The analysis indicates that most nonprofit hospital growth took place in well-off communities and calls for stronger transparency and oversight of the 340B Program.
“Greater transparency and accountability are essential to ensuring 340B resources are reaching the patients and communities Congress intended to support.”— Amy Hinojosa, Founding Member of the Health Equity Collaborative
The Health Equity Collaborative (HEC) today issued a new white paper that investigates whether the 340B Drug Pricing Program is meeting its original goal of expanding care for low-income and underserved patients. According to the analysis, nonprofit hospitals enrolled in the 340B Program are generally not broadening unprofitable healthcare services or focusing their growth in the country’s most economically disadvantaged areas.
The paper, titled “Nonprofit Hospitals Do Not Use the 340B Program to Expand Unprofitable Care: 340B Nonprofit Hospitals Do Not Expand Unprofitable Care in Socioeconomically Disadvantaged Communities,” examined hospital participation and expansion from 2015 through 2024. It looked at where hospitals expanded and whether taking part in the 340B Program is linked to greater investment in high-need services like psychiatric care.
“The 340B Program was designed to reinforce the healthcare safety net by assisting providers that care for low-income and vulnerable patients,” stated Amy Hinojosa, a founding member of HEC. “Our research raises significant questions about whether the program’s current incentives consistently advance that mission. As policymakers consider the program’s future, stronger transparency and accountability are vital to ensure 340B resources reach the patients and communities that Congress intended to help.”
Key Findings:
– Most nonprofit hospital expansion occurred outside the nation’s most vulnerable communities. From 2015 to 2024, 64 percent of counties where nonprofit hospitals newly joined the 340B Program were classified as socioeconomically advantaged or moderately advantaged, according to the Centers for Disease Control and Prevention’s Social Vulnerability Index.
– Public hospitals—but not nonprofit hospitals—expanded unprofitable services after joining the 340B Program. The analysis found that public hospitals became more likely to offer outpatient psychiatric care after entering the program, while nonprofit hospitals showed no similar rise in unprofitable services.
– Child-site expansion also favored more advantaged areas. Nearly 70 percent of counties with child sites linked to hospitals that joined the 340B Program during the study period were in socioeconomically advantaged or moderately advantaged communities.
Recommendations for Strengthening the 340B Program
Based on these findings, the Health Equity Collaborative suggests reforms aimed at better aligning the program with its original purpose of supporting underserved patients, including:
– Boosting transparency by requiring reporting on 340B-generated revenue and how those funds are invested in patient care.
– Enhancing oversight by mandating that the Health Resources and Services Administration (HRSA) collect and publish the governmental contracts that nonprofit hospitals rely on to qualify for the program.
– Reassessing hospital eligibility standards to more accurately reflect providers’ commitment to serving low-income patients through measures such as charity care, uncompensated care, and Medicaid-related financial losses.
“The objective should be to guarantee that every dollar generated through the 340B Program advances health equity,” said Amy Hinojosa, HEC founding member. “This research offers evidence that can help policymakers strengthen the program while preserving its critical role in supporting America’s healthcare safety net.”
The Health Equity Collaborative encourages policymakers, healthcare leaders, researchers, and patient advocates to review the findings and participate in a constructive conversation about how the 340B Program can better fulfill its mission.
The complete white paper is accessible at www.healthequitycollaborative.org.
About the Health Equity Collaborative
The Health Equity Collaborative is a diverse coalition made up of dozens of national, public health, patient advocacy, civil rights, and multicultural organizations dedicated to supporting equity and combating disparities experienced by underserved populations.
Amy Hinojosa
Health Equity Collaborative
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