Meaningful Hospital Reform is the Path to Healthcare Affordability

21 Apr Meaningful Hospital Reform is the Path to Healthcare Affordability

For too long, Congress has searched for ways to lower the cost of healthcare without confronting the most powerful actors driving those costs up. Drug pricing debates dominate the headlines. Insurance premiums draw understandable outrage. But one force consistently escapes meaningful scrutiny: the hospitals and large health systems whose unchecked market power, billing practices, and exploitation of public programs have made care less accessible for the communities that need it most.

The Health Equity Collaborative (HEC) is comprised of frontline organizations dedicated to closing health disparity gaps in Black, Latino, and low-income neighborhoods across the U.S. What we see is consistent: the institutions that claim to serve vulnerable populations are too often the very ones benefiting from systems designed without accountability to those populations. Until Congress is willing to examine the full picture of how hospitals behave — not just how they are funded — meaningful progress on healthcare affordability will remain out of reach.

Substantive reform requires honesty. It requires looking at where federal dollars are actually going, whether the programs built to protect underserved communities are delivering on their promise, and whether the institutions receiving public support are genuinely serving the public good. The good news is that a concrete, actionable reform opportunity is now on the table, and it deserves Congress’s full attention.

A Promising Reform: The 340B Rebate Model Pilot Program

The 340B Drug Pricing Program was created by Congress in 1992 with a clear and laudable goal: to allow safety-net providers to purchase prescription drugs at steep discounts, then use the savings to expand care for low-income and uninsured patients. The program was designed as a lifeline for the kinds of hospitals and clinics that serve communities the commercial market tends to leave behind.

Thirty years later, the 340B program has grown from roughly 90 qualifying hospitals to more than 2,600, and the evidence that this growth has benefited the patients it was meant to serve is, at best, murky. The program lacks a basic transparency mechanism: there is no reliable way to track whether the discounts hospitals receive actually flow to patients, whether the same drugs are receiving multiple discounts from overlapping federal programs, or whether savings are reinvested into underserved communities or diverted elsewhere.

The Health Resources and Services Administration (HRSA) is now exploring a meaningful structural fix: the 340B Rebate Model Pilot Program. Rather than extending discounts to hospitals upfront — where they disappear into opaque internal accounting — a rebate model would require hospitals to submit claims data demonstrating that a drug was dispensed to an eligible patient before receiving the 340B price. This simple structural shift creates a paper trail. It enables real oversight. It makes it possible, for the first time, to verify whether the program is serving the patients Congress intended.

This is precisely the kind of accountability-centered reform that HEC can support. Several organizations in our community recently submitted formal public comments to HRSA in support of this pilot, and their perspectives — rooted in the lived experience of working in communities most affected by healthcare inequity — deserve to be heard. Below, we highlight the key takeaways from five of those comments.

Choose Healthy Life
Rev. Kimberly L. Williams, President & CEO

Choose Healthy Life (CHL) is a national faith-based public health organization that works through partnerships with Black churches to deliver health services in communities with the greatest need. Rev. Williams writes from the vantage point of a community seeing firsthand how the program’s growth has not translated into better access to affordable medications for Black Americans, who face disproportionately high rates of diabetes, hypertension, and kidney disease.

• • Strongly supports the rebate-based pilot as a necessary step toward transparency and accountability in how 340B savings are used by hospitals.
  • Commends HRSA for expanding the pilot to include both I-Pay 2026 and I-Pay 2027 drugs. A broader set of therapies means more representative data and better evaluation of real-world outcomes.
  • Urges HRSA to apply the rebate model uniformly across all covered entities, with no carve-outs, to ensure clean and comparable results from the pilot.
  • Recommends targeted technical assistance and administrative support for smaller covered entities to ensure they can participate successfully.
  • Calls for patient-level and community-level data collection to verify that savings reach the underserved communities the program is meant to serve.

Read CHL’s Full Comment.

MANA, A National Latina Organization
Amy L. Hinojosa, President & CEO

MANA is committed to advancing health equity for Latinas and their families. Amy Hinojosa’s comment centers the experience of Latino communities — who are more likely to be uninsured, more likely to bear caregiving burdens in multigenerational households, and disproportionately affected by obesity, diabetes, and chronic kidney disease — in evaluating any 340B reform.

• • Supports the rebate-based pilot as a mechanism to address the program’s longstanding lack of transparency and to curb diversion and duplicate discounts that erode the program’s value.
  • Welcomes HRSA’s decision to expand the pilot to 25 drugs across both I-Pay 2026 and I-Pay 2027, generating more reliable data across therapies that heavily impact Latino patients.
  • Recommends that, if the pilot proves successful, HRSA require manufacturers to provide 340B pricing on all drugs through rebates rather than upfront discounts going forward.
  • Insists that no covered entities be exempted from the pilot, since carve-outs would make it impossible to draw meaningful conclusions about the rebate model’s actual impact.
  • Calls for publicly reported, claims-level evaluation data capturing patient coverage status, site of care, and geographic indicators like ZIP code.

