340B Drug Pricing Program

Scripps Mercy Hospitals participate in reduced drug pricing program

Scripps Mercy Hospitals participate in reduced drug pricing program

Scripps Mercy Hospital in San Diego and Chula Vista participate in the 340B Drug Pricing Program. Designated as a disproportionate share hospital (DSH), Scripps Mercy is eligible to purchase outpatient drugs at a reduced price, allowing it to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.


The 340B Drug Pricing Program is a vital lifeline for safety-net providers — such as those at Scripps Mercy Hospital — who serve a significant number of low-income patients. DSH hospitals provide nearly twice as much care to Medicaid and low-income Medicare patients as non-DSH hospitals. DSH hospitals account for about one-third of all hospitals, but provide nearly 60% of all uncompensated care.


Scripps Mercy Hospital contributed $128,066,630* to community benefits for fiscal year (FY) 2018, including:


  • $12,894,711 in charity care
  • $66,690,993 in MediCal and other means-tested government programs*
  • $27,245,944 in Medicare shortfall
  • $942,449 in bad debt 
  • $3,817,785 in subsidized health services 
  • $11,819,188 in professional education and health research 
  • $4,054,392 in community health services
  • $601,167 in community building activities


* Does not include hospital provider fee payments. Scripps Mercy Hospital received $86,353,991 in provider fee payments spanning multiple years in FY 2018.


Scripps Mercy Hospital saved $17,636,426 from participating in the 340B program FY 2018.

How 340B supports Scripps Mercy Hospital and our community

We use our 340B savings to keep our costs down so we can keep our doors open. Scripps Mercy is designated a DSH hospital, providing care to a large number of patients who either lack health insurance or are covered through a government subsidy program. Our payer mix is:


  • 29.0% Medicare
  • 27.9% Medi-Cal
  • 15.5% commercially insured patients
  • 15.2% of patients have another payment source, including self-pay, CMS or charity care


One way Scripps Mercy is able to provide care to some of our most needy patients is through in-lieu of funds. In-lieu of funds are used for unfunded or underfunded patients and their post-discharge needs. Funds are used for board and care, skilled nursing facilities, long-term acute care and home health. In addition, funds are also used for medications, equipment and transportation services. $536,138 was spent on in-lieu of funds in 2018.

About Scripps Mercy Hospitals

  • 655 licensed beds
  • 3,812+ employees
  • San Diego’s longest-established and only Catholic medical center
  • Provides health care services for 25.1% of the inpatient population living within the hospital’s central service area
  • 37.4% DSH hospital