Anthony DiGiorgio, DO, MHA, a physician at the University of California, San Francisco, criticized hospital executives planning to attend a California conference on the 340B Drug Pricing Program, saying the program’s subsidies are claimed to help low-income patients but are largely used to increase hospital revenue.
“Nothing says ‘safety net’ like hospital executives fleeing winter to San Diego to attend a beachside conference on how to defend a subsidy they claim helps poor patients but is mostly used to pad margins and buy real estate,” said DiGiorgio, Assistant Professor.
The comments came after an announcement from 340B Health regarding its Winter Coalition Conference scheduled for February 9–11 in San Diego, California. The organization said that the event will concentrate on policy, advocacy, and the future of the 340B program. According to the announcement, Maureen Testoni, president and chief executive officer of 340B Health, is slated to speak at the conference. The organization described Testoni as a leading expert on the program and indicated her session would provide insight into ongoing policy debates surrounding 340B.
Created in 1992, the 340B Drug Pricing Program allows eligible hospitals and clinics to purchase outpatient drugs at discounted prices. It was intended to help safety net providers stretch limited resources and expand care for low-income and uninsured patients. Federal data show that the program has expanded significantly over the past decade. According to the Health Resources and Services Administration (HRSA), discounted drug purchases under the program have grown from approximately $6 billion in 2015 to more than $66 billion annually.
Current law does not require hospitals to pass 340B savings directly to patients, and there are no federal rules governing how this revenue must be used. The Government Accountability Office (GAO) has reported that federal agencies lack sufficient data to determine how hospitals use 340B revenue or whether savings benefit patients directly.
The Medicare Payment Advisory Commission has also raised concerns about transparency and hospital incentives created by the program. It noted that Medicare pays higher rates to hospitals participating in 340B without evidence of improved patient access or outcomes.
DiGiorgio is an Assistant Professor of Neurological Surgery at UCSF and an attending neurosurgeon at Zuckerberg San Francisco General Hospital. He regularly comments on federal health policy, hospital finance, and market-based health care reform.
