Without ACA Federal Drug Discount Program, Hep C Treated at Loss.

There has been intense policy debate around the Affordable Care Act’s expansion of 340B, a federal drug-pricing program that gives significant medication discounts to “safety-net” hospitals and other healthcare entities where the majority of patients are covered by Medicaid. The program is particularly important for the nation’s growing hepatitis C burden, which disproportionately affects low-income patients and is expensive to treat.

Now, with the future of 340B—and the rest of the ACA—in question, a new study by School of Public Health and School of Medicine researchers finds that safety-net hospitals would treat hepatitis C at a loss of hundreds of dollars per patient if not for the program.

The study, published in PLOS One, found that Boston Medical Center (BMC), New England’s largest safety-net hospital, would lose $370 per patient providing hepatitis C treatment if not for 340B. Thanks to the program, BMC instead sees a net revenue of $930 per patient, which can then be re-invested into interdisciplinary care, case management, and patient-navigation services.

“340B support is not simply a profit generator, but rather a necessary source of support for delivery of first-rate care to vulnerable patients who routinely seek care at safety-net hospitals like BMC,” says study lead author Eric A. Jones, a PhD candidate at SPH. The patients most at risk for hepatitis C infection often have comorbid substance use and/or mental health disorders, he says, and reinvested revenue allows for “wraparound” services that can better address these patients’ combinations of health issues.

For the study, Jones and his colleagues conducted a budgetary impact analysis of BMC’s primary care-based, interdisciplinary hepatitis C treatment program, looking at the costs and revenues associated with treating the patients the program saw from 2015 to 2016.

From 2015 to 2016, the program saw 302 patients, 77 percent of whom were covered by Medicaid, and 15 percent by Medicare. The total medication cost was $660,000, accounting for the majority of the total $942,770 that the program spent for the period. Insurance reimbursement (and the $10 patient copays for medication) totaled $1.22 million, so that the net revenue for the program was $282,000.

Without the reduced medication prices provided by 340B, BMC’s hepatitis C treatment program would instead have spent $1.24 million on medications. The total for insurance reimbursement would have been slightly higher, at $1.41 million, but would still leave a net loss for the program of $112,270.

The authors noted that the costs of treating hepatitis C would likely be higher at other safety-net hospitals and smaller clinics, because this program’s operating costs are significantly reduced by being part of a large hospital, and because Massachusetts has some of the most generous Medicaid coverage for hepatitis C treatment.

The study was co-authored by, and dedicated to, the late James Burgess, who was a professor of health law, policy & management, and devoted mentor to many former SPH doctoral students. The other co-authors were Karen Lasser, professor of community health sciences at SPH and of general internal medicine at MED; Benjamin Linas, associate professor of epidemiology at SPH and of infectious disease at MED; and Ve Truong of Boston Medical Center.

—Michelle Samuels