The Partnership for Innovation and Empowerment said nonprofit hospitals receive over a hundred billion dollars in tax breaks and 340B revenue annually while spending far less on charity care than required to justify their tax-exempt status.
According to the Partnership for Innovation and Empowerment, "Over a hundred billion dollars in tax breaks and revenue from the 340B program go to non-profit hospitals every year. Yet they spend far less on charity care and community benefits than required to justify their tax-related subsidies, all while raking in profits and charging patients more. 340B providers and their for-profit partners make 18 times more from the program than a decade ago, with no line of sight into how they are using the profits. Health care costs continue to rise, and patients suffer. It's time to change this and bring transparency and accountability to how these hospitals use their tax-exempt status."
The House Ways and Means Committee is considering legislation that would require clearer, more detailed reporting on charity care, community benefit spending, and revenue from the 340B program, introducing long-overdue transparency into 340B utilization and profit, according to PIE Org on X.
One fifth of 340B hospitals had operating margins of nearly 21 percent in 2021, compared to an average of about 6 percent among non-340B hospitals. The top performing 340B hospitals collected nearly $10 in profit for every $1 they invested in charity care, with one fifth of 340B hospitals accounting for 85 percent of all 340B hospitals' profits but just 24 percent of all 340B hospitals' charity care, according to PhRMA.
The program does not require hospitals to report how much money they make through 340B or how the funds are spent. Research on nonprofit hospitals shows most do not direct the majority of their 340B revenue toward helping low-income patients, according to the Paragon Health Institute.
The Partnership for Innovation and Empowerment is a nonprofit organization based in Washington, D.C., focused on empowering communities through educational initiatives including health equity work, according to PIE.
