For Pediatricians, Giving Vaccines Is An Ethical Dilemma

Written by Brandon Betancourt, MBA

One aspect of the vaccine controversy that doesn’t get discussed as often as I would like, is the notion of vaccine economics. Vaccine economics has to do with what I refer to as the distribution, consumption, management and cost of vaccines.

I was happy to see a blog post on the NPR that discusses some of the challenges, with regards to vaccine economics, many pediatricians face. Here is what they had to say:

After looking at what insurers paid more than 1,400 doctors for eight different vaccines, athenahealth concluded that almost half the time the payments weren’t large enough to cover estimated costs.

You don’t need to be an economist to know that loosing money isn’t good for anybody and certainly unsustainable; no matter how altruistic your motives maybe.

The blog post also highlighted that the problem might be worse than the research indicated.

The American Academy of Pediatrics came up with estimates for indirect expenses, concluding they range from about 17 percent to 28 percent of the purchase price of vaccines. So at least 17 percent should be tacked onto the purchase price for doctors to have a shot at breaking even, the group concluded.

By that measure, 47 percent of immunizations are money-losers, the athenahealth data show. If the 28 percent figure for indirect costs is used to calculate break even, then it’s an even grimmer picture: 79 percent of vaccination payments fall short.

This puts pediatricians in an ethical dilemma. On one hand, pediatricians will always do what is in the best interest of children. And there is overwhelming scientific evidence that vaccines are among one of the greatest medical innovations of our time.

On the other hand, preventing illnesses like Polio, Rubella and Measles in children cause pediatricians to actually lose money. In other words, pediatricians are in essence subsidizing – at their expense – the wellbeing of children.

The anti-vaccine movement

One of the anti-vaccine movement arguments is that vaccines are a profit center for doctors and that pediatricians are putting profits over the well-being of children. That is simply not true. And the research published by Athenahealth (click here to go the the study) clearly shows that profit is certainly not an issue.

When payment to physicians for vaccines often does not even cover the costs associated with administering those vaccines, this claim is so ludicrous as to be non-sensical.

The benefits of vaccines

  • The rate bacterial meningitis declined by 55%  in the US in the early 1990’s, when the hemophilus influenza type b otherwise know as Hib was introduced. (NEJM 364.21, May, 2011)
  • Varicella mortality declined 88% overall and 96% among subjects younger than 50 years (Pediatrics 128:2, August 2011)
  • Current immunization practice and herd immunity have virtually eliminated many infectious causes of serious morbidity and mortality in the USA.

It’s almost ironic that immunizations have done so much for public health, yet their value has not been recognized.

What is most frustrating to doctors is that immunizations are perhaps most cost effective preventive measure available to the pediatric population; especially when one considers the long term benefit in the equation for payment.

Yet insurance companies, driven by their bottom line, fail to view the long term benefits. For example, they reimburse a doctor for a polio vaccine below the doctor’s cost in an effort to improve the bottom line without considering the cost of a child actually getting Polio.

At what cost?

What would happen if pediatricians, driven by the cost of vaccine and poor reimbursement, decide they can’t immunize children any longer?

The poor and inadequate payment for immunizations could potentially create a public health problem if one considers that the lack of immunizations in children could break our developed herd immunity.

In fact, in the US, we’ve already seen over 150 cases of measles in 2011 and in California there were 9,500 cases of pertusis in 2010; and 10 infant fatalities which are attributed to lower vaccination rates.

As doctor Richard Oken said recently, “immunizations are perhaps the most cost effective preventive measure available to the pediatric population” thus me must consider the “long term benefit in the equation of payment.” Otherwise, “Inadequate payment could force pediatricians to outsource this healthcare benefits and bankrupt our developed herd immunity”

Perhaps more than any other physicians, pediatricians believe in, and focus on, PREVENTION of disease, stopping illness even before it has a chance to strike. If an ounce of prevention is really worth a pound of cure, skimping on spending for prevention today will surely result in spending much more tomorrow–not to mention causing more people, at all ages, to suffer from what are easily preventable diseases.

Brandon manages a pediatric practice in the western suburbs of Chicago. He blogs regularly on practice management issues at PediatricInc.com
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2 thoughts on “For Pediatricians, Giving Vaccines Is An Ethical Dilemma

  1. Thanks so much for bringing attention to this issue. On our Vaccinate Your Baby Facebook page, it is common to hear from parents who believe that doctors make large profits off vaccines. Unfortunately, they sometimes don’t trust their advice regarding immunizations because they believe they are motivated by profits. The truth is – as you’ve outlined in this blog post – is that even though medical practices are a legitimate business where it is perfectly acceptable to make a profit, doctors are often acting in the best interest of their patients, and not necessarily their bottom line. Thanks for doing your part to shed some light on this.

  2. I have a been a pediatrician for 30 years and over that time the ratio of payment to vaccine cost has dwindled to the point that we struggle not to LOSE money on vaccines. Due to the vagaries of reimbursement, we actually do better if people split up vaccines, but it is NOT in the best interest of the child. They get more pokes over more visits and are somewhat more likely to exhibit reactions, not less. Vaccines cost us more than all our employees and our rent put together, yet we make little, if anything from them. The manufacturers charge too much and the insurance companies pay too little.

    Ask yourself, why any pediatrician would be stupid enough to recommend vaccines for their patients under these circumstances, if vaccines weren’t such a proven benefit to these children?

    Richard Feuille, Jr., MD, FAAP

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