# Presentation: 799743

## Out-of-Pocket Costs Associated with Childhood Immunizations

**Out-of-Pocket Costs Associated with Childhood Immunizations**

**Noelle-Angelique Molinari, PhD**
**Health Economist**
**National Immunization Program, CDC**

## Collaborators

**Rich Schieber, MD, MPH**
**Mark Messonnier, PhD**

## Background

## NIS Data: Georgia 

## Guide to Community Preventive Services

**Strongly recommends reducing out-of-pocket (OOP) costs to increase vaccination rates **
**Suggests this may be accomplished by:**
**Providing free vaccine**
**Reducing administration costs**
**Providing insurance coverage**
**Reducing copayments at POS**

## Benefits of Lower OOP Costs

**Increased coverage**
**Law of Demand**
**price decline leads to increased quantity demanded**
**13 studies* show decrease OOP associated with increase coverage**
**Encourages medical home for all care**
**IZ more prompt & timely**

*** Briss PA et al. Reviews of evidence regarding interventions to improve vaccination coverage in children, adolescents, and adults.  Am J Prev Med 2000;18(1S):97-140**

## Problems of Higher OOP Costs

**Multiple IZ providers, esp. health depts.**
**Lower coverage rates**
**Push to seek care outside medical home**
**Disparity in OOP costs may directly result in disparity in coverage**

## Purpose

## Purpose

**To estimate OOP costs associated with childhood IZ:**
**Under current standards of care received at medical home**
**For a defined, large, heterogeneous population**
**To determine whether disparities exist by **
**Insurance status**
**Payer types **

## Methods

## Assumptions: Optimal Care

**Georgia 2003 birth cohort**
**No change in insurance distribution across age or over time**
**Full compliance with AAP 2003 vaccine schedule**
**Each child receives current standard of care in medical home**
**Each child receives shots as soon as eligible**

**Notes:**
Private insurance makes up bulk of plans – 1336 from DOI – 35 from Medstat (Medstat 2002, updated to 2003 $s)

Medicaid and Peachcare differ only by premium paid

Tricare – basically 3 plans – we use Tricare Extra since it is mid-level plan

## Assumptions: Optimal Care

**7 visits from birth through age 4**
**Each private MD visit includes well-child exam, vaccine, and administration fee**
**No new combination vaccines used**
**No submitted charges are disallowed by insurance**
** ****No shortages **
**Relative prices remain constant over time**

**Notes:**
Private insurance makes up bulk of plans – 1336 from DOI – 35 from Medstat (Medstat 2002, updated to 2003 $s)

Medicaid and Peachcare differ only by premium paid

Tricare – basically 3 plans – we use Tricare Extra since it is mid-level plan

## Universe of Potential Payers, Georgia, 2003

|  | Insurance Type | % in GA |
| --- | --- | --- |
| 1. | Private, employer-sponsored insurance, large group | 57% |
| 2. | Private insurance, small group & individual | 7% |
| 3. | Medicaid | 12% |
| 4. | Medicare | <1% |
| 5. | Peachcare (GA SCHIP) | 8% |
| 6. | Military (Tricare) | 2% |
| 7. | Self-pay (Uninsured) |  14% |

## Data Sources

| Database | # Plans | Population | Data Used |
| --- | --- | --- | --- |
| Medstat 2002 | 35 | Self-insured Large Group private insured | Reimbursement & copay rates for well child visit, vax admin, & vax, enrollment |
| Georgia Dept of Insurance (DOI) 2003 | 1300 | Individual and Small Group private insured | Copay rates for well child visit, vax admin, vax |
| Georgia DCH 2003 | 2 | Medicaid & Peachcare insured | Reimbursement & copay rates for well child visit, vax admin, & vax |
| Tricare 2003 | 3 | Military insured  | Reimbursement & copay rates for well child visit, vax admin, & vax |
| CPS 2004 |  | All | Population estimates by insurance status & type |
| CDC HIP Enrollment Survey | 1100 | Individual and Small Group private insured | Enrollment |
| NIS |  | United States | IZ Coverage Rates |
| CDC Vaccine Price List  |  | Public- and Private-sponsored vaccines | Vaccine prices for VFC and small group private insured |

**Notes:**
Private insurance makes up bulk of plans – 1336 from DOI – 35 from Medstat (Medstat 2002, updated to 2003 $s)

Medicaid and Peachcare differ only by premium paid

Tricare – basically 3 plans – we use Tricare Extra since it is mid-level plan

## Total Cost per Visit

***	*****Total Cost = **
**	****(WC Exam Fee) + (Vax Fee) + (# Vax) (Vax Admin Fee)**
**WC Exam = Well-child exam fee**
**Vax Fee = Vaccine price to patient **
**# Vax = No. of vaccines given that visit**
**Vax Admin Fee***** = *****Fee charged for administering shot**

## Out-of-Pocket (OOP) Cost per Visit

**  ****OOP = **
**  ****Copay(WC Exam)+ Copay(Vax) + Copay(Vax Admin)(#Vax)**
**Copayment is the amt. of total charges a patient pays **
**Copay can be either:**
**Flat fee  ($10)**
**Rate****	****(10%)**

## Example: Private Insurance6 mo old HepB, DTaP, Hib, IPV, PCV

| Component | Fee | Total Cost | Co-pay
Formula | OOP Cost |
| --- | --- | --- | --- | --- |
| Well-child exam | $70 | $70 | $20.00 | $20.00 |
| Vaccine (n=5) | $32
$30
$33
$28
$68 | $191 | 30% | $57.30 |
| Vaccine admin. | $15 * 1
$20 * 4 | $95 | 30% | $28.50 |
| TOTAL | $356 | $356 | 	 | $105.80
(30%) |

