The exact implementation might be flawed, but if 340b is eliminated it will kill many hospitals in underserved communities.
So any plan to change 340B should really also explain how to fund these critical hospitals.
In the way that surgeries used to be the "money maker" to subsidize other expensive service lines like an ED, pharmacy has filled that gap in recent years.
It is less hospitals getting rich off overcharging insurance for drugs and more hospitals overcharging insurers for drugs since everything else they do is a drain on finances.
For example, Northwestern University (in the middle of downtown Chicago) got itself reclassified as a rural hospital in order to participate in the program.
Moreover, it's grown extremely rapidly over the past ~5 years, and the gravity of the program is starting to create bizarre second-order effects like the one outlined.
My intent with this article is just to highlight some of those effects, not to advocate for eliminating 340B.
Also, not bankrolled by pharma, just a researcher for Turquoise Health (a healthtech startup). I get to dig around in their data and publish occasionally, but editorial control / opinions are my own.
This is also a bit misleading though right? Northwestern was obliged to put 11 other hospitals and something on the order of like 150 to 200 clinic/other locations on its books largely for the purposes of access. So that rural communities across northern Illinois can also have the same access as people in Chicago.
The fact is, they are a rural healthcare system. Because the options that were in those locations previously were unable to make a long term go of it.
AFAIK, the other hospitals/clinics under the Northwestern umbrella don't really factor into whether the downtown Northwestern Memorial campus qualifies for 340B (insofar as they all have their own CCNs and qualify independently). In this case, Northwestern Memorial qualifies because it a) got reclassified as rural b) became an RRC (likely based on its staff specialty mix) c) meets the RRC DSH threshold of >= 8%.
Northwestern Memorial does treat a lot of rural patients, so maybe it does deserve 340B. That said, it seems clear that it's not they type of struggling safety-net/rural hospital 340B was originally intended to subsidize.
The money is shared at the system level. The referrals are to/from other hospitals/clinics in the system. Many of the other facilities in the system, exist because of Northwestern Memorial. This is what needs to be done to ensure access.
I agree, the whole ruse that these 501s meaningfully does charitable work for our communities is laughable and their tax exemption should be revoked, at least with regard to land taxes.
And parking is a productive use - they have services once a week, and parking means people can come to the service. That's the definition of productive use. Something does not need to be used 24/7 to be productive.
The issue is that, most of the time, "incredibly dense cities" are not the places where this is hitting the hardest. It's the smaller towns where the impact of hospital rollups hits hardest on the property tax rolls.
Problem is, of course, that if we don't get one of the hospitals in, say, Houston, to put a facility in, say, Nacogdoches, on its books; then that facility may go away entirely. In which case you'd have issues in the market with inequity of access for the very populations who may need that access most. (Elderly and poor.) But if you do allow it, well, you have issues with property tax rises.
So local leaders are put in a position of having to weigh the value of having a hospital or clinic be available locally, against any potential decrease in property tax revenues. Now you hope they get that cost-benefit analysis correct, but there's no guarantee.
But churches? Yeah. Not so much.
One thing I might agree with is land tax for non-profits that charge fees for services, as opposed to those who work off of donations. I think that would fix the issue without destroying non-profits.
>Claiming that you have ownership over land on this planet is odd, you didn't create the land and governments change overtime.
The government didn't create the land either.
The result is that return on effort are reduced. That mean labor, entrepreneurs, and capital bear the burden of supporting government budgets as opposed to landowners who benefit from the economic activity making their land valuable.
Taxes as a rule discourages whatever get taxed. The exception to this is land, because land isn't created. It already exists in nature.
Don't tax what people make, tax what people took.
>The government didn't create the land either.
The government did create the peace and order that allows you to sleep at night on your land without having to worry about another tribe taking your land from you. Without an ability to defend it, "your" land is a tenuous label.
The government, and the rest of society, also pays a hefty price routing utilities, police, ambulances, and people around your property's borders. The more property you have, the more it costs the rest of society, not just in money, but in time.
Earned income taxes are the most evil of all taxes. Why would you have to pay for the act of providing value to society?
This was self-evident in the feudal era, when landlords (Lords) had to at least raise their own militaries to assert this monopoly right. But the modern State and the landlords reached a compromise: the State will provide security to protect the lords' monopoly on nature so long as the landlords don't raise armed forces.
