Plans are being laid in Washington to repeal the Affordable Care Act as soon as Donald Trump takes the presidential oath of office. Hidden inside the law is a little-known provision unrelated to the health insurance expansion that helps rural hospitals across America stay open.
It’s called the 340B drug discount program. The ACA made 1,100 rural hospitals eligible and it requires drug companies to supply these remote providers with discounted medications. These discounts can be passed along to patients unable to afford expensive medications or the savings can help fund essential medical services for their communities such as emergency rooms and labor and delivery.
Rural hospitals across the country face daunting economic challenges. Eighty have closed since 2010 and 673 — fully one third of rural hospitals — operate at a loss and are at risk of closure. These are often the only medical facilities for hundreds of miles in any direction.
Rural hospitals provide essential, life-saving local access to health care close to home for the 62 million Americans living in rural and remote communities. Rural hospitals serve vulnerable Americans that are older, sicker and poorer than their urban counterparts. These patients are more likely to suffer from a chronic disease that requires monitoring and follow-up care, making convenient, local access to care necessary to ensuring patient compliance with the services that are necessary to reduce the overall cost of care and improve the patients’ outcomes and quality of life.
The 340B program makes it possible for these hospitals to offer necessary services needed in their communities.
Cass Country Memorial Hospital in Atlantic, Iowa, uses 340B program savings to pay for free medications for needy patients, and it helps fund the hospital’s Behavioral Health Unit — one of two critical access hospitals in the state that offers psychiatric services.
At RiverView Health in Crookston, Minn., program savings allow the hospital to recruit orthopedic surgeons, and pain management and oncology specialists. The facility has also been able to update equipment, start an anti-coagulation clinic and set up a 24/7 onsite laboratory and CT scan services even though patient volumes don’t support them. The hospital is also able to offer additional charity care to patients in need.
In Wishek, N.D., the Wishek Hospital has used its 340B savings to help buy a bone density scanner, relocated and renovated its physical therapy department for better patient access and purchased equipment for its cardiac rehab patients. It was also able to pay a private doctor to provide services at a local clinic until a physician was hired on staff.
It’s important to understand that 340B is not taxpayer funded. The program is paid for by drug companies that can well afford it, particularly as medicine prices continue to skyrocket.
As Congress considers repealing the ACA, it is essential that any changes in health care law do not deny rural hospital eligibility in the 340B drug discount program. Savings from the program are critical to ensuring rural hospitals are able to meet the health care needs of their communities in an uncertain future.
Rural closures are already hurting the most vulnerable patients and the loss of the 340B program eligibility could further erode timely access to lifesaving care.
Alan Morgan is CEO of the National Rural Health Association.
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