Jefferson Healthcare and many other rural hospitals, take advantage of a Federal program called 340B.
As the article states:
This little-known federal program was created to help uninsured or vulnerable patients get access valuable medications regardless of their abilities to pay. This was done by providing certain participating hospitals or safety net clinics with discounted medicines. The 340B program has become an extremely important program for patients in need in this era of unaffordable and unsustainable drug prices.
The article lays out the problems with the 340B program and how some hospitals are abusing it to help themselves remain profitable.
While the point of sharing this article is not to infer that Jefferson Healthcare is in any way one of the ‘bad actors’ in the 340B debate, this article gives the average person a very good quick overview of the controversy. The battle over 340B is playing out in Congress, and it’s outcome will affect JHC. JHC does a great deal charity care, including use of 340B funds, and the program to offer charity care has been recently reformatted to allow people who do not have the means to afford to get needed care. (More on that can be found at the JHC website, JHC Charity Care overview )
I will be looking into the local ramifications of this issue in upcoming months, and should have a more comprehensive overview on them later.
But for now. Here’s a good quote:
For too many hospitals, the 340B program has become a road to profits, not a safety net and not a way to expand charity care for uninsured, indigent patients. For too many patients, particularly those with cancer, the 340B program has not reduced their cost of care 1 cent.
Read the whole opinion piece here:
At the July 25th Hospital Commissioners meeting, CFO Hillary Whittington laid out the current fiscal situation to the Commissioners. She stated that the hospital would need approximately $540k by end of the year to break even. They are expecting approximately $1M from Medicare billing, but will still have the shortfall.
“(We need to ) Improve our business practice by about $540k by the end of the year.” She went on to discuss where the cuts to the budget would have to come. “It sounds like a lot of money, but when you look at overtime premium pay, supplies and professional fees and services…I have no doubt we can find $540k.”
In the first half of the year, the hospital has paid for a number of expensive consultants, along with a new paging system for doctors, even with the known shortfall looming. Now, the front line that addresses patient needs will be the area cut back due to the shortfall.
Newly elected Commissioner McComas, who touted his financial acumen during his bitter election fight, had nothing to ask of Ms. Whittington. Neither did Commissioner Kolff. When asked for comment about the situation, Mr. Kolff said that “Budget shortfalls are a concern to all, ” and declined to comment further
Additionally, the hospital is planning to open a retail outpatient pharmacy inside the hospital. While there are valid reasons that the hospital gives for the move, (i.e. making sure patients fill their prescriptions before leaving the hospital) the move could threaten the well loved Don’s Pharmacy and the relationship of the hospital to Safeway. Some critics see it as a move to capture the lucrative federal money known as 340B money that currently is handed over to Safeway for fulfilling low income prescriptions. The controversy over 340B is that the money was originally intended to be given *directly* to low income consumers to shop for the best deal, but instead has been co-opted by hospitals and pharmacies as a separate revenue stream. Pharmaceutical companies have been lobbying Congress for a few years now to kill the 340B program. The hospital has a special accounting bucket for the money it makes off the 340B program.
Additionally at an earlier meeting in the year the JHC pharmacist indicated that the hospital’s expansion of it’s cancer treatment centers will allow it to capture more of the money made from chemo treatments. How this all helps lower costs for Jefferson County residents who own the hospital is not clear. No discussion was made of the effect on local pharmacies nor of using other low cost providers such as online, Costco or Walmart to fulfill the need. Apparently the hospital executives and commissioners felt that adding headcount to create the pharmacy was creating a valuable enough revenue stream to allow it to go forward, while cutting the overtime and budgets of the front line staff.