Rural Voices USA said on April 13 that California’s rural hospital crisis demonstrates the need for stronger transparency and congressional oversight of the federal 340B drug discount program.
The organization said addressing the rural healthcare crisis requires more transparency into how these discounts are used.
The federal 340B Drug Pricing Program is designed to help eligible safety-net providers stretch scarce federal resources, reach more eligible patients and provide more comprehensive services. Participating drug manufacturers provide outpatient drugs to covered entities at significantly reduced prices, and eligible entities include HRSA-supported health centers, Ryan White clinics, disproportionate share hospitals, children’s hospitals and other safety-net providers according to the Health Resources & Services Administration.
California’s rural hospitals serve more than 2 million people and act as both healthcare lifelines and economic anchors for their communities. Many operate near the financial brink while facing possible closure or service reductions, and a closure can leave families without labor and delivery services, force elderly patients to travel farther for care and reduce access to specialized treatment according to the California Hospital Association.
Rural hospital closures remain a national access problem for communities that already have fewer care options. The Sheps Center’s rural hospital tracker lists 195 rural hospital closures and conversions since January 2005, including 110 complete closures and 85 converted closures. Since 2010, the tracker lists 152 closures and conversions, with 87 complete closures and 65 converted closures according to the Sheps Center for Health Services Research.
GAO identified rapid growth in the 340B program and related pharmacy arrangements as a reason stronger oversight matters. Covered entities participating in 340B increased from nearly 9,700 in 2010 to nearly 13,000 in 2019, while contract pharmacies increased from about 1,300 at the beginning of 2010 to around 23,000 in 2019 after guidance allowed unlimited contract pharmacy relationships according to the U.S. Government Accountability Office.
Rural Voices USA is a 501(c)(4) nonprofit bipartisan organization that organizes rural Americans to advocate, communicate and hold policymakers accountable on issues affecting their lives. The group describes itself as a nationwide network of rural leaders, farmers and community members working to ensure rural voices are heard on policy issues affecting rural families and communities.