Totally absurd arrangement.
The current arrangement demonstrably does not work for society in place, and as AI (whether in this wave of innovation or the next) increases productivity further, it will work less and less by virtue of further increasing land rents, thereby pricing out larger and larger swaths of society from a place to live, work, or otherwise exist.
It seems like you're arguing that the people who own high value land should pay higher taxes than those who don't.
I agree!
My solution does anticipate real-world human interactions: don't give rich landowners tax breaks. This is baked into the premise of having a high tax. A tax that is effectively not-high is by definition not a high tax, ergo is not the solution I am proposing. If I proposed a solution of "have a tax that is claimed to be high but actually is not," then your response would be valid. But my solution was: have a high land value tax.
Your solution is dismissible by your same logic. "While removing any and all subsidies is well-intended, in practice real-world human interactions dictate that will not occur."
I've consulted with two large health systems that begin with A and they use 340B to subsidize all sorts of treatment.
Unfortunately American healthcare naturally seeks to socialize treatment, but instead of it being direct its in the most round about ways.
https://drive.google.com/file/d/1wzGqzWHDQA4m8DIo174yqx-eYDk...
Universities and hospitals are some of the worst offenders in situations like this, especially in urban cores, likely empowered by their clear transformation into state-sanctioned "non-profit" businesses that provide a good we are compelled to consume if we are a normie who wants a reasonable guarantee of a comfortable, healthy economic existence.
Call it what it is, a perpetual rent.
There's nothing funnier than a lot of people taking some absurd principles for granted when they make no sense at all, property taxes being one of them. So imagine you grind at least 30 years of your life working extra hours or two jobs to pay for an already inflated asset based on speculated prices rather than the actual cost, only to end up with that asset in a perpetual rent agreement where if you stopped paying it you basically don't own it anymore, a rent that also isn't controlled, so you can get screwed in the future like how a lot of people ended up selling their house because their retirement isn't enough to cover such rent.
Make it make sense, the only real winners here are the banks after they collect all that compound interest throughout all these years, and the government taking all these taxes.
Why should you be allowed to monopolize a piece of finite and scarce resource, land, for free?
Since you think it's a scam, surely you support 100% capital gains taxes on homes? Since old people getting rich off of an unproductive asset, blocking supply to "preserve neighborhood character", and inflating the price of their artificially-scarce goods would be more of a scam?
There's nothing wrong with retirees being forced to sell and downsize. You don't need a family-sized home when you live alone. Property tax is the least unfair tax of them all.
>finite
You think land is finite? You do realize you can fit the entire human race - both the ~8 billion people currently alive and the estimated ~100 to 117 billion people who have ever lived- inside the Grand Canyon? We have enough land that every single person could have an entire farm of their own, not to mention the "land isn't enough" argument makes no sense in a country with giant parking lots, and no exceptions are made for people living in apartment blocks.
The solution is simple for what you mentioned at the end: make houses a depreciated asset, not an investment. Investment by concept must always go up, scale, and grow, making it inevitably unsustainable. Japan did it and fixed the entire housing issue for the next generations to come. I am sure we are smart enough to do the same. Housing and land are made to live in, not to invest in, and keeping them empty to gauge prices up.
Is the deficit a scam too? It does not take enough taxes, you are heavily subsidized and want to be subsidized further.
The argument is simple. Land ownership with no property tax privatizes gains that others must subsidize. Land value comes from government infrastructure for water, electricity, roads, public transportation, which are expensive to maintain. That, and artificial scarcity, is why your house grows in value, which is why people treat it as an investment.
Japan fixed it by having a dying population, which causes other problems.
On land value coming from government infrastructure: that’s a partial truth dressed up as a complete argument. In Canada, most land is technically owned by the Crown, meaning you’re already leasing it under various terms depending on how title is held. So the “you’re privatizing public gains” framing already falls apart at the foundation. But let’s humor it anyway: what if I’m fully off-grid? Septic tank, solar panels, private road, self-maintained everything. Does my land value drop? No, it doesn’t, because the value is also artificially inflated by government-controlled permitting, zoning restrictions, and intentional supply suppression. The government is simultaneously the cause of inflated land value and the entity collecting taxes on that inflation. That’s not a neutral tax, that’s a racket.
