The View From the Nation’s Capital

Guest Contributor: Ted Slafsky
June 17, 2020

Time to Tackle Racial Disparities in Health Care

The brutal deaths of George Floyd, Ahmaud Arbery and Breonna Taylor have exposed the country to the systematic racism and injustice that Black Americans face daily. As we reach an inflection point on social injustice, it is time to act on equal access to health care. This starts with the COVID-19 pandemic that is ravaging communities of color.

As Lloyd Dean, CEO of CommonSpirit Health, recently explained in an excellent op-ed, counties with a disproportionate number of Black residents have accounted for more than half of all COVID-19 diagnoses and deaths nationwide. Latinos and Native Americans have also experienced far too high a rate of positive COVID cases and deaths.

There are many reasons why this is so. For starters, people of color are much more likely to be frontline or essential workers. Minority populations also have significantly-higher rates of asthma, obesity, heart disease, diabetes and other underlying health conditions. At a recent Congressional hearing, Dr. Eva Galvez, a family physician at Virginia Garcia Memorial Health Center in Oregon, noted that these conditions are often exacerbated by socioeconomic disparities, including “lack of access to appropriate housing and health care, food insecurity and unsafe working environments,” all of which may contribute to higher rates of chronic disease and lower life expectancy.

How should we address these inequities? Let’s confront them head-on through the following steps:

  • Robust data collection. According to the U.S. House Select Committee on the Coronavirus Crisis, race and ethnicity data is missing or unspecified for 48 percent of coronavirus cases and nine percent of deaths. In addition, the Centers for Disease Control’s racial data on hospitalizations includes information only from hospitals representing ten percent of the country’s population. CDC Director Robert Redfield has acknowledged these gaps, and the administration will now require states to identify COVID-19 data based on race, ethnicity, gender and age. This information will be extremely helpful in targeting resources to the communities that need it most.
  • Ensure an equitable distribution of funds to providers. It has been two months since Congress approved more than $175 billion in funding to hospitals and other providers testing and treating COVID-19 patients. The funding mechanism for the first tranche of aid that was distributed put providers serving high numbers of low-income and minority populations at a disadvantage. Lawmakers from both parties have been calling on the administration to immediately release additional funds in a more equitable manner so these institutions can stave off financial insolvency.

I am pleased to see that the administration announced on June 9 that it will move forward in distributing $25 billion in aid to Medicaid-dependent providers. It is important that future allocations be targeted to providers serving our most vulnerable.

  • Better testing and tracing. In a recent Congressional hearing on racial disparities in the pandemic, health care practitioners pointed to an alarming inequity when it comes to coronavirus testing. Uché Blackstock, an emergency medicine doctor in Brooklyn, N.Y., explained how the demographics of her patient population in the urgent care clinic where she works rapidly shifted from a racially and socio-economically diverse one to mostly black patients as the pandemic grew. Blackstock, Founder and CEO of Advancing Health Equity, told the New York Times that without access to testing, the disease goes undetected and patients don’t get needed treatment. She noted, “I have never been as scared for my patients as I have been the last few months.”

Not only do we need a massive increase in testing capacity, but robust contact tracing will be critical, particularly this fall. CDC Director Redfield said that states need to hire 100,000 contact tracers by September, far more than the current 600 CDC employees and thousands of tracers at the state and local level. The CDC has pledged to provide guidance to states on how many tracers need to be hired for the fall. While guidance from experts is certainly welcome, future federal support, possibly including additional funding, will be needed to meet this ambitious goal.

Tackling deep-rooted health care and socioeconomic disparities will be more challenging and will take time. However, we have no excuse but to start now and focus on the most urgent health crisis we have faced in a century.

HRSA’s Decision To Remove Barrier to 340B Access is a Big Deal

Kudos to the Health Resources and Services Administration for eliminating a long-standing barrier that kept hospitals from using 340B pricing for patients at new provider-based offsite locations. The barrier, which hospitals and hospital groups had raised concerns about for two decades, prevented hospitals from accessing 340B pricing for as long as 22 months at these sites. This was due to the lag time in registering the new facility and its associated outpatient costs and charges on a filed Medicare cost report.

“It is a real victory,” says Bill von Oehsen, a partner at Powers Law who founded 340B Health close to 30 years ago.

HRSA’s position on this topic has evolved over the years. For about the first ten years of the program, the agency permitted 340B use at these new sites as long as the patients were part of the hospital and other patient definition requirements were met. Over the past two decades, HRSA has taken a different view, and as a result, hospitals have lost millions of dollars in potential 340B drug cost savings due to the waiting period.

During the start of the COVID-19 emergency, hospitals welcomed HRSA’s easing of several 340B program requirements, but were upset that they could not immediately enroll offsite facilities in 340B due to the cost report requirement. What makes HRSA’s decision even more exciting is that the agency has confirmed that the change will outlast the public health emergency and is intended to be permanent.



Other “View From the Nation’s Capital” Posts from Mr. Slafsky: 

The Nation’s View of the Drug Industry and its Implications for 340B Stakeholders – May 2020 
COVID-19’s Impact on the 340B Community: Every Cloud Has a Silver Lining – April 2020
Coronavirus Likely to Sideline 2020 Policy Changes for Prescription Pricing and 340B – March 2020
Four Key Takeaways from the 340B Coalition Annual Winter Conference – February 2020
Time to Step Up Your Efforts at the State Level – January 2020

Ted Slafsky, a leading pharmaceutical policy thought leader, is Publisher & CEO of 340B Report, the first and only independent news service covering the federal 340B drug pricing program.  He is also Founder & Principal of Wexford Solutions, a Washington, D.C. based firm that provides government relations, communications, and business development services. You can follow Mr. Slafsky on Twitter at @tslafsky or reach him at [email protected] or (703) 517-1325.


About 340B Report:

340B Report is the only independent news service that provides breaking news and analysis about the federal 340B Drug Pricing Program. We follow all 340B program developments big and small—in federal government agencies, Congress, courts, the states, associations, the private sector, academia, and more.