Ozarks Medical Center, located in Missouri, suffered a serious financial blow this year when it learned that its state Medicaid funding would be cut by dollar1.3 million. Safety-net hospitals across the country face similar news of Medicaid reductions at a time of growing uninsured patient visits, thanks to the crushing effects of the lingering recession. Unlike most of the other 2,900 safety-net hospitals in the U.S., however, Ozarks Medical is about to receive a financial transfusion in the form of comprehensive use of the Section 340B Drug Pricing Program. The medical center qualifies for this federal program because it serves a high number of Medicaid recipients. As a result, the center can contract with local pharmacies to fill prescriptions in its south central Missouri service area, using inventory purchased by the hospital at deep discounts. Through this "pharmacy network," the hospital can provide medications at a reduced cost to its uninsured patients and can generate much needed supplemental revenue from prescriptions covered by insurance. Executives at Ozarks Medical knew of safety-net health care providers, smaller than their hospital, that were earning as much as dollar200,000 per year from a well-managed 340B program.
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