A recent study published in the New England Journal of Medicine asserts that the 340B program drives hospital/physician consolidation while not expanding care to low-income populations or improving their mortality rates. In our first blog post earlier this week, we detailed a number of methodological flaws that invalidate the findings. In this second post, we examine one major flaw in particular: how the authors ignored a significant data source in drawing their conclusions.

As we noted in our first post, one major error in the study is that the authors overly relied on fee-for-service Medicare data to make broad conclusions related to the impact of the program on low-income individuals. This decision was fatal to the conclusions of the study: the 340B program is not intended to exclusively benefit Medicare beneficiaries, and, in fact, the vast majority of low-income individuals are not eligible for the Medicare program.

Low-income individuals are diverse. The largest group of low-income individuals in the U.S. are actually children, followed by the working poor.1 Fee-for-service Medicare beneficiaries could account for approximately 23 percent of low-income individuals at most. By relying on fee-for-service Medicare data alone, the authors made no attempt to evaluate how the program impacts the vast majority of vulnerable individuals, including those covered by Medicaid and those who are uninsured or underinsured.

Admittedly, collecting data for the Medicaid population and uninsured is hard. However, there is another source of information the authors could have used: 340B hospitals. If they wanted to know how 340B hospitals were meeting the intent of the program, why didn’t they just ask? Supplementing quantitative analysis with qualitative analysis is a common evaluation approach. It’s unclear why the study authors didn’t use it here, especially given the significant limitations of their quantitative data source.

Had they asked, they would have heard a wide range of responses as to how hospitals tailor programs to meet local community needs.

For example, had they talked to MedStar Health in Maryland, they would have learned how MedStar uses the 340B program to benefit its communities. For instance, the program helps to allow MedStar to provide in-home services to more than 3,000 of the District of Columbia’s most vulnerable elderly patients, an after-hours clinic that provides free healthcare at a DC homeless shelter, a no-charge clinic in Baltimore for uninsured patients, and subsidies for discharge prescriptions and transportation for underserved communities in Southern Maryland. In addition, the program has made it possible for a hospital-employed nurse to be placed at four area elementary and middle schools in Baltimore City.

Had they talked to Providence Cancer Center in Oregon, they would have heard about how, prior to participation in the 340B program, the Center experienced drug cost increases between 10 and 15 percent each year. These increases threatened the Center’s ability to maintain even basic medication infusion services in its oncology infusion program. As a result of savings from 340B, in the last two years, the Center has been able to continue providing life-saving infusion treatment for the uninsured and marginally insured patients referred from private practice medical staff members and also expand significantly its social work and spiritual care support.

And had they talked to Johns Hopkins Hospital in Maryland, they would have heard how Johns Hopkins uses 340B program savings to provide low-income patients with free and discounted outpatient drugs and other services, including telephone consultations, home visits and transportation services. For example, Johns Hopkins dispatches pharmacists to patients’ homes through its Home-Based Medication Management project. Since 2009, Johns Hopkins also has offered a charity program designed to improve access to effective, compassionate, evidence-based primary and specialty care to uninsured and underinsured patients from the neighborhoods surrounding the hospital called The Access Partnership. This program serves a population that has higher than average levels of poverty and unemployment, and many residents live in areas without access to comprehensive grocery stores with healthy food options, often referred to as “food deserts.”

These are only three examples, but 340B hospitals throughout the country are undertaking similar efforts to improve the health of individuals and their community. The 340B program provides critical financial resources to make this happen.

With respect to this study, the conclusion is clear:  the underlying methodology is so deeply flawed that the conclusions are invalidated.


1   The Brookings Institution, “Who is Poor in the United States?” Jun. 2016.