REALCLEARHEALTH: Drug Discounts Should Benefit Patients, Not Hospitals | Opinion
This past year has been a year of reckoning for American health care policy. Patients, doctors, and lawmakers were asking an important question: Where is our money going?
Indeed, the talk of Washington has been shifting in that direction: policymakers are finally asking how to return healthcare dollars that go into a subsidy vacuum directly to patients. President Trump has made multiple posts on that single topic. Senators Bill Cassidy and Rick Scott have released plans centered around it, and their counterparts in the House have introduced bills to put these policy ideas into action.
Across the ideological spectrum, the momentum is clear. Returning funding to patients cuts out middlemen and forces the system to respond to the people it’s supposed to serve. Billions of dollars flow through federal and state healthcare programs every year, but almost none of it reaches patients. The core problem is simple: we are funding institutions, not patients.
Nowhere is this more obvious than in a little-known federal drug discount program called 340B.
Congress created 340B in 1992 so that “safety-net” providers could “stretch scarce resources.” But today, the program has exploded far beyond that intent. More than 60% of U.S. hospitals now qualify. And investigative reporting, and a Senate committee report, have shown again and again that many large systems do not use these windfalls to help low-income communities. Instead, they use the revenue to expand into wealthy suburbs, grow their investment portfolios, or acquire physician practices.