Hospitals: Not The Cronies You’re Looking For

Mytheos Holt Policy Analyst
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The poet Charles Baudelaire once quipped that “the finest trick of the devil is to persuade you that he does not exist.”

If so, it seems Big Pharma is taking lessons from Satan. There apparently is a terror among some conservatives that everyone but the drug industry is a crony capitalist trying to snatch goodies from the outstretched hands of government.

Let’s be clear: Big Pharma will do anything to avoid charging less for its products, up to and including handing over the entire healthcare industry to government control. Everyone should remember that the drug industry bought and paid for Obamacare, hired its architect as one of their lobbyists, and colluded with the White House to get the law passed. Its only price was the blockage of a bill that would (what else) have lowered drug prices.

And yet, rather than acknowledge that Big Pharma is the milk carton kid for crony capitalism, some conservatives are exercised over nonprofit and public hospitals. Last year saw no less than four different iterations of this misplaced set of priorities vomited up in print. And apparently, the discharge has yet to be stemmed, since last week, a commentator at Townhall (where I am fortunate to also write) made similarly disingenuous complaints, this time accusing healthcare providers of exploiting the poor, of all things.

The logic behind this willfully anti-factual mishmash of an argument barely passes the laugh test.

According to the conservatives, who either knowingly or accidentally serve as the drug industry’s defenders, the crony capitalists in the healthcare system are a group of hospitals who supposedly profit from an obscure statute known as the “340B drug discount program.” It requires that drug companies who sell to Medicare and Medicaid also offer their products at a reduced price to hospitals and other providers serving high numbers of low-income patients. These so-called reformers correctly point out hospitals often take medications bought at reduced prices and sell them at full price to insured patients.

It would be scandalous if it wasn’t exactly how Congress meant the program to work, says a longtime conservative supporter. Republican and former member of Congress Gil Gutknecht explains that the income generated helps safety-net hospitals treat more patients who cannot afford to pay for care. The money also funds all manner of free and low-cost medicine programs and clinical services for these uninsured and underinsured patients.

The arrangement has another excellent benefit: It costs taxpayers nothing.

Furthermore, the argument that poor patients see no benefit from 340B has been proven false. Just last week, the healthcare consulting firm Dobson and DaVanzo released a study showing that hospitals in the program are more than twice as likely to treat Black, Hispanic and Native American patients. Their patients are also four times as likely to be suffering from end stage renal disease. In short, this is a poorer and sicker patient population than non-340B hospitals see.

Big Pharma’s conservative defenders suffer from self-induced blindness to reality. It’s a pity there’s no cure for that.