A disproportionate share of Medicaid beneficiaries residing in our service area seek treatment at UCSF Medical Center and UCSF Benioff San Francisco, which are among the few medical centers that provide tertiary and quaternary care to California Medicaid enrollees suffering from highly acute 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 2018, UCSF Medical Center and the children's hospital provided $263 million in uncompensated care to Medicaid patients.
Neither UCSF Medical Center nor UCSF Benioff 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 fund programs to care 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.
The 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 scarce 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 serving our pediatric and cancer patients.
For FY 2018, UCSF Medical Center and UCSF Benioff 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 where they reside. In general, the 340B program savings 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 such illnesses as HIV, hepatitis C and asthma that disproportionately impact vulnerable patients.
- 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 that have a child in the hospital.
- Vaccinate parents of hospitalized children, at no cost, during the 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.
A few specific examples of how 340B savings have allowed UCSF to provide life-changing services:
- A 10-year-old girl from a remote area 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 UCSF Benioff San Francisco to absorb the financial losses associated with the bi-monthly infusions required to control her disease. The outcome is a 10-year-old who excels academically and participates 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, non-formulary 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 UCSF Medical Center to cover the cost of his first month of therapy. This allowed him to begin healing while appealing, and ultimately receiving, ongoing coverage for this therapy. Without 340B savings, this talented young man would likely have first received, and failed, 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, which costs approximately $400K per course of treatment, was available. However, the therapy was not covered by the child's insurance and the child's parents were unable to pay for this expensive therapy. UCSF again absorbed the expenses associated with this therapy. The outcome expected for this child is an 80% remission rate of his cancer. UCSF Benioff San Francisco could not have afforded to proceed with this new treatment without the savings realized from the 340B program.
- UCSF Benioff San Francisco also provides care for many low-income patients who struggle to secure adequate care for serious or rare diseases in their local communities. 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 women come from all over the West Coast for treatment at the children's hospital. 340B savings enable UCSF Benioff Children's San Francisco to provide financial assistance to these patients.
- 340B savings also allow UCSF Medical Center to provide vital medical services in closer proximity to vulnerable patient populations. UCSF Medical Center has a very large solid organ transplant program that includes kidney and liver transplants. Our patients from California's Central Valley must make the four-hour drive to UCSF Medical Center for their transplants. To improve outcomes, UCSF Medical Center now provides outreach to pre- and post- kidney and liver transplant patients in Fresno. Sending our clinicians to Fresno enables close follow-up for patients who reside in that medically underserved area. 340B savings again make it possible to stretch our dollars, help absorb the costs of this service and provide improved outcomes for patients.
Impact if the program was scaled back
At UCSF Medical Center, we are deeply 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 services described above to our patients.