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The Goodman Institute Health Blog

340B Explained

Posted on September 26, 2022 by John C. Goodman

This is priceless:

Thanks to 340B, Richmond Community Hospital can buy a vial of Keytruda, a cancer drug, at the discounted price of $3,444… But the hospital charges the private insurer Blue Cross Blue Shield more than seven times that price — $25,425, according to a price list that hospitals are required to publish. That is nearly $22,000 profit on a single vial.

How is that done? A nonprofit chain (Bon Secours) links a hospital in a poor neighborhood (to qualify for the program) with clinics in wealthier neighborhoods, where patients with generous private insurance receive expensive drugs. Meanwhile, services provided in the poor neighborhood have deteriorated over time.

As the years passed, Bon Secours began stripping the hospital’s services, including the I.C.U. The unit had only five beds…. Ringed by public housing projects, Richmond Community consists of little more than a strapped emergency room and a psychiatric ward. It does not have kidney or lung specialists, or a maternity ward. Its magnetic resonance imaging machine frequently breaks… Standard tools like an otoscope, a device used to inspect the ear canal, are often hard to come by.

“Bon Secours was basically laundering money through this poor hospital to its wealthy outposts, said Dr. Lucas English, who worked in Richmond Community’s emergency department until 2018.

I love Bon Secours explanation of all this:

“Our mission is clear — to extend the compassionate ministry of Jesus by improving the health and well-being of our communities and bring good help to those in need, especially people who are poor, dying and underserved,” the spokeswoman, Maureen Richmond, said.

New York Times

6 thoughts on “340B Explained”

  1. Doug Badger says:
    September 26, 2022 at 4:37 pm

    340B has devolved from a disaster to a farce. It’s now a moneymaker both for “nonprofit ” hospital conglomerates and big chain pharmacies. It also raises Rx prices for the rest of us. I won’t speak for Jesus on this (unlike Bon Secours), but it looks like another government-assisted scam on consumers.

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  2. Charles Hooper says:
    September 26, 2022 at 6:26 pm

    Is there any government program more messed up than 340B? Do the people who designed 340B look at it and think, “Yeah. That’s what I intended.”?

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    1. James Hudson says:
      September 28, 2022 at 12:44 pm

      Why would they bother to look at it?

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For many years, our health care blog was the only free enterprise health policy blog on the internet. Then, when the NCPA closed its doors, the health blog stopped as well.

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