Drowning in Compliance

In partnership with

NOTE: Yesterday, February 24, I traveled to the Missouri state capital in Jefferson City and signed up to run for State Representative in District 97. After signing up, I had some time to kill, so I walked to the Capitol building and met with my representative, whom I’ll be running against this November, assuming he wins his primary. We know each other fairly well, and though we disagree on many things, we maintain genuine mutual respect. We discussed several concerns, and as usual, we found some agreement amid our disagreements.

After I left his office, I met with an advocate from the Missouri Primary Care Association (MPCA), who explained how the federal 340B program is administered in the state. I learned that the program helps rural communities meet the healthcare needs of their residents. I also learned about a new House Bill, HB 2081, which, according to the MPCA, threatens the implementation of 340B in Missouri. Not one to take their word for it, I did my own research today and found that I agree with the goals of HB 2081, which was proposed by Republican Legislator Ben Keathley. The problem, however, is that the bill’s implementation may inadvertently harm the very program it seeks to help.

The article below briefly outlines what I uncovered during my investigation. As is the case with many such bills proposed by both parties, the goals may be noble, but the implementation risks doing more harm than good. Nevertheless, I sense that there is a win-win solution that still meets the original goal without risking damage to rural health services.

As always, your feedback is appreciated.

The federal 340B program is a vital lifeline for many health clinics serving our rural communities. Created by Congress in 1992, 340B allows eligible safety-net providers to purchase outpatient medications at significantly reduced prices, helping clinics stretch scarce resources and expand care for patients who need help. In many parts of rural Missouri, 340B is not just helpful; it is vital. Much of our rural healthcare infrastructure may not survive without it.

More specifically, rural health clinics use 340B revenue to fund behavioral health services, subsidize prescriptions, keep a pharmacy running, recruit health experts, and maintain operations in communities where patient volumes are low and costs are high. Everyday citizens benefit from expanded access to care and reduced travel time to receive medical help.

But many rural clinics would face serious financial strain if Missouri legislators implement House Bill 2081. I want to make it clear that there is no ill intent on the part of the bill’s sponsor. On the contrary, the goal is to form a reasonable bulwark against abuse; however, the proposed legislation risks inadvertently causing harm in its pursuit of that goal.

Let’s take a step back and focus on the big picture.

On its face, HB 2081 appears sensible. Its goal is to ensure that financial benefits associated with the 340B program are used as intended — to support patient care and health clinic operations, rather than being absorbed into large institutional budgets. To accomplish this, the bill requires healthcare facilities to provide periodic, detailed financial reporting of 340B-related expenses and imposes steep penalties for noncompliance, including fines of up to $1,000 per day.

But good intentions often collide with reality on the ground.

The reality is that most rural clinics operate on extremely thin margins. They work with small staffs, tight budgets, and limited administrative capacity. Every new reporting requirement — no matter how reasonable it may sound — consumes time, personnel, and money. Compliance is not free. Data must be gathered, verified, categorized, formatted, and defended in the event of an audit.

For a large hospital system, this may be routine overhead. But for a small rural provider, it can become death by a thousand cuts.

The concern voiced by organizations like the Missouri Primary Care Association (MPCA) is not opposition to transparency. Rather, it is the fear that the cost of proving compliance could drain resources from patient care. Dollars intended for treatment, staffing, and services risk being redirected toward consultants, software, and administrative processes.

The paradox is ironic: a law designed to protect patient benefits could inadvertently eliminate them.

None of this is to suggest that HB 2081’s sponsor lacks concern for rural healthcare. Lawmakers are simply responding to legitimate questions about oversight, and Missourians deserve confidence that public programs operate honestly and efficiently. But complex systems like rural healthcare clinics rarely respond well to blunt instruments with severe penalties. A hammer can be used to break an egg or build a house.

When transparency is pursued through the hammer of rigid mandates and severe penalties, the burden falls hardest on the smallest providers — those least equipped to absorb it. Rural clinics, already navigating workforce shortages and financial strain, may face increased instability rather than increased support.

So, let’s consider a better path.

If Missouri truly seeks both accountability and strong rural healthcare, policymakers should focus first on reducing the cost of transparency itself. Rather than imposing immediate high-stakes reporting requirements backed by severe financial penalties, the state could adopt a phased strategy that standardizes reporting formats, simplifies aggregate disclosures, and supports providers during a transition period.

In other words, build the capacity before demanding perfection.

Such an approach would still achieve transparency. It would still allow auditing. But it would do so without forcing rural clinics to choose between compliance infrastructure and patient services. Over time, reporting could become more automated, more accurate, and far less financially disruptive.

Efficiency and accountability would grow together.

We have seen how this approach can work. When the federal government encouraged physicians to adopt electronic health records, it did not rely solely on mandates and steep financial penalties. Through the HITECH Act, providers were given a multi-year transition period, financial incentives through Medicare and Medicaid, and access to technical assistance programs that helped offset the cost and complexity of implementation. The lesson was clear: modernization succeeds when expectations are paired with support.

This is not to suggest that Missouri solve the 340B transparency challenge by simply throwing money at it. But strategic assistance, thoughtful timelines, and realistic compliance pathways can achieve accountability without destabilizing the providers who deliver care.

At its core, this debate is not about a regulatory mandate with a draconian punishment clause. It is about building trust — trust that government oversight improves systems rather than unintentionally weakening them, trust that rural healthcare providers are supported rather than strained, trust that transparency enhances care rather than competes with it.

Missouri does not have to choose between sunlight and sustainability. With thoughtful policy design, we can have both.

Become An AI Expert In Just 5 Minutes

If you’re a decision maker at your company, you need to be on the bleeding edge of, well, everything. But before you go signing up for seminars, conferences, lunch ‘n learns, and all that jazz, just know there’s a far better (and simpler) way: Subscribing to The Deep View.

This daily newsletter condenses everything you need to know about the latest and greatest AI developments into a 5-minute read. Squeeze it into your morning coffee break and before you know it, you’ll be an expert too.

Subscribe right here. It’s totally free, wildly informative, and trusted by 600,000+ readers at Google, Meta, Microsoft, and beyond.