Financing Vaccines
description
Transcript of Financing Vaccines
Financing Vaccines
James Lutz, MPAProgram Manager / Senior Public Health
AdvisorImmunization Program
Philadelphia Department of Public Health
HPV
Tdap
Mening
Acknowledgements
Centers for Disease Control and Prevention (CDC)
National Vaccine Advisory Committee (NVAC)
Institute of Medicine (IOM)
Dr. Walter Orenstein, Emory Vaccine Center
Ms. Kate Cushman, MPH, Immunization Program, Philadelphia Department of Public Health
Outline
Current Vaccine Financing System Problems with the Current System Groups Currently Addressing
Problems Potential Solutions
Six Roles of the Nation’s Immunization System
Six Roles of the Nation’s Immunization System
Assure Vaccine Purchase
AssureService
Delivery
Sustain and ImproveCoverage Rates
Surveillanceof VaccineCoverage
and Safety
Control and PreventInfectiousDisease
Immunization FinancePolicies and Practices
Sources of Insurance Coverage: United States 2004*
* The percentages do not add to 100% because individuals can have more than one type of insurance either simultaneously or sequentially during the year.
Source: ASPE tabulations of the 2005 Current Population Survey
Uninsured and Total U.S. Population Under 200% of Poverty by Age in 2004
Source: ASPE tabulations of the 2005 Current Population Survey
Current Financing for Vaccines
Private Sector- Private Insurance- Out-of-pocket (providers and patients)
Public Sector- Federal PHS 317 Grant- Federal Vaccines For Children (VFC)- SCHIP - State/Local Funds
Changes in Childhood Vaccine Costs 1987-2007
1987 1987 2007 2007
CDC Catalog CDC Catalog
$33.70 $115.99 $1,152 - $1,164 (+335%)
$1,704 -$1,716 (+138%)
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
1985 1995 2006 Male 2006 Female
Dol
lars
3 HPV
3 RV
2 Hep A
1 Mening
1 Td/Tdap
4 PCV7
6 Flu
2 Var
2-3 Hep B
3-4 Hib
1-2 MMR
4 Polio
5 DTP/DTaP
Federal contract price shown for 1985 and 1995 are averages that account for price changes within that year.
$45
$155
$894
$1185
Federal Contract Prices for Vaccines Recommended Universally for Children
and Adolescents 1985, 1995, 2006
Attributes 317 VFCEligibility Not restricted < 19 years of age
and Medicaid-enrolled; or
uninsured; or Native American, Alaska Native; or
underinsured seen only at FQHC/RHC
Source Discretionary annual
appropriation
Mandatory
Stability of funding Significant
fluctuations possible; not
keeping up with current costs
Stable funding stream
Key partners Mostly public Private and public
Two Major Federal Funding Sources
317 Immunization Grants
6%
Vaccines for Children (VFC)
43%
State 5%
Other/ Private Sector46%
Childhood vaccine doses distributed by funding source
Calendar Year 2005
Source: Vaccine manufacturers Biologics Surveillance Data 2005
Note: Does not include influenza vaccine
V F C a n d S e c t io n 3 1 7 V a c c in e V F C a n d S e c t io n 3 1 7 V a c c in e F u n d in g t o I m m u n iz a t io n F u n d in g t o I m m u n iz a t io n
P r o g r a m sP r o g r a m s
$ 0
$ 2 00 ,0 0 0,00 0
$ 4 00 ,0 0 0,00 0
$ 6 00 ,0 0 0,00 0
$ 8 00 ,0 0 0,00 0
$ 1 ,0 00 ,0 0 0,00 0
$ 1 ,2 00 ,0 0 0,00 0
$ 1 ,4 00 ,0 0 0,00 0
$ 1 ,6 00 ,0 0 0,00 0
$ 1 ,8 00 ,0 0 0,00 0
$ 2 ,0 00 ,0 0 0,00 0
19
90
199
1
199
2
199
3
19
94
1995
19
96
199
7
199
8
1999
20
00
200
1
200
2
2003
200
4
20
05
200
6
200
7 P
B
S e c ti o n 3 17
V F C
Percent increase of the cost of full series vs. percent increase of 317
appropriation
-1510356085
110135160185210235260
1999 2000 2001 2002 2003 2004 2005 2006est.
