Obamacare is driving up the cost of cancer-fighting drugs while simultaneously reducing the quality of care for cancer patients, according to an editorial in the Wednesday’s Wall Street Journal.
Obamacare expands a program called 340B that has become extremely profitable for hospitals at the expense of taxpayers and private insurers, argues Scott Gottlieb, a doctor and fellow at the American Enterprise Institute.
Under 340B, eligible hospitals are allowed to buy drugs from drug companies at forced discounts of 25 percent to 50 percent. The hospitals can then bill government and private insurers for the full cost of the drugs, pocketing the spread. The arrangement gives 340B-qualified hospitals a big incentive to search for patients and prescribe lots of drugs. The costlier the drugs, the bigger the spread. So expensive cancer drugs are especially appealing.
While the program, created in 1992, was originally intended to affect only a fraction of all hospitals, by 2011 a third of all hospitals in America qualified to earn the windfall.
Obamacare expands this program by allowing it to cover other kinds of treatment centers, Gottlieb notes. The result is that hospitals are acquiring local clinics and shifting treatment of cancer patients to hospitals, where care is poorer and more expensive.
One of the rationales behind the Affordable Care Act was that the law would end the gimmicks that distort incentives and drive up costs. In the case of the 340B program and its effect on cancer treatment, the law has only further distorted an already expensive gimmick.