Guest Commentary written by

Ben Johnson

Ben Johnson is California Hospital Association’s group vice president, financial policy.

Re: California’s crisis in rural health care is also a chance for transparency

Julie Gill Shuffield’s recent piece attacking a low-cost drug program that supports health
care services for California’s most vulnerable residents not only maligns a proven and
invaluable resource for low-income Californians but also casts ugly and baseless
aspersions on the state’s hospitals.

Over 30 years ago, Congress established the 340B Drug Pricing Program to provide
struggling safety-net hospitals with relief from high prescription drug costs so they could
deliver better care for their patients.

The program has stood the test of time, enabling hospitals to use the reduced costs for
medications to not only pass along savings to vulnerable populations, but also to invest
in programs that expand access to care and provide vital services unavailable elsewhere.

Here in California, 340B directly helps those who struggle to access critical health care
services through a variety of programs including: free health screenings for low-income
and unhoused populations; co-pay assistance, financial navigation services, and free
medications for uninsured patients; emergency financial aid, including medication
vouchers, and post-hospital care for unhoused patients; and community health education.

Yet in her April 10 commentary, Gill Shuffield claims that savings do not reach patients and hospitals “pocket the difference.”

Nothing could be further from the truth. Hospitals use the savings from 340B to invest in
patient care, plain and simple. For example, one hospital in Northern California — with
the support of 340B — has brought in a permanent oncologist to deliver regional care to
at-risk cancer patients in rural communities. In the East Bay, another hospital operates
an AIDS Center that offers critical health care services, education and treatment to
thousands of patients each year.

The misleading statements don’t stop there. The piece goes on to note that 35% of
340B hospitals are located in medically underserved areas. But the 340B program is
designed to help people, not regions on a map. Participation in the 340B program is
limited to only those hospitals that disproportionately care for vulnerable populations —
people covered by Medi-Cal, people experiencing homelessness, people without any
insurance at all and rural residents. These individuals live in every community in our
state, and they are who 340B helps every single day.

A third statement repeats a tired and disproven trope that consolidation among hospitals
deprives people of access to care and services or somehow enriches hospitals (48% of
California hospitals that participate in the 340B program lose money every day caring
for patients).

In reality, integration among hospitals helps reduce health care costs while sustaining
access to care. Research has found that operating expenses fell by roughly 5-6% on a
per-bed basis following acquisition. Additional research similarly finds significant
savings. At the same time, integration is often the only path to sustain access to care for
patients in rural and underserved communities — there are many examples of health
systems that have taken on struggling hospitals about to close and then helped them
remain open. And research has shown that rural mergers are associated with quality
improvement, including a reduction in mortality risk for certain conditions.
.
Undermining the 340B program will only serve to line the pockets of multinational,
multibillion-dollar pharmaceutical conglomerates. Instead, we should start with what
patients and communities need, and recognize that this program supports safety-net health
centers, hospitals and clinics so they can keep their doors open and their patients
Healthy.

For low-income Californians, many of whom are uninsured or underinsured and
suffering from chronic medical conditions, critical health care providers simply would not
be there to care for them without the support of 340B.

Denise Smith Amos is the California Voices Deputy Editor. Before joining CalMatters she was the editor of the watchdog and accountability team at the Union-Tribune in San Diego. She has been a reporter,...