Around this time each year I am reminded of the pivotal role that government, at every level, plays in our nation’s health care delivery system. Although it may not be apparent, the summer months are a critical time period for consequential policy decisions in health care — state budgets are finalized, Congress continues its work in earnest in Washington, D.C., and federal agencies are busy issuing rules for the coming year that govern everything from the government’s payments to hospitals and physicians to patient safety and hospital quality standards. These decisions have a profound impact on safety-net health care providers like Penn Medicine and the communities we serve. That’s why one of Penn Medicine’s most important commitments and responsibilities is to work with policymakers to advocate for and ensure health care funding policies that allow us to most effectively meet our missions.
One prominent example is the 340B Drug Pricing Program. The 26-year-old program allows hospitals that serve a disproportionately high percentage of low-income patients to purchase drugs from pharmaceutical companies at a discount. Historically, Medicare and Medicaid have reimbursed providers less than what it actually costs to care for patients who are insured by these programs, and these payment shortfalls hit safety-net hospitals especially hard. At Penn Medicine, Medicaid pays for more than 150,000 inpatient stay days and Medicare covers nearly 40 percent of all discharges each year. The savings we achieve through the 340B program are an invaluable and irreplaceable resource to help offset the cost of the unreimbursed care we provide throughout our health system and surrounding neighborhoods — from our free or discount prescription drug programs to cancer screenings in the community for low-income patients.
It is also worth noting the 340B program does not cost the federal government or taxpayers any money. The discounts 340B-eligible providers receive are from drug manufacturers. That dynamic has created friction with the pharmaceutical industry — which many believe has used this issue to deflect attention away from public concerns about the high cost of prescription drugs — and resulted in exaggerated claims of widespread misuse and abuse in the 340B program. These claims have led to increased scrutiny of the program by Congress and the Department of Health and Human Services (HHS). In July, the House of Representatives held a hearing to examine the 340B program and a number of bills that would severely limit the program and harm providers like Penn Medicine. This comes on the heels of a 30 percent reduction in Medicare reimbursement for lifesaving outpatient drugs like insulin — a decision that will reduce 340B drug discount savings nationally by $1.6 billion this year and divert federal money from safety-net hospitals across America. The loss of these funds will undoubtedly make it more difficult for our nation’s hospitals to continue to provide the same level of care our communities depend on.
While these elements of the federal government’s work may not make front-page headlines, they illustrate the way in which budgetary and policy decisions have a profound impact on our work and the patients we care for. They also underscore the importance of our role educating and working with our policymakers. Throughout the year, representatives of Penn Medicine frequently meet with federal, state, and local elected and appointed government officials to share our perspective and expertise to guide them as they face decisions about budgetary support of programs like 340B.
We visit policymakers in Harrisburg, Trenton, and Washington, D.C., and host them for tours and meetings throughout our health system, offering opportunities for them to hear from and collaborate with the physicians and other leaders here who are working to devise more sustainable ways to fund health care and improve patient outcomes. We also partner with our peer institutions across the country and organizations like the American Hospital Association and the Association of American Medical Colleges to ensure that we speak with a strong, unified voice on issues that impact patients everywhere. Sometimes, on issues as important as these, we also seek help from our workforce to join in the fight to advocate on behalf of Penn Medicine and our patients.
We are uniquely positioned to provide practical expertise and evidence-based information to effect change that ensures better health for our nation as a whole. It’s crucial for us to use these tools to be an advocate for our patients and a partner to policymakers.