This bill will drive more health care monopolies in Washington | Opinion

As a retired independent urologist who practiced for decades in Washington state, I know how vital community-based care is to patients. Independent physician practices offer personalized, relationship-based care close to home — and thousands of Washingtonians rely on local independent physicians to guide them through their healthcare journeys.

Unfortunately, across our state, independent practices are disappearing. This is in part due to a federal drug discount program, called 340B, that incentivizes large hospital systems to acquire smaller practices, leaving patients with fewer local care options. Legislation now on Gov. Bob Ferguson’s desk would lock in the flaws of this program and exacerbate the decline in independent practices in Washington. Ferguson should veto SB 5981.

I understand this problem firsthand. After decades in medical practice, I was forced to close my office, even though it was well-managed, successful and high-quality. That left many of my patients wondering where they should turn for reliable, trusted care.

The 340B Drug Pricing Program was designed to enable hospitals to stretch scarce federal resources by allowing them to purchase discounted medications, which are administered at a physician’s office, from drug manufacturers and serve vulnerable patients. However, there are no requirements that hospitals pass discounts on to any patients, let alone the underserved — and many don’t. A New England Journal of Medicine study found that 340B-eligible hospitals charge reimbursement prices 289% more than physician practices.

Independent practices — like the urology practice I ran in Burien for 35 years — are not allowed to participate in the program and operate on significantly slimmer margins than large hospitals. This is a severe competitive disadvantage, and it forced me to make a difficult decision: be acquired and lose the benefits of practicing independently, or close the practice doors because of declining revenues, increased costs and increases in hospital-driven competition.

Data shows that hospitals make decisions about acquisitions based on factors directly influenced by 340B. When a hospital acquires a practice, they not only gain patients, but also the ability to endow upon those patients “340B-eligibility” — expanding the number of prescriptions a hospital can fill at 340B prices. Research shows they tend to place 340B-eligible clinics in healthier, wealthier and better insured communities, not underserved areas.

Large hospital systems now dominate care across Washington. Researchers at Yale recently found that more than 60% of Washington hospitals are in a highly concentrated market or part of a monopoly, conditions that lead to increased health care costs. Now, most physicians in Washington are employed by hospitals, not their own practices. This leads many patients to wonder if there are any independent physicians in their area; the answer, increasingly, is no.

Hospitals are a critical part of our healthcare system, but they do have certain disadvantages for patients, including longer wait times, limited availability of specialists, and less personalized care. I recognize the important work that hospitals and their physicians do daily, but I am deeply concerned about the misaligned structural systems embedded in a struggling American healthcare system.

A lack of transparency in 340B means that it is challenging for patients, physicians, and lawmakers to understand how 340B is warping incentives across the healthcare system. It is nearly impossible to track whether 340B savings reach patients, and data indicates that 340B leads to higher healthcare system spending. Each year, Washington loses an estimated $82 million in Apple Health (the state’s Medicaid program) drug rebates when prescriptions are processed through 340B instead of the standard Medicaid rebate system, reducing funds available for other critical healthcare needs.

SB 5981 is being touted by hospital lobbyists as a solution to the rising cost of healthcare in Washington. Instead, it reinforces the existing warped incentives of the 340B Program and will further advantage large hospital systems over independent practices. This proposal risks accelerating the consolidation already reshaping healthcare in our state and reducing patient access to community-based care. And it will raise overall healthcare spending.

A healthcare system that works for Washingtonians needs both hospitals and independent practices. Unfortunately, our independent practices are at risk of being completely wiped out. We need to reverse this alarming trend so both types of medical practices can survive. I urge Governor Ferguson to veto SB 5981 and commit to preserving independent practices to ensure they don’t go extinct.

Dr. Jeffrey Frankel is a retired independent urologist living in Western Washington. He ran a successful urology practice in Burien for 35 years before closing his practice.

This story was originally published March 17, 2026 at 3:00 AM with the headline "This bill will drive more health care monopolies in Washington | Opinion."