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In 1992, Congress created the 340B Drug Pricing Program that requires drug manufacturers to provide outpatient drugs to participating hospitals with substantial discounts. Although the intent of the program is to allow covered entities to increase access to care for more vulnerable patients, hospitals are not required by law to pass on the discounts. Therefore, a concern is that hospitals might over-prescribe. This dissertation includes three chapters to study the effects of the 340B program on hospitals’ behavior changes: Chapter 1 uses state aggregate hospital service spending data from the Centers for Medicare and Medicaid Services (CMS) to study the nation-wide impact of state 340B hospital participation on state hospital service spending. Controlling for state fixed effects, time fixed effects and state specific time trends, I find, on average, a 1 percentage point increase in state 340B hospital share leads to a 12.8% increase in state hospital service spending per capita. With only hospital spending data, analysis in this chapter cannot distinguish between a scenario where hospitals increase their spending to improve quality of care, consistent with the intent of the 340B program, and a scenario where hospitals are simply increasing spending without improving quality to maximize profit. Chapter 2 complements the analysis in Chapter 1 by exploring the causal impact of the 340B program on hospitals' medication cost, patient mix and quality of care. Working with 15 million ambulatory visits to Florida hospitals from 2005 to 2015, I use a series of difference-in-difference (DID) and synthetic control methods (SCM) based on the 2010 340B eligibility expansion, I find an average increase of $111.35 in medication cost per visit due to the 2010 expansion. Quantile regressions reveal that hospitals with the highest proportion of charity care and uninsured patients keep medication cost low and on the most expensive visits, they significantly reduce medication cost for patients. The remaining newly eligible hospitals significantly raise medication cost after the expansion. The increase becomes larger the more expensive the treatment is. Finally, I find some indications that newly eligible hospitals increased Medicaid patient mix and improved quality of care, but the evidence is not strong enough to be conclusive. Chapter 3 further extends the analysis by examining the impact of market power on 340B hospitals' behavior changes. Using the CMS nation-wide state aggregate data, I find the positive relationship between the state's 340B hospital share and state aggregate hospital service spending is stronger when hospitals' market share is higher. Working with the Florida data, using a series difference-in-difference-indifference (DDD) regressions, complemented by DID and SCM estimations, I find the 340B hospitals with low market shares seem to fulfill the mission of the program by keeping medication cost low, treating more low-income patients covered by Medicaid and Medicaid managed care and provide more charity to the communities. Compared to them, hospitals with high market shares significantly raise additional medication cost, treat fewer low-income patients but substantially more commercially insured patients. There are some signs of post-expansion quality improvement among all the newly eligible hospitals, measured by the post-operative adverse reaction rates, but heterogeneity exists in hospitals' length of stay and nonroutine discharge rates. Hospitals with high market shares seem to treat more patients in their own outpatient facilities with a shorter length of stay. While the ones with low market shares experience increased length of stay, possibly due to worse health conditions among the additional Medicaid and Medicaid managed care patients they treat. As a summary, this dissertation finds the average 340B hospital raise their medication cost upon participation in the program, but heterogeneity exists that some of them seem to fulfill the mission of the program. There are signs of quality improvement in the data, but future research could adopt more quality measures to study the cost-effectiveness on the price increase, as well as the welfare influence on the cost reduction.
PURPOSE: The 340B Drug Pricing Program was established in 1992 for covered entities to stretch Federal resources and provide eligible patients with comprehensive services. Pediatric hospitals were recognized as eligible for the 340B program in 2006. There are limited reports on expanding access to pharmacy services and the value of cost savings and patient benefit. Addressing all three measures of the IHI Triple Aim, the primary objective of this study was to develop, operationalize, and implement the acceptance of commercial payers for pharmacy services in a pediatric outpatient same-day surgery (SDS) unit through bedside delivery and counseling services, and to evaluate the related cost savings from the 340B Program. METHODS: This retrospective, descriptive study is approved by the Institutional Review Board. Patients receiving care within the outpatient same-day surgery unit that were discharged with prescriptions were eligible for inclusion. Reports for all outpatient prescriptions written from same-day surgery and for all outpatient units were collected for a period of 3 months before and after implementation. Reports included prescribed medications, dose, quantity, mode of transmission, and prescription count for those captured by the pharmacy. Data was aggregated to determine prescription capture rate and pharmacy workload. For same-day surgery prescriptions captured by the pharmacy, 340B product pricing was compared to Wholesale Acquisition Cost (WAC) pricing in order to determine the primary outcome of overall cost savings from insurance expansion. Reimbursement data from adjudicated prescriptions was averaged and applied in determining margin for each drug purchased. For secondary outcomes, patient benefit was assessed by administration of a pre-/post- questionnaire to caregivers during their visit. Drug pricing for captured prescriptions was compared to contract pricing using the same data set for a non-340B covered entity within the organization to appraise the value of cost savings through field comparison. RESULTS: The monthly prescription capture rate in SDS increased from 1% to 64% (p
The Health Resources and Services Admin. (HRSA) oversees the 340B Drug Pricing Program, through which participating drug manufacturers give certain entities within the health care safety net -- known as covered entities (CE) -- access to discounted prices on outpatient drugs. CE include specified fed. grantees and hospitals. The number of CE sites has nearly doubled in the past 10 years to over 16,500. This study examines: (1) the extent to which CE generate 340B revenue, factors that affect revenue generation, and how they use the program; (2) how manufacturers' dist. of drugs at 340B prices affects CE or non-340B providers' access to drugs; and (3) HRSA's oversight of the 340B program. Charts and tables. A print on demand report.
