Most vaccines create a cost in the current time period for a benefit at some distant point in the future of an avoided disease. This creates a “have to” versus “want to” situation for insurers.
Insurers, for most preventive care services, are in the same mindset I was in as a teenager when it came to cleaning my room. Good enough was a low bar to clear. Clean claims will be paid on time and in full but without extra motivation, the business case to promote most prevention services is weak for an insurer that figures they’ll not cover that person in a few years. Motivation is needed.
Insurers will pay claims if they come in as they have to. They may not want to encourage more people to get the preventive services who otherwise would not have.
My Duke Margolis colleague, Dr. Peter Ubel, raises this point from the provider perspective on HPV vaccination rates and reimbursement. HPV vaccines are administered to young teens. The pay-off is a decade or more later in avoided cervical, throat and lip cancers.
something else that’s preventing kids from getting vaccinated ….
The HPV vaccine is expensive. According to the CDC, the 3 doses needed for complete vaccination cost almost $500….
According to a study out of the CDC, there is sizable geographic variation in how well providers are reimbursed for vaccine administration. The most generous state is Pennsylvania, where private insurers pay an average of $194 to physician practices for administering the vaccine, and thus almost $600 for all three. The next most generous state is Nebraska: go cornhuskers! But in last place stands the terrapin state, Maryland, where providers can expect to receive an average of only $150, with neighboring Washington, D.C. not far behind (ahead?) at a rate of only $154.
What is the result of this stinginess? Areas with lower vaccine reimbursement rates also have lower vaccination rates. According to the CDC team, a $1 decrease in reimbursement for the vaccine is associated with 25,000 fewer adolescents getting at least 2 doses of the vaccine.
This is an area where the business case for vaccination falls apart from the point of view of the current insurer. They spend money now and there is no way in hell they will ever see a benefit in averted costs. Therefore, they’ll pay the HPV claim if it is presented to them but they will work hard to not get the services sent to them.
The business case solution is to make offering HPV a break even or a profitable service for both the clinicians and the insurer. That means raising the payment rate insurers send to clinicians so that the docs will shoot their patients up with the vaccine. It also means adding HPV and other potentially expensive vaccines with long/slow payoffs to risk adjustment systems. Doing that will create a strong business reason for insurers to both want to and have to cover HPV vaccinations.
Right now, the solution of mandating HPV vaccine claims to be paid is not working as the insurers have to but don’t want to.
On the Road and In Your Backyard
Dr. Ronnie James, D.O.
The ACA created a Prevention and Public Health Fund, which at least in the beginning, HHS was seemingly struggling to spend: it’s mandate was pretty discretionary, and a lot of questionable “public health” expenditures got funded. The GOP cut away a lot of it, but this use case – providing funding incentives to defray the upfront cost of preventive services (which in some cases ACA mandates) seems like a pretty great use. HHS can index the rates to estimated preventive benefit and local reimbursement rates, ideally in a way that matches insurer outlays to avoid obvious moral hazard. It also addresses the issue that USPSTF guidelines do not rate cost-effectiveness, just preventive benefit.
Bobby Thomson
is this a Coasean argument or am I missing something?
David Anderson
@Bobby Thomson: It’s at least a kissing cousin of a Coasean argument, more of a time shifting argument so think more like a Cochrane residual health bond idea but the same family of arguments.
whippybear
Are insurers missing the point of vaccines as something that collectively and not just individually decreases future cost. Sure the person who got the vaccine might not be with the same insurance carrier, but vaccination is still decreasing the chance that people with the insurance carrier will get infected while covered.
Betty Cracker
What a stark example of an amoral system, where delivering shareholder value in the short term trumps saving lives and alleviating needless suffering. Thanks for calling our attention to it!
Starfish
Could we look at the STD rates for these states and see if it would make sense for some of these places to throw more funding at HPV vaccine based on the rate of other sexually transmitted stuff?
I recall someone telling me that a pharma rep enthusiastically told her that “yes, we sell a lot of that medicine here in Baltimore” before the pharma rep realized that what she was selling was something to either treat gonorrhea or syphilis.
David Anderson
@Betty Cracker: It is a free rider problem.
Lets assume 2 insurers: A and B
A pays for HPV at a level that is sufficiently high enough to make it a “want to” for clinicians. A pays out a lot of claims for HPV vaccines. Premiums are equal to Claims + Admin. Premiums are high.
B pays for HPV at a low level. B pays out few HPV claims. Premiums are low.
Most people are price sensitive insurance shoppers because they are relatively healthy and low cost in this time period. A gets no benefit from being socially good in this time period and it loses a ton of business to B.
Haroldo
@David Anderson:
Have folks looked into a shared resource/funding base for preventative measures? (Even if this were to be, I suspect we’d have a tragedy of the commons problem.)
some_doc
So insurers have to be bribed to follow the explicit law and provide effective middle-man services for some of the cheapest and most cost-effective health care measures out there. What value does the insurer bring to this situation again?
