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Comment by dfsnow | Hacker News Reader

Hi, I wrote this article and largely agree with you. 340B is important and without it many hospitals likely wouldn't survive. However, it's pretty evident at this point that 340B has expanded beyond its original intent.

For example, Northwestern University (in the middle of downtown Chicago) got itself reclassified as a rural hospital in order to participate in the program.

Moreover, it's grown extremely rapidly over the past ~5 years, and the gravity of the program is starting to create bizarre second-order effects like the one outlined.

My intent with this article is just to highlight some of those effects, not to advocate for eliminating 340B.

Also, not bankrolled by pharma, just a researcher for Turquoise Health (a healthtech startup). I get to dig around in their data and publish occasionally, but editorial control / opinions are my own.

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For example, Northwestern University (in the middle of downtown Chicago) got itself reclassified as a rural hospital in order to participate in the program.

This is also a bit misleading though right? Northwestern was obliged to put 11 other hospitals and something on the order of like 150 to 200 clinic/other locations on its books largely for the purposes of access. So that rural communities across northern Illinois can also have the same access as people in Chicago.

The fact is, they are a rural healthcare system. Because the options that were in those locations previously were unable to make a long term go of it.

I was being a bit glib/imprecise before, but I'm specifically talking about the Northwestern Memorial campus downtown Chicago [0]. That location qualifies for 340B as a Rural Referral Center (RRC), and got itself reclassified by CMS/HRSA as rural to do so, despite being in the middle of downtown. RRCs need to meet a lower threshold of Disproportionate Share Hospital (DSH) adjustment percentage (8% vs the usual 11.75%). Northwestern Memorial needs to be an RRC because it doesn't meet the higher DSH threshold.

AFAIK, the other hospitals/clinics under the Northwestern umbrella don't really factor into whether the downtown Northwestern Memorial campus qualifies for 340B (insofar as they all have their own CCNs and qualify independently). In this case, Northwestern Memorial qualifies because it a) got reclassified as rural b) became an RRC (likely based on its staff specialty mix) c) meets the RRC DSH threshold of >= 8%.

Northwestern Memorial does treat a lot of rural patients, so maybe it does deserve 340B. That said, it seems clear that it's not they type of struggling safety-net/rural hospital 340B was originally intended to subsidize.

[0] https://340bopais.hrsa.gov/CeDetails/78783

AFAIK, the other hospitals/clinics under the Northwestern umbrella don't really factor into whether the downtown Northwestern Memorial campus qualifies for 340B

The money is shared at the system level. The referrals are to/from other hospitals/clinics in the system. Many of the other facilities in the system, exist because of Northwestern Memorial. This is what needs to be done to ensure access.

Thanks for the response, I'll update my post to be clear I was not calling this post an astroturfing attempt.

Thanks! Good to see other health policy wonks on HN

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