Financing of vaccine delivery in primary care practices

Primary care practices are the backbone of childhood immunization delivery, and have become indispensable in the promotion of public health. Over the last decades, however, the skyrocketing costs of vaccines have gone from a minor consideration in the overhead of a pediatric practice to one of significant financial burden, largely because of new vaccines. The increased risk of uncompensated costs related to vaccines in primary care practices underscores the necessity to implement strategies that can help keep vaccination costs to a minimum.

In a recent study,¹ Mandy A. Allison, MD, of Children’s Hospital Colorado in Aurora, and colleagues aimed to determine among pediatricians and family medicine physicians the relative payment for vaccine purchase and administration, and estimated profit margin by payer type, the strategies used to reduce vaccine purchase costs and increase payment, and whether practices have stopped providing vaccines because of finances. The researchers conducted the national survey among pediatricians and family medicine physicians in private, single-specialty practices from April to September 2011.

The response rate was 51% (221/430). Data showed that practices report variable payment for vaccination from different payer types, and those payments are often insufficient in covering the costs of vaccine delivery.

Depending on payer type, 61% to 79% of practices reported that payment for vaccine purchase was at least 100% of purchase price, and 34% to 74% reported that payment for vaccine administration was at least $11. The reported strategies to help reduce vaccine purchase cost were online purchasing (81% pediatricians, 36% family medicine physicians); prompt pay (78% pediatricians, 49% family medicine physicians); and bulk order (65% pediatricians, 49% family medicine physicians) discounts. The researchers also found that although some practices reported using strategies to reduce vaccine purchase cost, fewer than half of the practices employed strategies to increase payment for vaccination. Results showed that practices with more than 5 providers were more likely to use strategies compared with practices with fewer providers.

The rising cost of immunization has made vaccine delivery a financial challenge in many primary care practices. Practices must obtain and store at least 12 vaccine products to provide all Advisory Committee on Immunization Practices (ACIP)-recommended vaccines for children. Not including influenza, children may receive as many as 35 separate vaccine administrations by early adolescence.

There is a wide variation in the amount that primary care practices pay to purchase vaccines and the amount they are reimbursed by insurers for the cost of those vaccines. In addition, the reimbursement for administration of the vaccine also varies among different insurers, adding to the financial insecurity of vaccination delivery today.

In the study, when pediatricians and family medicine physicians were asked if they had stopped purchasing vaccines because of financial concerns, 12% and 23%, respectively, responded “yes,” and 24% and 26%, respectively, responded “no, but have seriously considered.”

Clearly, vaccine delivery in primary care practices today has become a financial challenge and burden. However, the implementation of various different strategies could help in recouping the rising costs of childhood immunization in the private setting.

REFERENCE

1. Allison MA, O’Leary ST, Lindley MC, et al. Financing of vaccine delivery in primary care practices. Acad Pediatr. 2017;S1876-2859(17):30353-30354.