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The 340B Drug Pricing Program is helping one health system meet the needs of patients who continue to require assistance with the costs of care despite the expansion of healthcare coverage under the Affordable Care Act.
Nationally, uncompensated care-the overall measure of hospital care for which no payment is received-reached an all-time high of $46.4 billion in 2013, according to the American Hospital Association (AHA).a The AHA notes that since 2000, U.S. hospitals of all types have provided more than $459 billion in uncompensated care, including bad debt and charity care.
Despite data that portray these costs on a national scale, the reality is that the costs are concentrated in certain rural and urban communities. The costs are directly related to the continuing access to care for low-income communities that cannot support the full cost of hospitals, physicians, and clinics without financial help, such as the savings associated with the 340B Drug Pricing Program.
High costs of uncompensated care persist for safety net hospitals despite expanded healthcare coverage under the Affordable Care Act (ACA). For some organizations, changes under the ACA may have brought about shifts in the distribution of uncompensated care costs among bad debt, charity care, and undercompensated care (via both Medicare and Medicaid).
An example is Henry Ford Health System (HFHS), a large integrated delivery system in southeastern Michigan. HFHS's uncompensated care costs for 2014 were $317 million, including $35 million in uncompensated drug costs, on total revenues of $4.71 billion, with uncompensated care up slightly from $314 million in 2013. Michigan's health insurance exchange began enrollment late 2013, and Medicaid expansion became effective in April 2014. Between 2013 and 2014, HFHS's charity care costs shrank by about $14 million, while bad debt increased by about $7 million and undercompensated care (primarily from Medicaid and Medicare) increased by approximately $9 million. Henry Ford has significantly improved its margin during this time period, reporting an overall profit of $35 million in 2014, compared with less than $500,000 in 2013.
Patient financial responsibility in the form of high deductibles and copayments, as well as higher premiums in the southeastern Michigan private market and Michigan's health insurance exchange, contribute to the continued growth in uncompensated care and need to support patients who can't afford...