Healthcare Policy Bill

Problem Statement

In the last few years, the 340B Drug Pricing Program has been associated with significant unpredictability, partially due to conflicts arising from the actual intent of the program and the regulatory authority by the Health Resources and Services Administration (HRSA). 

Overview

The 340B program was created by the Congress in 1992 to shield safety net hospitals from the soaring drug prices in the United States. The program was designed to permit some safety-net hospitals and other relevant entities to acquire outpatient drugs at discounted rates from the respective manufacturers. This strategy was to spread Federal resources in such a way that uninsured, low-income and vulnerable populations receive comprehensive services. According to AAMC News, some of the proceeds from the 340B program are used to sponsor community grants whose aim is to enhance neighborhood clinics that benefit about 750,000 low-income populations per year (2018). The proceeds are also used to facilitate obesity prevention and nutrition education programs for students in regions where about 75% of the students are qualified for free lunch programs. 

The Congress in conjunction with the Association of American Medical Colleges (AAMC) have been working together to safeguard the 340B program urging policymakers to repeal the Medicare. Mike Thompson and David McKinley are the authors who presented the bill to the House (H.R 4392) (2018). The House Energy & Commerce Committee has been at the forefront of the reforms to the 340B program, with Buddy Carter and Chris Collins advocating for reform legislation that could systemize a majority of the unresolved issues. According to Conti & Bach, there has been a substantial increase in participation in the 340B program in the last few years such 16,500 entity sites were highlighted with affiliate sites summing up to about 3,200 in 2011 (2015). These figures have doubled since 2001. 

Expected Outcomes

A majority of the stakeholders of the bill affirm that its enactment will allow qualified hospitals to access notable discounts, especially on outpatient drugs. The 340B healthcare centers can create profits through prescription drugs, particularly from patients who are covered by Medicare or private insurance (AAMC News, 2018). The hospitals can also stretch the savings obtained from the program to provide an array of services to uninsured and low-income patients. 

Problems

Critics maintain that some healthcare facilities extort drug discounts to create profits instead of redirecting the proceeds to programs that would help the poor or accord discounts to insurers and patients (Conti & Bach, 2015). The profits obtained from the 340B program can be redirected to serve better insured and more affluent patients, which contradicts the program’s original goals. 

Existing Policy related to the topic

340B is a segment of the Veterans Health Care Act that was established in 1992 with the intention of offering assistance to uninsured and low-income patients. The existing policy was enacted in 1992 to enhance delivery of healthcare services to veterans, to stretch the authority in regards to health care contracts and to facilitate discounts on certain pharmaceuticals, especially those that are acquired by the department of veterans. The Act clearly outlines the particulars of drug pricing contracts and the limitations pertaining to the purchase of drugs in Federal Agencies and the Department of Veteran Affairs. 

Options

The pros and cons of expanding healthcare facilities as a result of a rapid increase in profits for 340B hospitals could potentially enhance the tendency to divert towards the better insured and more affluent patients. Research conducted by Conti and Bach indicates that investments from the profits such as newly established hospitals serve vulnerable communities, which indicates that the program’s growth is consistent with the Congress’ initial intent (2015). The enactment of the bill could play a significant role in fixing the healthcare problem. According to the Biblical worldview, uplifting the poor and the vulnerable members of the community are one of the ways of expressing charity to others hence the bill would effectively solve the problem addressed. The program allows for the provision of services in a way that favors a portion of uninsured and low-income patients in certain facilities, which generally promotes common good other than discrimination. 

Recommendation

There is inadequate data to ascertain the effects of the expansion of hospitals registered under the 340B program on Medical care expenditures and the quality of the services rendered. This does not underscore the fact that transparent and prompt national assessments on the effectiveness of the 340B program could benefit the initial target populations of the Veterans Health Care Act. In the future, one could maintain an analytical perspective that aims at exploring examples of how hospitals utilize the savings obtained from the 340B program to determine the influence of the policy on the target population. 

References

AAMC News. (2018). Preserving Critical Support for Patients: The 340B Drug Pricing Program. Available from: https://news.aamc.org/for-the- media/article/340b_drug_pricing_program/

Conti, R., & Bach, P. (2015). The 340B Drug Discount Program: Hospitals Generate Profits by Expanding To Reach More Affluent Communities. Health Affairs, 33(10), 1786-1792. 

Mody, P., & Blackwood, K. (2018). 5 Health Care Policy Issues to follow in 2018. Available from: https://www.arnoldporter.com/en/perspectives/publications/2018/01/5-health-care- policy-issues-to-follow-in-2018