Our 340B Program: San Francisco

Our San Francisco hospitals

By the numbers (FY 2022): Realized 340B Program Savings: $349.7 million Charity Care & Medicaid Share of Uncompensated Care Costs: $282 million Medicare Share of Uncompensated Care Costs: $742 million Medicare Disproportionate Share Adjustment Percentage: 25.6%, representative of our Medicaid, Medicare and self-pay mix

UCSF Medical Center and UCSF Benioff Children's Hospital (BCH) San Francisco are providers of highly specialized care serving Northern California, including the greater San Francisco Bay Area, the Central Valley and beyond. UCSF Medical Center and BCH San Francisco care for patients who suffer from the most serious medical conditions, often requiring treatment with costly medications. UCSF is among the largest Medicaid providers in Northern California and is San Francisco's largest provider of hospital care for Medicaid patients. More than 26% of our total patient services are delivered to Medicaid patients.

A disproportionate share of Medicaid beneficiaries residing in our service area seek treatment at UCSF Medical Center and BCH San Francisco, which are among the few medical centers that provide tertiary and quaternary care (that is, advanced and often innovative care from specialists) to California Medicaid enrollees suffering from highly serious medical conditions. UCSF's support for Medicaid patients has been steadily increasing due to California's Medicaid expansion under the Affordable Care Act (ACA). In fiscal year 2018, UCSF Medical Center and the children's hospital provided $263 million in uncompensated care to Medicaid patients.

Neither UCSF Medical Center nor BCH San Francisco receives operating funds from either the state of California or the University of California system. As self-supporting institutions, UCSF Medical Center and the children's hospital rely heavily on other funding sources, including savings generated from participation in the 340B Drug Pricing Program, to offset the losses incurred in caring for Medicaid patients and to fund care programs for vulnerable and underserved populations.

In addition, the savings generated from participation in the 340B Drug Pricing Program help UCSF absorb pharmaceutical inflation rates that exceed our reimbursement rate increases.

Benefits of the 340B program

Patients who come to UCSF Medical Center and UCSF Benioff San Francisco for care often have overlapping vulnerabilities – financial, psychosocial and geographic. UCSF stretches its resources by leveraging access to discounted outpatient drugs and savings generated from our 340B program to support these areas of need, particularly uncompensated care incurred in serving our pediatric and cancer patients.

For fiscal year 2018, UCSF Medical Center and BCH San Francisco realized $125 million from 340B savings. These savings allowed UCSF to support its critical mission without regard to patients' severity of illness, level of income, or area of residence. In general, savings from the 340B program provide significant support for our hospitals to:

• Ensure access for Medicaid and uninsured patients to specialty clinics that provide lifesaving treatments for those in need of:
  • Kidney, liver, heart, lung and pancreas transplants
  • Complex cancer care
  • Immunological care, including bone marrow transplants
  • Neurological care and cardiovascular care
  • Neurosurgery and cardiothoracic surgery
• Provide specialized hospital and outpatient care for thousands of children with unique and life-challenging medical conditions, such as cancer, organ failure, genetic diseases, heart defects and epilepsy, roughly half of whom are covered by Medicaid.
• Ensure access for Medicaid and uninsured patients at clinics that provide treatments for illnesses that disproportionately impact vulnerable patients, such as HIV, hepatitis C and asthma.
• Subsidize costly chemotherapy and immunotherapy for Medicaid and uninsured patients at our on-site infusion centers and clinics.
• Provide financial assistance to patients unable to afford their prescriptions, including free discharge prescriptions.
• Enable access to specialty care that is not otherwise available to low-income individuals or the homeless in our community.
• Provide free nicotine replacement therapy to parents who smoke and have a child in the hospital.
• Vaccinate parents of hospitalized children, at no cost, during flu season.
• Support pharmacists providing HIV management to a largely Medicaid population.
• Sponsor outreach events to Bay Area seniors to review the Part D plans that will be most cost-effective for each senior and to maximize their existing drug benefits.

Here are a few examples of how 340B savings have allowed UCSF to provide life-changing services:

• A 10-year-old girl from a remote part of Northern California was diagnosed with severe ulcerative colitis. Despite their best efforts, her family was unable to find a provider in their community that would accept their insurance, because it provided inadequate reimbursement for the infusions she required. The 340B savings allowed BCH San Francisco to absorb the financial losses associated with the bimonthly infusions required to control her disease. Thanks to getting the right care, she is now able to excel academically and participate in soccer after school.
• A 21-year-old student at a local college was diagnosed with acute leukemia. The medical team determined his best outpatient course of treatment was an expensive oral drug. Despite UCSF Medical Center assisting him in signing up for Medicaid, his plan did not initially cover the drug. However, access to 340B pricing and savings generated from participating in the program enabled us to cover the cost of his first month of therapy. This allowed him to begin healing while appealing, and ultimately receiving, coverage for this therapy. Without 340B savings, this talented young man would likely have first received an inferior therapy before being allowed to use the more effective drug.
• A young boy with leukemia had a 20% remission rate following conventional therapy and bone marrow transplantation. A new, expensive therapy, costing approximately $400K per course of treatment, was available. However, the therapy wasn't covered by the child's insurance and the child's parents were unable to pay for it. UCSF absorbed the expenses associated with this therapy. The outcome expected for this child is an 80% remission rate of his cancer. BCH San Francisco couldn't have afforded to proceed with this new treatment without the savings realized from the 340B program.
• UCSF Medical Center pioneered fetal surgery that allows corrections of the spinal cord defects that cause spina bifida. After fetal surgery, these babies are significantly more likely to walk and function without the medical and public health costs historically associated with these birth defects. This treatment is not available in most communities; pregnant patients come from all parts of the West Coast for treatment at the children's hospital. Savings from 340B enable UCSF Benioff Children's Hospital San Francisco to provide financial assistance to these patients.
• Savings from 340B also allow UCSF Medical Center to provide vital medical services in closer proximity to vulnerable patient populations. UCSF Medical Center has a large solid organ transplant program that includes kidney and liver transplants. Our patients from the Central Valley must make the four-hour drive to UCSF Medical Center for their transplants. To improve outcomes, UCSF Medical Center now provides pre- and postsurgical outreach to kidney and liver transplant patients in Fresno. Sending our care providers to Fresno enables close follow-up for patients who reside in a medically underserved area. Savings from the 340B program again make it possible to stretch our dollars, help absorb the costs of this service and improve outcomes for patients.

Impact if the program were scaled back

At UCSF Medical Center, we are committed to our mission to care, heal, teach and discover. Our mission is central to everything we do. In the face of declining reimbursements over the past years, UCSF Medical Center has resisted reducing mission-critical services and has instead utilized funding from the 340B program to expand these services. Scaling back the 340B program would threaten UCSF Medical Center's capacity to offer all the patient services described above.