We hear negative goings-on in the world so often that we gloss over what happened and keep reading down the page.  We are engrossed in our work and don’t always respect why we continue to do the daily grind.  Some work for a paycheck.  Some work for the difference they make.  I believe that most do it for a combination of both.  It is easy to get absorbed in your work and not think about how you are making a difference.

Recently, our CEO, Rob, sent the team an email with a link to an article discussing hospital closings and discussed how Turnkey has helped entities realize savings that have actually kept their doors open.  The article made me stop and reflect on the importance of the 340B program. More specifically, I reflected on how important the program is for rural communities. Each of us who works in the 340B space makes a difference.  If that statement is the only thing you take away from this piece, I have accomplished my goal.

​Hospitals closing or hospitals limiting their services occursmore often than not.  This seems due to poor (in some cases no) reimbursement from Medicare and Medicaid (M&M).  The topic of Medicare and Medicaid reimbursement is extremely complex so I will provide a very basic example of what poor reimbursement can look like.

A patient receives a medication in the emergency room that costs $1.00 for the pharmacy to procure. The medication will be marked up to $3.00 to contain all overhead costs related to it being administered.  Now, Medicare or Medicaid comes in and only pays $0.50 for the medication.  Not only does the reimbursement not pay for the hospital to buy the medication, but none of the overhead costs are paid.  I cannot walk into the grocery store and pay for a gallon of milk that cost the grocer $1.00 and is marked up to $4.00 for only a penny!  Why? The obvious answer is because the grocer could not remain in business if they are not paid what they need to cover the costs of selling the gallon of milk.

The lack of reimbursement in hospitals does not apply to medications only, it applies to all areas of a healthcare entity. There are other reasons for poor financial performance from hospitals such as bad debts, patients not paying, etc., but a continual concern is poor reimbursement from M&M. This is where 340B folks make a difference.  The program allows the hospital to make the initial purchase of the drug at a discounted price which in turn allows the poor reimbursement to now cover the cost of the drug along with a small portion of overhead costs involved in the administration.

So why does anyone care that a hospital closes when we have so many?  The instant answer is that it creates obstacles to healthcare. We have to remember that for rural communities, the hospital not only serves as a place for inpatient care but also serves as the local clinic for family health and specialty provider services. The loss of a local hospital means our most vulnerable and in a lot of cases, our oldest patients, will have to drive quite a distance to receive even basic healthcare services. On a lighter note, I would not want anyone to get stuck behind my grandpa who drives 15 mph on the highway ON A GOOD DAY when he has to drive 45 minutes (5 hours in his way of driving) to get to the doctor.

340B betters the country and allows communities to have access to healthcare they would not otherwise have. It is important to remain compliant and for hospitals to optimize their 340B programs to continue to save money. I cannot imagine having to rush my wife 45 minutes after she goes into labor to get her to an appropriate facility.  I know because of what I have done working within 340B that my local hospital continues to be able to offer OB services.  My grandpa’s local hospital is able to provide him the services he needs and both of the hospitals’doors are still open.

You have made a difference too.  I encourage you to reflect on what you have done for your community and continue to do as much as you can to help serve our most vulnerable populations and to keep our communities happy and healthy.

Keywords: pre2023

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