Per
cen
t In
crea
se Cost of the FullSeries
Vaccine PurchaseAppropriation
Percentage Calculations: % increases are cumulative using 1999 as the base year.
2005/2006 estimate factors in the cost to vaccinate one adolescent with one dose of Meningococcal and one dose of Tdap, and 2 doses of Hepatitis A.
The 2006 estimates are based on inflationary increases and this figure will be updated based on federal contract price updates. This estimate does not include potential new vaccines which may be added to the schedule in 2006.
Limitations to VFC
Delay in licensing of a vaccine by FDA and recommendation for routine use by ACIP/AAP to inclusion in VFC
Current panel of VFC providers is insufficient to reach VFC-eligible children (especially with new adolescent vaccines)
Children who are under-insured must receive vaccines at rural or federally qualified health centers (leads to further fragmentation of care)
Section 317 Federal Discretionary Vaccine
Grant Congress must appropriate budget
each year Because discretionary, the 64 Grantees
(50 States, DC, NYC, Chicago, Houston, Philadelphia, San Antonio and the U.S. territories) must follow no eligibility requirements for 317 granted vaccines
Used differently across the Grantees (e.g., adults, non-VFC children, clinics, private providers)
State/Local Public Health
State contributions include– Medicaid – administration fees only– Contribution to system infrastructure– Contribution to vaccine purchase (States may
purchase from the Federal contract) Extent of state contribution is variable
and impacted by addition of new vaccines to the recommended immunization schedule
State Policies: Child Vaccine for Private
Providers VFC only 38%
VFC & underinsured 20% VFC & underinsured select
16% Universal select 12% Universal 14%
Vaccine Funding For Adults (19-64 Years of
Age) at Risk? Virtually non-existent in the Public
Sector Vastly under-utilized and under-
funded in the Private Sector Small percentage of adults at risk
vaccinated via funding from manufacturers’ vaccine assistance programs.
Medicare Coverage
Part B pays 100 percent for the influenza and PPV vaccines and their administration.
Part B pays 80% of the Medicare-approved amount for hepatitis B vaccine after the yearly Part B deductible is met for those at risk.
Zoster vaccine covered under Part D Medicare vaccination benefits have
been under-utilized.
Issues with Public Insurance
Delays in VFC coverage of newly recommended vaccines
Appropriateness of administration fees for Medicaid-insured children?
Responsibility of provider to collect out-of-pocket administration fee from family for VFC vaccines administered to uninsured
Other Public Sector Issues
317 Program funding not keeping pace. Impairs states’ ability to:– Provide universal coverage (in universal
states)– Cover State eligible (underinsured) in VFC– Cover adult vaccinations for uninsured (HPV,
Tdap) Not all State contributions are keeping
pace.
Public Sector Medicaid Vaccine Administration
Fee Maximum allowable fee set by HCFA for each
state– Published in Federal Register September 2,
1994– Has never been updated or changed – No minimum administration fee– States match federal funding using their
FMAP rate VFC providers are not allowed to turn away
an uninsured child for inability to pay the administration fee (many eat the cost)
State Contributions to Medicaid FFS Vaccine Administration Fees
< $1.00Hawaii
$1.00-2.00ColoradoConnecticutIowaKentuckyMaineMissouriNew HampshireNew JerseyNorth DakotaTexasWisconsin
$2.00-$3.00AlabamaArkansasIndianaLouisianaMississippiMontanaNew MexicoOhioPennsylvaniaSouth DakotaUtahVermontWashington
$3.00-$4.00AlaskaGeorgiaMichiganNebraskaNevadaRhode IslandSouth Carolina
$4.00-5.00CaliforniaFloridaIdahoMarylandMinnesotaWyoming
Medicaid Fee-For-Service Vaccine Administration Fee by
State, 2005
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
CMS Contribution
State Contribution
Maximum Cap
State contribution
CMSmatch
CMScap
Federal Impact on Private Sector Coverage
Many insurers key off of ACIP, but ACIP recommendations are slow to be published;
Publication in CDC’s MMWR signifies acceptance of recommendation by HHS;
Example: HPV – MMWR publication date was 10 months after ACIP vote;
Need more rapid way to signify HHS acceptance than MMWR publication.
