Shots - Health Blog
4:05 pm
Mon October 17, 2011

Vaccinations Can Be Money-Losers For Doctors

Originally published on Mon October 17, 2011 4:08 pm

Vaccines vanquished smallpox and have the polio virus on the run. And immunizations recommended routinely in the U.S. help protect people from chickenpox and cervical cancer.

But many doctors who administer the vaccinations lose money on them, according to new data from athenahealth, a company that helps doctors with electronic billing and medical records.

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.

The easy part of all this is figuring out the direct costs of vaccines, mostly the price charged. The Centers of Disease Control and Prevention tracks those prices for public contracts and also gauges the prices charged in the private market.

But what about the indirect costs, such as the costs of office personnel and vaccine storage? 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 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 breakeven, then it's an even grimmer picture: 79 percent of vaccination payments fall short.

The company recommends that insurers use CDC's published direct cost figures as a starting point for payment, then add 17 percent to account for the indirect costs.

In making their own business case earlier this year, the pediatricians wrote that their "practices are the public health infrastructure for the nation's childhood immunization program." Therefore, it's "imperative" they receive "appropriate payments" as an incentive to offer the service.

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