Dobson | DaVanzo Study Finds That 340B Hospitals Focus Services on Vulnerable Patient Populations

Published Wednesday, June 3, 2015

Dobson DaVanzo & Associates was commissioned by 340B Health to determine the extent to which disproportionate share (DSH) hospitals enrolled in the 340B drug pricing program focus their services on vulnerable patient populations. Under the 340B program, safety-net hospitals and other health care providers that serve the poor in large numbers can buy prescription drugs for less. Congress intended for them to use the savings to stretch scarce resources and provide more services to more patients. We found that:

• As a percentage of total patient care costs, 340B DSH hospitals provide nearly twice as much care as non-340B hospitals – 41.9 percent versus 22.8 percent – to Medicaid beneficiaries and low-income Medicare patients.

• 340B hospitals provide nearly 30 percent more uncompensated care than non-340B hospitals –  $24.6 billion to $17.5 billion. Although 340B hospitals accounted for only 35 percent of all hospitals included in the analysis, 340B hospitals provided 58 percent of all uncompensated care. In addition, when taking hospital size into account and looking at uncompensated care as a percent of total patient care costs, 340B hospitals across all hospital sizes provided consistently high levels of uncompensated care.

• A higher percentage of 340B DSH hospitals provide public health and specialized services – many of which are unprofitable but essential to their communities – than non-340B hospitals.

“Three metrics have been used in the literature to describe safety-net hospitals: 1) provision of services to vulnerable populations, 2) a disproportionate amount of uncompensated care, and 3) type of care provided,” said author Joan DaVanzo. “Our analyses found that DSH hospitals participating in the 340B program surpass non-340B hospitals on all three criteria, regardless of size.”

Click here to read the report.

To learn more, please visit 340B Health at