On Japan: you’re conflating two separate timelines. Japan implemented its housing policies and saw prices stabilize and even decline well before its fertility crisis became the dominant economic story. The Akiya (vacant homes) problem and price normalization were underway as a direct result of policy choices, treating housing as shelter rather than an investment vehicle. The fertility decline accelerated consequences but didn’t create the policy. Meanwhile, Canada’s fertility rate is already comparable to South Korea, one of the lowest in the world, and Canadian housing prices haven’t corrected meaningfully. That alone dismantles whatever argument of “Japan only worked because of demographics”.
And here’s where it gets uncomfortable: the Canadian government has effectively admitted (look it up online, they don’t even hide it) that preserving housing values was a deliberate policy consideration in pushing back against remote work. Commercial real estate, residential landlords leveraged to the hilt, and an economy where housing represents a disproportionate share of GDP all created an incentive to force people back into urban cores. This isn’t conspiracy, it was acknowledged. When your economy is structurally dependent on a housing ponzi scheme, every policy bends toward keeping prices elevated, including taxation that forces lower-income retirees to sell, which conveniently frees up supply without crashing prices.
The honest conclusion is that property tax doesn’t exist to fund services equitably. It exists to keep the machine running for the people who benefit most from it, and that isn’t the person who spent 30 years paying off a mortgage.
Totally absurd to think that you should!
>Make it make sense
The cops/judges/prisons/schools/military/etc that maintain a mostly peaceful and ordered society that prevents someone else from walking onto your property and throwing you out costs money, and costs more money every year. The more land you have, the more it costs, since more time, materials, and energy have to be spent moving around all of that surface area you have "own". Surface area is the costliest thing people consume.
Tax on the improvements on the land, as well as earned income tax are the absurd principles.
There is some opposite momentum toward the land value tax, which is a good thing, but these are less visible and likely weaker than a tax revolt by landowners.
Eventually, if the current trend continue for property taxes, we will see a disruption in government funding for basic service, and the contraction of the economy through increased taxation of economic activity to compensate for lost revenue from property taxes. It will be a disaster.
This is the endgame of the expansion of land ownership in the post WW2 era. Exemption from property taxes worsen this crisis.
You're breaking my heart here. A land value tax is embraced by anti-tax advocates like Milton Friedman as the "least bad tax" as well as by actual Marxists. However, it does seem like in the current moment a land-owner tax revolt is the likeliest end game.
And if there is a big push towards eliminating property tax, those states will rush towards California-like real estate disasters.
I just wish that all the people who had a hard time purchasing a home or paying rent would act on their own self-interest in reducing the share of our economy that flows to the rentierism of the land owner. Rentierism is bad in all economies, yet we have enabled an overclass to exploit young people and the poor. We live in an asset economy, where there's a big class divide between those who must work to survive, and those who own real estate (especially if it's their own home) and those who own financial assets like stocks. Making capitalism work better requires more class mobility and less inequality than we currently have.
The biggest challenges of Georgism are that it is basically communism for land (George straight up admits this in one of his books) and creates some issues with efficiently allocating land resources, especially bad with the fact that it can wipe out land speculators which perform an important role in doing time-allocation of land. But it's probably worth the tradeoff if you can eliminate the other taxes.
Interesting, I have always thought the opposite. My undertsanding/reasoning: It's extremely difficult to find land for good purposes because speculators maintain land banks, preventing better uses of it. The speculator causes a ton of market friction, and the tendency for people to hold onto land because of limited supply are a fundamental hindrance to so much economic activity.
If there's a high carrying cost to land, a lot more of it will be on the market and available for people to use when they need it. Especially as land values rise, which is the most important time to reallocate land. Rising land values are exactly the time that the land speculator holds tightest, because they want to sell at the peak, not on the way up.
Maybe the government can be fixed, or even "must" be fixed for the sake of the poors that we always pretend we're thinking about (no doubt some are, but most are just using them as a prop for political persuasion), but in the meanwhile contingency plans must be made.
Government provides crucial services that increases land value, offsetting any losses in tax revenue through public utility. Perhaps the same thing can happen with historical buildings.
However, let us note that cities are for living in. It is not a museum.
Ultimately, only the public can determine the balance of concerns to be struck.
https://www.google.com/maps/@37.8567746,-122.2550107,3a,60y,...