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By: Amber Ray

The Perils Facing Safety Net Organizations

Safety net practices, those “providers that organize and deliver a significant level of health care and other needed services to uninsured, Medicaid and other vulnerable patients,” help make up the fabric of the American health care system. [i] The delivery of these services is often compelled by institutional – and some legal – mandates to serve indigent people regardless of ability to pay. This is best exemplified by the Emergency Medical Treatment and Labor Act (EMTALA), a Federal law that requires emergency departments that receive Medicare funding to assess, stabilize and treat anyone who presents, regardless of insurance status or ability to pay.[ii] As a result of these mandates, organizations like public hospitals, health centers, local health departments, and rural hospitals, have become vital components of the healthcare network and critical in affording access to all people.[iii]

Historically, these non-for-profit organizations have dealt with a unique set of issues – patient demand that exceeds staff capacity, substandard health information technology, high acuity/low health literacy patients, and especially, financial challenges.[iv] Despite having favorable tax-exempt statuses, safety net organizations often perform needed services with very slim margins. In 2015, the median operating profit margin with respect to patient care services for hospitals greater than 25 beds was -6.96%, 0.09%, and 3.59% for government hospitals, not-for-profit hospitals, and investor owned hospitals respectively.[v] These numbers reveal that government and non-for-profit hospitals operate with slim or negative margins, making it difficult for these organizations to carry out their mandates to provide care regardless of a patients’ ability to pay.

Expanding the Comprehensive Services of Safety Net Organizations Through Pharmacy

Against this backdrop, the Federal 340B Drug Pricing Program (340B Program) was created to help safety net organizations “stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services”.[vi]

The 340B Program enables some hospitals and other types health care organizations to receive significantly discounted medications from drug manufacturers. Organizations can then generate savings on these medications by selling them at non-discounted rates. Organizations have traditionally utilized savings from this program to expand their services by providing medications at lower cost, building new clinics and providing community outreach. However, hospitals have also leveraged the 340B Program in innovative and non-traditional ways, for instance, investing in pharmacists to capitalize on their medication management expertise. Pharmacists have long been closely entangled with the 340B Program on many fronts, as managers and administrators of 340B Programs, and as active members of care teams enabled by the program. Pharmacists are not only used to provide in depth medication management but are often involved with formulary management and drug stewardship, ensuring that hospital resources are used in the most efficient ways possible. Consequently, pharmacists have become instrumental in contributing to the comprehensiveness of safety net services and to addressing the resource needs of both the organizations and patients.

The profession of pharmacy and the 340B Program have shared mutual benefit throughout the tenure of the program. Historically, savings from the 340B Program has supported the cognitive services that pharmacists provide, for which they would otherwise not get reimbursed. Specifically, at some institutions, 340B savings helps pay for HIV clinic education, emergency department pharmacist placement, and medication discharge programs (“meds-to-beds), home delivery. However, there are no legal specifications requiring most organizations to disclose how much they make from the program or how their savings are used. Consequently, there has been increased scrutiny over the last few years over concerns of inadequate transparency and program management, moral/ethical considerations regarding profiteering versus true patient assistance, and ultimately, the relationship between 340B savings and total community benefit provided. All of which, have led to increased calls for action in Congress.

As more critics of the program emerge, and attention from Washington turns towards the purpose, scope and size of the 340B Program, its fate becomes more and more unclear. Therefore, the pharmacy profession will need to look for more sustainable funding models that will allow pharmacists to continue delivering much needed patient care services.

Pharmacist Role Expansion Through the 340B Program

Although the relevance of the 340B program to some types of pharmacists may not be immediately obvious, the 340B Program has allowed pharmacists to demonstrate their value in the face of unrecognition; ultimately uplifting the entire profession. In the absence of a formalized payment structure to fund pharmacist direct patient care services, the 340B program has opened doors to new opportunities and expanded roles for pharmacists. Pharmacists have traditionally practiced and been paid based on a dispensary model – filling and dispensing medications. But, as the need for more skilled health care professionals has become apparent, pharmacists have stepped up to incorporate more patient-care elements into practice; the 340B Program has in some ways enabled them to do this. For example, savings from the 340B program have been used to employ pharmacists who provide much needed educational services to patients in specialty clinics – like solid organ transplant, pulmonary, infectious disease, and oncology clinics. These clinics rely on pharmacists to provide in-depth medication management and surveillance for high risk patients, many of whom have complicated medication regimens. Pharmacists in these clinic settings also assist with the essential tasks of connecting patients to prescription drug assistance programs, which help patients who cannot afford their medications; as well as navigating insurance issue so that patients can receive medications in a timely and hassle-free manner. In sum, pharmacists assess the whole person to help these patients better understand their medication regimens, ensure that side effects are managed, and that barriers to medication adherence are identified and address. In some places, support from the 340B program is used to embed pharmacists in emergency departments. In these settings, pharmacists oversee the accurate translation of medication-related information to minimize medication errors in the hectic environment of the emergency room. Pharmacists also serve in complementary roles to help offset the workload of other emergency department staff.

In spite of these opportunities and advancements, current payment structures do not incentivize the use of pharmacists in these much-needed roles. Since the 340B program is limited to specific qualified organizations and because the long-term viability of the program is unknown, members of this profession need to think about how to sustain these expanded roles for pharmacists and look to replicate them in new settings, like primary care. Our recommendations for how to propel the profession of pharmacy forward without dependence on the 340B program emphasize the involvement of pharmacists in value-based care models.


[i] Lewin ME, Altman S, eds. America’s health care safety net: intact but endangered. Washington, DC: National Academy Press; 2000. Available at:

[ii] EMTALA: Omnibus Budget Reconciliation Act (COBRA) of 1985 (42 U.S.C. §1395dd)

[iii] (2018). Module 2. Working With Safety Net Practices | Agency for Healthcare Research & Quality. [online] Available at: [Accessed 10 April 2018].

[iv] (2018). Module 2. Working With Safety Net Practices | Agency for Healthcare Research & Quality. [online] Available at: [Accessed 10 April 2018].

[v] Franklin Trust Ratings. (2018). Franklin Trust Ratings | Comparative Hospital Performance & Benchmarks. [online] Available at: [Accessed 1 April 2018].

[vi] Veterans Health Care Act of 1992 (VHCA), P.L. 102-585.


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