## Example: VFC, Private MD6 mo old HepB, DTaP, Hib, IPV, PCV

| Component | Fee | Total Cost | Co-pay
Formula | OOP Cost |
| --- | --- | --- | --- | --- |
| Well-child exam | $70 | $70 | 100% | $70 |
| Vaccine (n=5) | $10
$13
$9
$10
$52 | $94 | 0% | 0.00 |
| Vaccine admin. | 5*$14.81 | $74 | 100% | $74 |
| TOTAL | $238 | $238 | 	 | $144
(61%) |

## Example: VFC, Health Dept6 mo old HepB, DTaP, Hib, IPV, PCV

| Component | Fee | Total Cost | Co-pay
Formula | OOP Cost |
| --- | --- | --- | --- | --- |
| Well-child exam | NA | NA | NA | NA |
| Vaccine (n=5) | $10
$13
$9
$10
$52 | $94 | 0% | 0.00 |
| Vaccine admin. | 5*$14.81 | $74 | 100% | $74 |
| TOTAL | $168 | $168 | 	 | $74
(44%) |

**Notes:**
$281-$588 in 1st year for IZ, 1st year of diapers $1029 (www.naturalfamilyonline.com/5-diap/45-diapercost.htm) 
1 year of groceries for family of 4 is ~ $4400 (US Stat Abstract)

## Per-Child Cost

**Sum all costs over 7 visits**
**Discount to obtain present value of per-child cost in 2003 dollars**

**Notes:**
A dollar 5 years from now is worth less than a dollar today!

## Cost for Georgia 2003 Cohort

**Multiply **
**OOP cost-per-child for each insurance category**
**# children in that insurance category (CPS 2004 data)**
**Result is population-weighted estimate of OOP costs associated with childhood immunization for Georgia’s 2003 birth cohort**

## Results

## Total Costs per Child by Insurance Type Birth through Age 4

## OOP Costs per Child by Insurance Type Birth through Age 4

## Costs Associated with Immunization 2003 Georgia Birth CohortUninsured Go to Private MD

## Costs Associated with Immunization 2003 Georgia Birth CohortUninsured Go to Health Dept

**Notes:**
2/3 of OOP borne by Uninsured (1/7 of pop) 

## OOP Costs & IZ Coverage

*** Phil Smith provided information from NIS 2003 on GA IZ coverage rates by plan type.**

**Coverage negatively correlated with OOP costs**

**Notes:**
2/3 of OOP borne by Uninsured (1/7 of pop) 

$529 in 1st year, 1st year of diapers $1029 (www.naturalfamilyonline.com/5-diap/45-diapercost.htm) 
1 year of groceries for family of 4 is ~ $4400 (US Stat Abstract)

## Limitations

## Data are Not Perfect

**HIP Enrollment survey 61% response (enrollment per plan)**
**Tricare weights are estimated, not based on enrollment**
**Copayments are based on benefit plan descriptions rather than actual reimbursements (except Large group)**

## PossibleImplications

## Implications...

**Decreasing OOP costs *****will***** increase coverage **
**Plan designs are skewed toward low OOP costs**
**VFC reduces OOP cost & thereby reduces insurance-based disparities**
**Uninsured still face high OOP costs**
**Medicaid & SCHIP low OOP cost encourages IZ among low income children**

**Notes:**
and,....VFC has done a darned good job of it!  This is in essence an evaluation of the VFC program and a demonstration of its power in reducing costs visible to the patient.
ANOTHER MAIN IMPLICATION:
IF the goal of an entitlement program is to ensure that everyone has equal access to care (and we assume that that will generate equally provided care, although we know it won’t), AND
IF an entitlement program was set up to eliminate OOP costs for those least able to afford them, THEN
WHY shouldn’t CMS review the OOP costs for uninsured families and seek to reduce or eliminate them?  How might that be accomplished?  Pros and cons?  Unanticipated consequences?  WORTH discussing.

Are these data sufficient to make a case for such a change?  Are additional data needed? 
What else are we looking at (Otitis media costs, for example)

## Policy Implications

**Are child vaccinations (not just vaccines)****based on an entitlement or a discount program?**** **
**How might IZ coverage change with decreased availability of public health clinics?**
**Funding is not keeping pace with Medicaid/ SCHIP expansion. How will this affect IZ coverage?**

## Thank you

## Appendix

## Payments & Copays by Visit

**Individual & Small Group**

**Notes:**
Medicare – these are children that are dependents of Medicare beneficiaries that have no other insurance

Uninsured means NO health insurance AT ALL

## Payments & Copays by Visit

**Large Group**

**Notes:**
Medicare – these are children that are dependents of Medicare beneficiaries that have no other insurance

Uninsured means NO health insurance AT ALL

## Payments & Copays by Visit

**Tricare**

**Notes:**
Medicare – these are children that are dependents of Medicare beneficiaries that have no other insurance

Uninsured means NO health insurance AT ALL

## Payments & Copays by Visit

**Medicaid & Peachcare**

**Notes:**
Medicare – these are children that are dependents of Medicare beneficiaries that have no other insurance

Uninsured means NO health insurance AT ALL

## Payments & Copays by Visit

**Medicare & Uninsured**

**Notes:**
Medicare – these are children that are dependents of Medicare beneficiaries that have no other insurance

Uninsured means NO health insurance AT ALL

## Cost per Child

**Calculated present value of 7 visits using 3% discount rate with monthly basis**
**r = 3%, m = 12**
**Burden in today’s dollars of childhood vaccinations from birth through age 4**

**Notes:**
A dollar 5 years from now is worth less than a dollar today!

## Total & OOP Costs per visit by Insurance type in Georgia, 2003

## Discounted Total & OOP Costs per Child by Insurance type in Georgia, 2003

## ACIP 2003 Schedule