Ben Ippolito, an economist at the American Enterprise Institute (AEI), said that new research indicates incentives under the 340B program are leading to higher intensity of prescribing and increased spending. The statement was made on X.
"Interesting new paper on 340B incentives triggering higher intensity of prescribing and spending," said Ippolito. "Among those with breast cancer who saw a 340B provider, Medicare spent $4,096 more on outpatient care and patients spent $1,099 more out-of-pocket on outpatient coinsurance."
Established in 1992 and administered by the Health Resources and Services Administration (HRSA), the 340B program aims to provide financial relief to healthcare providers serving vulnerable populations. It allows these providers to stretch scarce resources and reach more eligible patients. Participating hospitals can use savings from the program to fund essential services, including free or low-cost medication assistance and community outreach initiatives.
According to a study by ScienceDirect, among breast cancer patients who saw a 340B provider, Medicare spent $4,096 more on outpatient care, while patients themselves incurred $1,099 more in out-of-pocket outpatient coinsurance. This highlights a significant financial impact on both the healthcare system and individuals receiving treatment through 340B-affiliated providers. The study suggests that 340B incentives may be linked to higher-intensity prescribing and spending practices.
The National Alliance of Healthcare Purchaser Coalitions reports that the 340B drug pricing program is associated with approximately $36 billion in additional hospital spending annually for employers. This raises concerns about the financial impact of the program on healthcare costs. The study highlights how the program's incentives may contribute to higher hospital expenditures, particularly in settings where 340B discounts are applied.
Ippolito specializes in healthcare economics and public policy at AEI. His research often focuses on healthcare spending, insurance markets, and the economic impact of healthcare policies. He earned his Ph.D. from the University of Wisconsin-Madison and his undergraduate degree from Emory University.
