Op-Ed: One way Washington can lower health care costs

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In an op-ed, Dr. Amish J. Dave, a rheumatologist based in Seattle and Bainbridge Island, Washington, argues that the 340B Drug Pricing Program, a federal program that allows qualifying hospitals and clinics to buy prescription drugs at steep discounts, is being abused by hospital systems to turn massive profits instead of using the savings to help vulnerable patients as the program intends. Dr. Dave says this is driving up health care costs for patients, employers, and taxpayers in Washington state.

Why it matters

The 340B program was created by Congress in 1992 to help make prescription drugs more affordable for vulnerable patients, but Dr. Dave argues that too many hospital systems are exploiting the program to boost their profits rather than pass the savings on to patients. This is contributing to the already high and rising health care costs in Washington state that are straining employers, families, and taxpayers.

The details

Dr. Dave says that in 2022, Washington 340B hospitals devoted just 1.52% of their operating expenses to charity care, while continuing to pursue patients with four- and five-figure medical bills. He also notes that 25% of Washington's 340B contract pharmacies aren't even in the state, and 48% serve higher-income areas, indicating the program is being used to expand hospital revenue rather than improve access to care. Additionally, as hospitals bring in billions in 340B revenue, they are using those funds to buy up small, private practices, reducing competition and limiting patient choice.

• In 2019 alone, health care spending in Washington jumped 6.2% to $47.9 billion.
• In 2022, Washington 340B hospitals devoted just 1.52% of their operating expenses to charity care.

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