Read MANA’s Full Comment.

Partnership for Innovation and Empowerment
Brady J. Buckner, President

The Partnership for Innovation and Empowerment takes a direct and unflinching view of how the 340B program has been exploited. Brady Buckner’s comment frames the reform debate in terms of equity and community disinvestment, pointing to the way large hospital systems have used 340B profits to expand into wealthier markets while withdrawing services from majority-Black and Latino neighborhoods.

• • Argues that the current upfront discount structure creates a “black box” with no visibility into how discounts are used.
  • Highlights that duplicate 340B/Medicaid discounting costs an estimated $1.5 billion in 2019 alone, with the Inflation Reduction Act creating yet another layer of potential double-dipping that Congress explicitly prohibited.
  • Supports the rebate model precisely because it creates a paper trail and enables real-time identification of duplicate discounts before they occur.
  • Insists on a single non-negotiable condition: no carve-outs for any provider, as special treatment would undermine the reform and perpetuate the inequitable outcomes the pilot is meant to address.
  • Frames this as a community equity issue, noting that hospitals that nominally serve poor communities have used 340B profits to abandon those communities in favor of more lucrative suburban markets.

Read PIE’s Full Comment.

Southern Christian Leadership Global Policy Initiative
Kevin B. Kimble, Esq., Executive Director

The SCL-GPI — rooted in the legacy of the civil rights movement — brings a decades-long perspective on what it means for communities to be abandoned by institutions that claim to serve them. Kevin Kimble’s comment is among the most pointed, connecting 340B abuse directly to a pattern of disinvestment in Black and brown neighborhoods by corporate hospital chains.

• • Documents how large hospital systems exploit the absence of any rule tying 340B discounts to patient benefit, marking up drugs many times their acquisition cost while simultaneously reducing services in low-income communities.
  • Emphasizes the fraud risk created by lack of transparency.
  • Supports the rebate model as the mechanism to close these loopholes, providing immediate identification of duplicate discounts, real-time enforcement capability, and protection of federal taxpayer dollars.
  • Calls for zero carve-outs in the pilot, with direct reporting to federal regulators as a non-negotiable condition of participation.
  • Points to Richmond Community Hospital in Virginia as a concrete example of how 340B profits have been used by corporate parents to divert resources away from majority-Black communities rather than invest in them.

Read SCL-GPI’s Full Comment.

Black, Gifted & Whole
Guy Anthony, President & CEO

Black, Gifted & Whole is a groundbreaking movement dedicated to transforming the collective narrative of Black Queer men — empowering, educating, and mobilizing a community built on strength, pride, and resilience. Its founder, Guy Anthony, is a nationally recognized HIV/AIDS activist and author. Black, Gifted & Whole’s comment approaches 340B reform through the lens of HIV care access and delivering health equity for communities disproportionately impacted by chronic illness.

• • Supports HRSA’s exploration of the rebate model as a tool to modernize the 340B program, improve data pathways, and create clearer evidence that savings are actually reaching patients.
  • Affirms that shifting from upfront discounts to a rebate structure can improve oversight and reduce opportunities for program misuse while preserving the program’s core intent of enabling low-cost medicine access for low-income and vulnerable patients.
  • Urges HRSA to avoid creating carve-outs or exemptions from the pilot, as universal participation is essential to generating meaningful and actionable results.
  • Frames accountability as a matter of health equity, not just policy: for the communities BGW serves, greater transparency in how 340B resources flow is directly linked to whether those communities receive the care they need.
  • Encourages HRSA to continue engaging patient-centered organizations in the design and evaluation of the rebate model to ensure the program advances equity, access, and long-term sustainability.

Read Black, Gifted & Whole’s Full Comment

The Path Forward: Congress Should Support the 340B Rebate Model Pilot Program

The voices represented in these comments make one thing clear: if you want to lower costs and improve access for underserved communities, you have to be willing to hold the most powerful healthcare institutions accountable.
For too long, large hospital systems have operated the 340B program on their own terms — capturing upfront discounts with no obligation to demonstrate that a single dollar reached a vulnerable patient, while simultaneously expanding into wealthier markets and reducing services in the Black, Latino, and low-income neighborhoods the program was built to serve. The 340B program has grown to include more than 2,600 hospitals, but our communities have not seen a commensurate improvement in access to affordable medications or care. That gap is not an accident. It is the predictable result of a program that has handed large hospital systems a significant financial benefit without demanding anything in return.

Accountability has to start somewhere. It has to start with requiring hospitals to show their work. That is what the 340B Rebate Model Pilot does. It does not dismantle the program. It does not punish safety-net providers. It simply introduces the kind of basic transparency that every other federal healthcare program already requires. Congress should support HRSA’s efforts to implement it.