As the House Energy and Commerce Health Subcommittee meets on March 18, 2026, at 10:15 a.m. ET for the third hearing in its health care affordability series, lawmakers should look past the usual talking points from large hospital systems and focus on a simpler question. Are current incentives making care more affordable for patients, or are they rewarding opaque cross-subsidies? Too often, the answer is the latter.
One of the clearest examples is the 340B drug pricing program. It was created to help providers serving vulnerable patients stretch scarce resources. In practice, however, the program has increasingly been linked to a shift of treatment into more expensive hospital settings. An AHRQ-funded study found that 340B was associated with hospital acquisition of physician practices in hematology-oncology and with greater hospital-based administration of parenteral drugs, while the financial gains to hospitals showed no clear evidence of expanded care or lower mortality for low-income patients.
For patients and employers, this is not an academic debate. It shows up on bills, premiums, and cost-sharing. A Health Affairs study found that commercial insurers paid twice as much in hospital outpatient departments as they paid in physician offices for biologics, chemotherapies, and other infused cancer drugs. That means the same medicine, delivered to the same patient, can cost dramatically more simply because of where it is administered. When policy nudges care away from community clinics and into hospital-owned facilities, families and employers pay the price.
Defenders of 340B argue that the program still supports access, and the evidence is not one-sided. A recent scoping review in JAMA Health Forum found that 340B has benefited hospitals, clinics, pharmacies, and some patients, with some studies showing expanded services and subsidized care. But that same review also found mixed evidence that 340B revenue is being used specifically for low-income populations and concluded that more transparency and stronger oversight are needed if the program is to meet its stated purpose. That should be a wake-up call for Congress. A program this large should not rely on good intentions and guesswork.
The geographic pattern of 340B expansion should concern anyone who cares about equity. A JAMA Health Forum study found that contract pharmacy growth was concentrated in affluent and predominantly White neighborhoods, while the share of 340B pharmacies in disadvantaged, Black, and Hispanic or Latino neighborhoods declined. A 2025 analysis of child sites found a similar trend: they were often located in wealthier, healthier, better-insured, and less diverse neighborhoods than their parent hospital communities. That is hard to square with the claim that the program is tightly focused on the underserved.
What makes the 340B debate even more urgent is the sheer scale of its expansion and the business model that has grown around it. What began as a narrowly tailored safety-net program has become an $81 billion enterprise in discounted drug purchases, driven not by clearer patient benefits but by aggressive contract pharmacy expansion, opaque dispensing arrangements, and a growing ecosystem of consultants and third-party administrators whose financial interests lie in maximizing program capture. At the same time, the program’s integrity safeguards remain far too weak. Covered entities can assert eligibility after the fact, while manufacturers have no practical way to verify whether a claim is valid, whether a duplicate discount has already been applied through Medicaid or Medicare price controls, or whether discounted drugs are being diverted to people who do not qualify as patients. Administrative fixes, such as modifiers, clearinghouses, and retrospective audits, do little to address this core problem because they operate only after the discount has already been claimed. For a program of this size, that is not oversight. It is an open invitation to abuse, distortion, and higher costs that ultimately fall on patients and taxpayers.
This problem is bigger than 340B. It speaks to a provider landscape in which nonprofit status and public subsidy are too often disconnected from real consumer benefit. KFF estimated that nonprofit hospitals received about $28 billion in tax-exempt value in 2020, exceeding their estimated total charity care costs of about $16 billion. At the same time, a JAMA Network Open study found that nonprofit and government hospitals charged higher commercial prices for brain MRI than for-profit hospitals. If taxpayers subsidize institutions through favorable tax treatment, patients should see that reflected in lower prices, more access, or stronger community benefit. Too often, they do not.
Congress should use this hearing to ask direct questions that have too often gone unanswered. If 340B is generating large margins, where is the money going? If nonprofit hospitals receive enormous tax advantages, what measurable return are communities getting?
A serious affordability agenda would start with three reforms. First, require transparent reporting on how 340B savings are used and whether patients actually benefit. Second, better target 340B and similar subsidies toward providers that truly serve vulnerable communities. Third, expand site-neutral payment reforms so patients are not charged more simply because a hospital owns the building.
Health care affordability will not improve until Washington stops confusing institutional revenue with patient welfare. Americans do not need more accounting tricks or vague promises about community benefit. They need lower prices, real competition, and a provider landscape that serves patients before systems.