publication date: May. 16, 2014


Report: Rising Treatment Costs Due to 340B Discounts

The 340B drug discount program is causing a rise in the costs of treating cancer patients, according to a new report.

Published by the IMS Institute for Healthcare Informatics, the report, “Innovations in Cancer Care and Implications for Health Systems,” showed that marketplace behaviors, triggered by a lack of eligibility integrity, are a major reason for increasing costs of cancer care, said the Alliance for Integrity and Reform of 340B in a statement.

According to the analysis, growing numbers of hospitals are acquiring independent, private oncology practices in order to maximize the amount of revenues they can receive from the drug discount program that was intended to help needy patients, the alliance said.

“Accountable Care organizations and health and health care organizations that are covered by the 340B Drug Discount Program have expanded their presence in oncology, moving more patient care from physician offices to hospital outpatient facilities,” the report said. “To reflect hospitals’ higher costs and overheads, they receive higher reimbursement to administer drugs compared to physician offices.

“For typical therapies that are infused or injected by an oncologist, reimbursed costs for hospitals are at least double those for physician offices, sharply increasing costs to payers over the past two years.

“Patient out-of-pocket costs are then driven higher, depending on the patient’s insurance plan and benefit design, which can trigger reduced levels of therapeutic persistence by the patient and higher overall cost of care.”

The IMS report confirms what numerous studies have—that costs increase for patients and insurers with cancer care shifting to hospitals, said Ted Okon, executive director … Continue reading 40-20 Report: Rising Treatment Costs Due to 340B Discounts

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