate Share Hospital (DSH) adjustment percentage (8% vs the usual 11.75%). Northwestern Memorial needs to be an RRC because it doesn't meet the higher DSH threshold. AFAIK, the other hospitals/clinics under the Northwestern umbrella don't really factor into whether the downtown Northwestern Memorial campus qualifies for 340B (insofar as they all have their own CCNs and qualify independently). In this case, Northwestern Memorial qualifies because it a) got reclassified as rural b) became an RRC (likely based on its staff specialty mix) c) meets the RRC DSH threshold of >= 8%. Northwestern Memorial does treat a lot of rural patients, so maybe it does deserve 340B. That said, it seems clear that it's not they type of struggling safety-net/rural hospital 340B was originally intended to subsidize. [0] https://340bopais.hrsa.gov/CeDetails/78783 https://340bopais.hrsa.gov/CeDetails/78783
    - bilbo0s 8mo ago
      AFAIK, the other hospitals/clinics under the Northwestern umbrella don't really factor into whether the downtown Northwestern Memorial campus qualifies for 340B The money is shared at the system level. The referrals are to/from other hospitals/clinics in the system. Many of the other facilities in the system, exist because of Northwestern Memorial. This is what needs to be done to ensure access.
bastawhiz 8mo ago
It's incredible how far we'll bend over backwards as a country to avoid single payer healthcare. It's especially ironic that the most common argument against it is "taxes" when ...the outcome here is higher taxes.
- wakawaka28 8mo ago
  Single payer would reduce choice and increase costs. People fantasize that price caps would fix everything, but they can't. Healthcare is just a resource and people pay high prices for it due to limited availability and regulatory requirements.
  - duxup 8mo ago
    Do we really know what single payer would do with any certainty? There's not really been a real test what a healthcare system with any kind of "natural" market forces at work. The current system is just a mess of tax breaks, middle man companies, hidden pricing, strange federal and local laws, employer choices and so on... Even when someone talks about single payer, I'm still unsure what they imagine that looks like.
    - wakawaka28 8mo ago
      Similar things have been tried in other countries, and they have different failure modes. Ultimately the basic laws of economics predict with high accuracy what would happen. Now, I will grant that the current system is not based on the free market and might be substantially improved by changing to a different system, but the free market would solve problems created by all of the interventions that have been tried. Healthcare might still be unaffordable for some, but that is true of many scarce and desirable resources anyway.
  - bastawhiz 8mo ago
    Bullshit. The rest of the industrialized world is laughing at you for saying that. There are zero credible studies that show that socialized healthcare increases costs and plenty of bankrupt Americans because of our broken healthcare system. I went to the doctor because of chronic acid reflux. They charged me a copay. They couldn't help so they referred me to a gastro doc. The gastro charged me a copay (more because it was out of network—there's no in network gastro doctors in my city). I was given an upper endoscopy, but insurance only covered 10% of the cost of the procedure. I spent $500 on the medication I was prescribed afterwards. I have "good" insurance through my employer. If I didn't have insurance, I wouldn't have been able to get treated. The fantasy universe that you're describing is the one we live in: I have almost no choice, nothing is in network, and I spent $10k on healthcare on top of what's already taken out of my pay. Nobody in countries with socialized medicine has any of these problems.
xnx 8mo ago
> it will kill many hospitals in underserved communities. At some point it makes more sense to move every person from their remote hamlet than to create a hundreds different programs and exceptions to deliver broadband, groceries, and healthcare there. Many of these towns are leftover from when farming was 100x more labor intensive or industry had to be located next to a river.

dfsnow 8mo ago

Hi, I wrote this article and largely agree with you. 340B is important and without it many hospitals likely wouldn't survive. However, it's pretty evident at this point that 340B has expanded beyond its original intent. For example, Northwestern University (in the middle of downtown Chicago) got itself reclassified as a rural hospital in order to participate in the program. Moreover, it's grown extremely rapidly over the past ~5 years, and the gravity of the program is starting to create bizarre second-order effects like the one outlined. My intent with this article is just to highlight some of those effects, not to advocate for eliminating 340B. Also, not bankrolled by pharma, just a researcher for Turquoise Health (a healthtech startup). I get to dig around in their data and publish occasionally, but editorial control / opinions are my own.