The 340B Drug Pricing Program (340B Program) and the Medicaid Drug Rebate Program require manufacturers to provide discounts on outpatient drugs in order to have their drugs covered by Medicaid. These discounts take the form of reduced sales prices for covered entities participating in the 340B Program--eligible hospitals and federal grantees--and rebates on drugs dispensed to Medicaid beneficiaries, shared by states and the federal government. This book looks at important issues pertaining to the 340B Drug Pricing Program.
Approximately 40 percent of all U.S. hospitals participate in the 340B Drug Pricing Program, and the majority of 340B discounted drugs are sold to hospitals. Medicare reimburses hospitals for Part B drugs under a statutory formula regardless of the prices hospitals paid for the drugs. Stakeholders have questioned the increase in hospital participation in the 340B program, and the implications for Medicare and its beneficiaries, especially regarding cancer care; and whether certain of the program's hospital eligibility criteria target hospitals appropriately. GAO was asked to review hospitals' participation in the 340B and Medicare programs. This report (1) compares 340B hospitals with non-340B hospitals in terms of financial and other characteristics and (2) compares spending for Medicare Part B drugs at 340B hospitals, for all drugs and for oncology drugs, with spending at non-340B hospitals. To examine hospital participation using the most recent data available, GAO analyzed 2008 and 2012 data from HRSA and CMS to compare characteristics and Medicare Part B drug spending for 340B hospitals and non-340B hospitals.
Approximately 40% of all U.S. hospitals participate in the 340B Drug Pricing Program, and the majority of 340B discounted drugs are sold at hospitals. Medicare reimburses hospitals for Part B drugs under a statutory formula regardless of the prices hospitals paid for the drugs. Stakeholders have questioned the increase in hospital participation in the 340B program, and the implications for Medicare and its beneficiaries, especially regarding cancer care; and whether certain of the program's hospital eligibility criteria target hospitals appropriately. This report (1) compares 340B hospitals with non-340B hospitals in terms of financial and other characteristics; and (2) compares spending for Medicare Part B drugs at 340B hospitals. Tables and figures. This is a print on demand report.
Thanks to remarkable advances in modern health care attributable to science, engineering, and medicine, it is now possible to cure or manage illnesses that were long deemed untreatable. At the same time, however, the United States is facing the vexing challenge of a seemingly uncontrolled rise in the cost of health care. Total medical expenditures are rapidly approaching 20 percent of the gross domestic product and are crowding out other priorities of national importance. The use of increasingly expensive prescription drugs is a significant part of this problem, making the cost of biopharmaceuticals a serious national concern with broad political implications. Especially with the highly visible and very large price increases for prescription drugs that have occurred in recent years, finding a way to make prescription medicinesâ€"and health care at largeâ€"more affordable for everyone has become a socioeconomic imperative. Affordability is a complex function of factors, including not just the prices of the drugs themselves, but also the details of an individual's insurance coverage and the number of medical conditions that an individual or family confronts. Therefore, any solution to the affordability issue will require considering all of these factors together. The current high and increasing costs of prescription drugsâ€"coupled with the broader trends in overall health care costsâ€"is unsustainable to society as a whole. Making Medicines Affordable examines patient access to affordable and effective therapies, with emphasis on drug pricing, inflation in the cost of drugs, and insurance design. This report explores structural and policy factors influencing drug pricing, drug access programs, the emerging role of comparative effectiveness assessments in payment policies, changing finances of medical practice with regard to drug costs and reimbursement, and measures to prevent drug shortages and foster continued innovation in drug development. It makes recommendations for policy actions that could address drug price trends, improve patient access to affordable and effective treatments, and encourage innovations that address significant needs in health care.
All across the United States, individuals, families, communities, and health care systems are struggling to cope with substance use, misuse, and substance use disorders. Substance misuse and substance use disorders have devastating effects, disrupt the future plans of too many young people, and all too often, end lives prematurely and tragically. Substance misuse is a major public health challenge and a priority for our nation to address. The effects of substance use are cumulative and costly for our society, placing burdens on workplaces, the health care system, families, states, and communities. The Report discusses opportunities to bring substance use disorder treatment and mainstream health care systems into alignment so that they can address a person's overall health, rather than a substance misuse or a physical health condition alone or in isolation. It also provides suggestions and recommendations for action that everyone-individuals, families, community leaders, law enforcement, health care professionals, policymakers, and researchers-can take to prevent substance misuse and reduce its consequences.