Financial Outcomes and Community Benefit in the 340B Program: Comparing 340B and Non-340B Hospitals

BackgroundThe 340B Drug Pricing Program was established to expand access to care for low-income and uninsured patients by allowing safety-net hospitals and clinics to purchase outpatient drugs at discounted prices. Over time, the program has expanded substantially, raising questions about whether participating hospitals are meeting the programs intended objectives. MethodsUsing 2023 hospital financial data from the RAND Corporation, we conducted cross-sectional descriptive comparisons of 340B and non-340B hospitals nationwide. Key measures included charity care as a percentage of operating expenses, Medicaid admissions as a share of hospital days, uncompensated care, and costs associated with uninsured patients approved for charity care. Subgroup analyses also examined the performance of Disproportionate Share Hospitals (DSH), Critical Access Hospitals (CAH), Rural Referral Centers (RRC), Sole Community Hospitals (SCH), and National Cancer Institute (NCI) designated hospitals. ResultsAmong 3,999 hospitals analyzed, 340B hospitals provided, on average, lower levels of charity care than non-340B hospitals (2.16% vs. 2.82% of operating expenses) and lower costs of charity care for uninsured patients (1.60% vs. 2.26%). However, 340B hospitals served a higher proportion of Medicaid patients (19.69% vs. 17.76%). Substantial variation was observed across 340B subcategories: DSH hospitals reported the highest Medicaid utilization, while CAH hospitals reported the lowest levels of charity care and Medicaid days. ConclusionsParticipation in the 340B program does not uniformly correlate with greater provision of charity care or uncompensated care. These findings suggest a misalignment between program intent and outcomes and support the need for greater transparency, standardized eligibility criteria, and minimum charity care requirements to ensure that 340B savings directly benefit underserved populations.