shigawire 8mo ago
Thanks for the response, I'll update my post to be clear I was not calling this post an astroturfing attempt.
- dfsnow 8mo ago
  Thanks! Good to see other health policy wonks on HN
bilbo0s 8mo ago
For example, Northwestern University (in the middle of downtown Chicago) got itself reclassified as a rural hospital in order to participate in the program. This is also a bit misleading though right? Northwestern was obliged to put 11 other hospitals and something on the order of like 150 to 200 clinic/other locations on its books largely for the purposes of access. So that rural communities across northern Illinois can also have the same access as people in Chicago. The fact is, they are a rural healthcare system. Because the options that were in those locations previously were unable to make a long term go of it.
- dfsnow 8mo ago
  I was being a bit glib/imprecise before, but I'm specifically talking about the Northwestern Memorial campus downtown Chicago [0]. That location qualifies for 340B as a Rural Referral Center (RRC), and got itself reclassified by CMS/HRSA as rural to do so, despite being in the middle of downtown. RRCs need to meet a lower threshold of Disproportionate Share Hospital (DSH) adjustment percentage (8% vs the usual 11.75%). Northwestern Memorial needs to be an RRC because it doesn't meet the higher DSH threshold. AFAIK, the other hospitals/clinics under the Northwestern umbrella don't really factor into whether the downtown Northwestern Memorial campus qualifies for 340B (insofar as they all have their own CCNs and qualify independently). In this case, Northwestern Memorial qualifies because it a) got reclassified as rural b) became an RRC (likely based on its staff specialty mix) c) meets the RRC DSH threshold of >= 8%. Northwestern Memorial does treat a lot of rural patients, so maybe it does deserve 340B. That said, it seems clear that it's not they type of struggling safety-net/rural hospital 340B was originally intended to subsidize. [0] https://340bopais.hrsa.gov/CeDetails/78783 https://340bopais.hrsa.gov/CeDetails/78783
  - bilbo0s 8mo ago
    AFAIK, the other hospitals/clinics under the Northwestern umbrella don't really factor into whether the downtown Northwestern Memorial campus qualifies for 340B The money is shared at the system level. The referrals are to/from other hospitals/clinics in the system. Many of the other facilities in the system, exist because of Northwestern Memorial. This is what needs to be done to ensure access.

bastawhiz 8mo ago

It's incredible how far we'll bend over backwards as a country to avoid single payer healthcare. It's especially ironic that the most common argument against it is "taxes" when ...the outcome here is higher taxes.

wakawaka28 8mo ago
Single payer would reduce choice and increase costs. People fantasize that price caps would fix everything, but they can't. Healthcare is just a resource and people pay high prices for it due to limited availability and regulatory requirements.
- duxup 8mo ago
  Do we really know what single payer would do with any certainty? There's not really been a real test what a healthcare system with any kind of "natural" market forces at work. The current system is just a mess of tax breaks, middle man companies, hidden pricing, strange federal and local laws, employer choices and so on... Even when someone talks about single payer, I'm still unsure what they imagine that looks like.
  - wakawaka28 8mo ago
    Similar things have been tried in other countries, and they have different failure modes. Ultimately the basic laws of economics predict with high accuracy what would happen. Now, I will grant that the current system is not based on the free market and might be substantially improved by changing to a different system, but the free market would solve problems created by all of the interventions that have been tried. Healthcare might still be unaffordable for some, but that is true of many scarce and desirable resources anyway.
- bastawhiz 8mo ago
  Bullshit. The rest of the industrialized world is laughing at you for saying that. There are zero credible studies that show that socialized healthcare increases costs and plenty of bankrupt Americans because of our broken healthcare system. I went to the doctor because of chronic acid reflux. They charged me a copay. They couldn't help so they referred me to a gastro doc. The gastro charged me a copay (more because it was out of network—there's no in network gastro doctors in my city). I was given an upper endoscopy, but insurance only covered 10% of the cost of the procedure. I spent $500 on the medication I was prescribed afterwards. I have "good" insurance through my employer. If I didn't have insurance, I wouldn't have been able to get treated. The fantasy universe that you're describing is the one we live in: I have almost no choice, nothing is in network, and I spent $10k on healthcare on top of what's already taken out of my pay. Nobody in countries with socialized medicine has any of these problems.

xnx 8mo ago

> it will kill many hospitals in underserved communities. At some point it makes more sense to move every person from their remote hamlet than to create a hundreds different programs and exceptions to deliver broadband, groceries, and healthcare there. Many of these towns are leftover from when farming was 100x more labor intensive or industry had to be located next to a river.