Feb. 8, 2018— Academic experts continue to question claims that the 340B drug discount program is the cause of consolidations of private physician practices and community-based hospitals. They argue the trend toward consolidation is much more complex and due to a series of factors, including changes in reimbursement policies.
In the Feb. 8 issue of Forbes magazine, Duke University’s Peter Ubel, M.D., discusses recent research that found that the primary factors behind consolidation were unrelated to 340B. In his provocatively titled column “Who’s To Blame For The High Cost Of Cancer Care (The Federal Government Or Justin Bieber?)” Dr. Ubel, who is a physician and a behavioral scientist, observes that “merger mania took hold after 2010, regardless of whether a given hospital had anything to gain from becoming newly eligible for the 340B discount.”
Last year, researchers at the University of Pennsylvania published in Health Affairs “a clever way to answer” whether 340B’s expansion in 2010 “caused hospitals to snatch up oncology practices, so they could receive discounted drugs that they could sell for non-discounted prices to patients with private insurance, thereby promoting their bottom line,” Dr. Ubel says. The researchers looked at oncology-practice consolidation in counties with and without hospitals newly eligible for the 340B program in 2010. Several hundred small rural hospitals and 11 free-standing cancer hospitals gained permission to enroll in 340B that year.
“Suppose all hospitals in an area already qualified for 340B discounts prior to 2010; in that area, the rule change shouldn’t have any impact on mergers,” Dr. Ubel says. What did the Penn researchers find? They “discovered that merger mania took hold after 2010, regardless of whether a given hospital had anything to gain from becoming newly eligible for the 340B discount,” he notes.
In their April 2017 article in Health Affairs, the research said they found “little evidence” that 340B’s expansion contributed to hospitals acquiring physician practices. “Rather, increased consolidation in the market for cancer care may be part of a broader trend toward integrated health care systems,” they concluded.
In recent weeks, a House Energy & Commerce Committee report and an article in the New England Journal of Medicine each pointed a finger at the 340B program as the driving reason for rising consolidations. However, an analysis of the NEJM study by the respected Advisory Board found “physician-hospital consolidation is a much larger trend than just the 340B program or specialties administering 340B drugs.”
What should administrators and policymakers take away from this? “Cancer care is increasingly hospital or health system based,” says Dr. Ubel. “But merger mania in the oncology industry is probably not driven primarily as a way for hospitals to get access to discounted drugs. Broader forces are at play.”