Editor’s note: For more on this topic, check out the February issue of Health Affairs on vaccines.
The United States benefits from generally high childhood vaccination rates, the cost savings of immunizations for both individuals and society are soundly documented, and health care professionals overwhelmingly support the need for vaccination. But the burden on the private sector to deliver this public health benefit is increasing, with little recognition or support from the public sector.
First, the cost to vaccinate is not adequately compensated by the public sector. Second, administrative burdens on providers to participate in the Vaccines for Children (VFC) program are increasing in the name of accountability, yet without recognition or financial support to offices that deliver VFC vaccine. Third, showcasing high vaccination rates as evidence of success masks reports from pediatricians of the amount of time it takes to encourage parents to vaccinate according to recommendations.
With adequate investment from multiple partners, the well-oiled childhood vaccine delivery system will stay that way. Without attention, the country chooses to gamble our children’s health and the future.
Cost To Vaccinate
The Vaccines for Children (VFC) program was created in 1993 in response to a measles outbreak, in an effort to prevent disease in children who could not afford vaccination. Vaccines are purchased with federal dollars, distributed through the states, and administered by local providers.
The cost of the vaccine product itself is completely covered by the federal contribution, but the cost of administering the vaccine is paid either by Medicaid or, less frequently, out-of-pocket by parents. The program has been overwhelmingly successful and now supplies over 50 percent of vaccine product for U.S. children, the majority of which is administered by private provider offices. However, the cost of vaccinating has outpaced the payment for administering vaccines for some offices.
While the cost of the vaccine product is covered by the federal government, administration fees and practice overhead costs are not. As noted, administration fees are typically set and paid by state Medicaid programs; parents pay in the case of an uninsured child. The national average cost of administering a vaccine is over $30, yet the Medicaid administration fee can be as low as $3.30 in some geographic regions.
In fact, regional maximum charges, updated by the Centers for Medicare and Medicaid Services (CMS) in 2012, actively prohibit Medicaid programs from paying more than $19.54 to $27.44, depending on geographic location. In comparison, the Medicare payment, without geographic adjustments, is $25.44 per vaccine administration. During the 2013-2014 Affordable Care Act Medicaid primary care payment bump, rates increased to either the regional cap or Medicare levels. While some states have maintained higher payment for vaccine administration fees, most have decreased payments to pre-2013 levels.
In addition to vaccine product and administration costs, there are other overhead costs (e.g., personnel costs for ordering and inventory, freezers with monitoring systems, and insurance against vaccine loss) that are not covered in administration fee codes, and can only be recovered through the product payment in the private sector. Because VFC providers do not pay directly for vaccines, there is no opportunity to recoup these costs. To put it succinctly, because VFC does not pay for the overhead associated with vaccine administration and because of low administration fee payments, practices lose approximately $5-15 dollars for each dose of VFC vaccine administered. Offices have threatened to leave the VFC program because of inadequate payment.
There are several potential policy solutions. First, because of cuts in state Medicaid budgets, federalization of the VFC vaccine administration fee should be considered. The process of federalization must prioritize consistent and higher payment levels that cover the costs associated with administering vaccines, as well as create a mechanism for bridging gaps in current state payment rates.
Second, federal regulators should reverse the disallowance of billing code 90461, which would ensure adequate compensation for administration of combination vaccines. Currently, the VFC program only allows payment per injection, rather than per component. Therefore, vaccines with multiple components are paid as if they had only one.
Bureaucratic burden on VFC providers has also increased in recent years. In an effort to increase program accountability, practices that participate in the VFC program are being subjected to new policies and procedures that add to the time and costs they must spend tracking and reporting vaccine administration.
Some states have implemented strict policies against borrowing. For example in some states, a physician’s office that gives a VFC-eligible child a dose of vaccine inventoried for the privately insured population—because the family does not understand and incorrectly reports their insurance coverage—is not allowed to replace it with VFC stock and must absorb the cost.
Practices are also being asked to purchase important but expensive equipment (e.g., specially designed vaccine refrigerators, duplicate systems with calibrated thermometers, and data loggers) to store vaccines, without financial assistance to do so. Other states now require financial restitution, or the purchase of private vaccine stock to replace VFC stock that was lost due to a storage incident which may not have been the fault of the practice.
Offices have recently become subject to compliance visits from the state immunization program, inherently creating tension with offices. When practices are already losing money administering VFC vaccines, this additional time and tension has caused offices to drop out of the program.
While accountability and adequate monitoring of vaccine storage are laudable and necessary functions, the VFC program is demanding time and compliance from private offices without sharing the financial burden or supporting practices in their efforts to immunize. This further fractionates a delivery system that is complicated and in need of coordination. A better solution would be to work with government, payers, and advocates to design a system of oversight that promotes accountability and meets the needs of practices and children.
Hesitancy And Messaging
High rates of both VFC and private-sector vaccination mask another “cost” that pediatricians have been bearing largely on their own — the immense amount of time required to speak to parents in the clinical setting, building trust in the recommended schedule, and helping parents make the choice to vaccinate. Eighty-seven percent of pediatricians in the 2012 AAP Periodic Survey of Fellows (unpublished) report that an average of 18 percent of parents in their practice have refused or requested to delay vaccines in the last 12 months. While many parents ultimately accept vaccination, the discussion of risks and benefits, along with documentation of the process, detract from other aspects of the well child visit.
Physicians express frustration at having to convince parents to use one of the greatest medical advances of our time, a medical advance that most wholeheartedly embrace, particularly after seeing children who have suffered from diseases now prevented by vaccines. But today’s parents have not seen these diseases to appreciate their effects; they want to participate in medical decision making and opt to do what they feel is best for their individual child, not the “herd.”
It is precisely this individual discussion that makes finding a common approach so difficult. Research shows varying results about sharing disease-specific information with families, focusing on societal benefit, training physicians to use a particular conversation model, and using educational handouts with a variety of information.
The reasons for delay and refusal are many, but all speak to the need for a more coordinated effort among multiple parties to build and maintain trust in the US childhood vaccine program. It is time for all of our partners to take action and to consider a new approach — one that steps away from answering each individual concern by providing handouts and speaking points and focuses on the values driving parents’ decision making. Offices need support in navigating conversations in a way that meets parents’ needs, and parents need information that answers some of the questions they have outside of the office.
However, most importantly, all participants in ensuring the integrity of the vaccine delivery system can better coordinate their resources and messaging campaigns to give parents consistent answers that address the beliefs underlying their concerns. The American Academy of Pediatrics stands ready to lead, but needs the support of stakeholders from across the health care community to adequately and consistently shift the landscape to strengthen vaccine confidence.
We know that pediatricians are trusted by parents when it comes to vaccinating, and the American Academy of Pediatrics strongly supports its members who vaccinate. Children who receive their vaccines in a medical home are more likely to be up to date on vaccinations, and over time the public health system has come to rely on delivery of immunizations through primarily private sector medical offices.
Pediatricians should not be expected to subsidize, on their own, the public’s interest in preventing vaccine preventable disease across populations by providing vaccines at a loss; clinicians and public health have a shared stake in the effort. Without finding a better balance of burdens and jointly advocating for an adequate public health system, a delivery model that has been carefully built to benefit children may become a casualty of bureaucracy and communication flaws.
It is time for a serious discussion about the needs of the public sector, the capacity of the private sector, and shared values and burdens between the two to ensure the health of our nation’s children.