David, your comment at #7 is a classic argument for why a market approach does not work for health care. For example, the consumer making the decision does not and cannot have any clue about provider HPV reimbursement rates or how that will impact their health if they choose A or B (or a million other variables). You also describe a company effectively circumventing (i.e. breaking) the law that requires coverage of a service, intended to prevent exactly the situation you describe. Again, what value or purpose does the insurer provide in this situation?
Like Betty said, thank you for calling out the absurdity of the “insurance industry”.
Another Scott
I remember back in ye olden days (~ 1968?) of getting vaccinations in my elementary school. The kind with the big scary air gun that left a round scar on our shoulder. Smallpox? The whole school was done, IIRC.
Presumably that was done via the Public Health Service.
I don’t recall any paperwork that involved any insurance company. Maybe our parents had to sign permission slips or something, but there was no obvious costs to them (or to us 3rd graders).
Why can’t we do things like that for the HPV vaccine? Surely the companies would love to sell more of the vaccines without having to deal with the uncertainty of when they would get paid…
(sigh)
The Public Health Service could be a huge benefit in improving vaccination levels, reducing preventable disease, reducing our abysmally high infant mortality rate, etc., etc.
Cheers,
Scott.
stinger
@Betty Cracker: Yep. Never let anybody tell you that health insurance companies care about your health. They exist solely to make profits.
Another Scott: I remember lining up, accompanied by siblings and our parents and a hundred other people, to get a sugar cube. No idea how it was paid for, but it couldn’t have been much if my dirt farmer dad got his six kids the vaccine that day. Same with the upper-arm airgun — though I can’t remember which was first/the more modern delivery method.
Alex
I don’t think it’s about rational calculation for many insurers– they just deny everything rather than trying to figure out what’s valuable, just like a consumer with a high deductible avoiding all medical care. My insurer, BCBS, is currently making it as hard as possible for me to get a low-cost generic medication that will take the risk of premature birth in my high-risk pregnancy down by about 20 absolute percentage points. This is not about a long time horizon making it unprofitable, or about a high NNT. They could pay for thousands of people to get this medication and still break even if they prevented one NICU stay. But they put up lots and lots of barriers (weird time windows for getting preauthorization, requiring it to be given weekly in the doctor’s office, etc) clearly designed to discourage people from using it. They’ve done similarly stupid things in that past that make me think their strategy is just blanket denial.
daveNYC
@whippybear: With something like measles, there’s a good chance that the vaccine will prevent the disease while the vaccinated person is still on that company’s coverage. The complications from HPV are so crazy out in the future though, that there’s no guarantee that the company will benefit from providing the vaccine.
And that’s assuming they’re not just being dicks about things.
Thistle313
When my kids were young, the HPV vaccine was fairly new — and not covered by insurance. It was also ~$280 per dose. I took the kids over to the county health department (in Michigan) and they gave it to the kids for $9/dose. I wonder if this is still an option today, and if so, how many people know about it.
jl
If we go the route of improving Obamacare (Go Swiss!) we might find this issue is intractable. Immunization rates in Switzerland (and I think other Obamacare done right model, Netherlands) are just average in Europe. And since they have uniform fees, and immunizations are covered under their mandatory health benefit package, seems that high immunization rates are hard to achieve due to lack of ‘business case’ even in much more highly regulated systems with better incentives for long run health investments.
Many cantons in Switzerland have resorted to providing childhood immunizations as part of their public health school programs (along with physical examinations, and primary dental and eye care, though IIRC, some of that care is in the national school health service program).
BruceFromOhio
@daveNYC: That’s what I was wondering. It’s not HPV, but it’s a similar lane?
Childhood vax is for childhood diseases, you bet your ass you’re gonna pay if little Susie or Johnny winds up in ICU for chronic pertussis because Mom & Dad are morons. Let there be one (just one!) case where an insurer recoups losses for covering treatment of a measles patient because some other kid’s parents live in denial, and vax requirements to be insured will descend like avenging angels.
jl
Oops, should have looked up Netherlands to make sure I am up-to-date. Netherlands had to establish a national childhood immunization public benefit to get high immunization rates. Childhood immunizations are part of free (to patients) national public health program, and most of them appear to be given at public health clinics, some devoted to childhood immunization.
The Netherlands was the model of gubernator Arnold’s failed attempt to reform California health care (which was viciously torpedoed by his own miserable state GOP party). Seems like high immunization rates are hard to achieve in any Obamacare type system, no matter how well designed.
Details are available at the WHO European Observatory on Health Systems and Policies, under publications, Health System Reviews, Netherlands (no link to pdf since they are massive reports)
Dr. Ronnie James, D.O.
@Haroldo: [cough! Comment #1! cough!]