New Report Finds Georgia Nonprofit Hospitals Abuse 340B Program to Serve Affluent Communities While Reducing Access to Care in Low-Income Areas - Institute for Health Policy Accountability

The Institute for Health Policy Accountability (IHPA), an independent authority on key drivers of decision-making in the health care space, released a new report examining how nonprofit hospital systems in Georgia are exploiting the federal 340B Drug Pricing Program for financial gain rather than for the program’s intended use of supporting low-income patients. The report finds nonprofit hospital systems are abusing the 340B system to generate billions in revenue, award executives multi-million-dollar compensation packages, and invest heavily in new facilities in affluent areas, all while shuttering facilities in low-income areas.

This is IHPA’s third state-focused report diving into how nonprofit hospitals nationwide abuse the 340B program. The Georgia analysis examines waste, fraud, and abuse tied to the 340B program at several major hospital systems, including Northside Hospital, Phoebe Putney Memorial Hospital, Wellstar Health System, and St. Joseph’s/Candler Health System.

Key findings from the IHPA Georgia report include:

Hospital closures and reduced access to care

Wellstar shuttered two Atlanta hospitals that served large numbers of low-income and minority patients, triggering complaints to the IRS and HHS alleging discrimination and violations of its tax-exempt status.

Expansion into affluent communities

Northside announced a 480-bed tower expansion in Gwinnett County, an area with median household income well above the national average.
Wellstar committed hundreds of millions of dollars to new hospital construction in high-wealth areas while simultaneously closing hospitals serving low-income communities.

Inflated executive compensation

Northside Hospital paid more than ten employees over $1 million, including CEO Robert Quattrocchi, who made nearly $5 million in 2024.
Wellstar paid out $47 million in executive compensation in a single year, including almost $5 million to CEO Candice Saunders.
Phoebe Putney awarded its former CEO a $7 million retirement package, while its current CEO earns over $1.6 million annually.

Massive revenues while abusing the 340B program

Northside Hospital: $7.7 billion in revenue in 2024.
Wellstar Health System: $2.5 billion in revenue in 2024, a more than 20% annual increase.
Phoebe Putney Memorial Hospital: $857 million in revenue in 2024.

Read the full report here.

BACKGROUND ON 340B:

The 340B Drug Pricing Program was enacted by Congress in 1992 and meant to lower prescription drug costs for nonprofit hospitals that serve low-income and vulnerable communities. Instead, research shows the program has been exploited by major nonprofit health systems that generate billions in annual revenue.
This report follows a Senate HELP Committee hearing in October, where Republican Senators voiced their frustrations with the program.
According to a recent CBO analysis, hospitals across the U.S. have exploited the 340B Drug Pricing Program, resulting in significant waste, fraud, and abuse. The report found that the program “encourages behaviors that increase federal spending and raise prices for American taxpayers.”

The Institute for Health Policy Accountability is an independent authority on key drivers of decision making in the health care space. IHPA provides fact-based research and analysis across the public policy landscape, adding a central and currently missing voice to the conversation.

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