Issues with Private Insurance
Variability in reimbursement for vaccine and administration costs – no clear standard
Movement toward employer/beneficiary purchased catastrophic policies not including preventive services
Limits on reimbursement for vaccines given by specialists (I.e., not given by “PCP” = oftentimes no reimbursement)
Delays in amending contracts to include newly recommended vaccines
Private SectorInsurance Issues
AHIP survey (61/140 - 44% response rate) 91.8% follow ACIP recommendations 62% of plans reimburse based on Thompson’s Average
Wholesale Price (published quarterly) Only 47% of PPO’s who responded act on ACIP
recommendations within 3 months Most plans wait until final CDC recommendations are
published in MMWR
Source: AHIP Coverage. Immunization Practices and Policies. Jan-Feb 2006.
Administrative Costs to Vaccine Providers
Storage of vaccine Upfront cost of vaccine versus
wait for reimbursement – the “float”
Wastage and non-payment Office and medical staff time Office and medical supplies Counseling time for each vaccine
What is the Problem?
New vaccines added to the schedule and new vaccine recommendations have created a crisis in the delivery system
This crisis threatens to greatly reduce or eliminate the private provider role in delivery
Threatens to (further) fragment the medical home
Increased stress on the public sector
What is the Problem (continued)?
The crisis is not readily visible– There is no resurgence of vaccine-preventable
diseases due to failure to vaccinate– Morbidity not yet prevented by new vaccines may
not be recognized as a big problem– Our goal is to prevent tragedies, not to deal with
them– Our goal is to assure all persons have no financial
barriers to access to all vaccines recommended by the ACIP
– Warnings have been sounded. We ignore them at our peril
2004 Institute of Medicine Report
Study supported by CDC Committee formed in 2002 Four meetings Commissioned survey of state vaccine
finance practices Commissioned 8 background papers Report previewed in late 2003 Report issued in 2004
2004 IOM Report Recommendations
New insurance mandate, government subsidy, and voucher plan for vaccines recommended by ACIP;
Alter ACIP membership to associate vaccine coverage decisions with social benefits and costs, including price;
NVPO convene stakeholders; CDC initiate a research program to improve
measurement of the societal value of vaccines
Groups Working to Address Vaccine
Financing Problems NVAC Working Group on
Financing AAP Task Force on Immunization Infectious Disease Society of
America American Medical Association
NVAC Vaccine Financing Meeting
June 28-29, 2004 61 participants
– Large manufacturers and biotech firms– Fed, state, local health departments– Distributors/purchasers– Health care providers– Consumers
Pros and cons of options? Additional options? Which option supported and why?
Summary of June 28-29 Meeting
Agreement on:– Vaccines are
undervalued;– Assure access– Adequate reimbursement– Regulatory harmonization– Strengthen liability
protection– Better understand
insurance coverage– Better understand
factors responsible for low immunization coverage in adolescents and adults
Little support for IOM proposal for mandate, subsidy, and voucher;
Many favored improvements in current system:– Expanding VFC for
underinsured children– Removing VFC price caps– “Vaccine for Adults”– Increase Section 317 for
children, adolescents and adults.
2004 NVAC Work Group Recommendations
Expand Section 317 and rapid appropriation when new vaccines recommended, cover adolescents/adults; Expand VFC: underinsured children in all public and private settings, remove price caps; Regulatory harmonization to facilitate vaccines licensed in other countries; increase communication; Promote “first dollar” insurance vaccine coverage, administration fees, and prompt coverage of new vaccines.
Where are We Now?
IOM proposal for mandate/subsidy/voucher has not been implemented
ACIP does consider cost effectiveness (but not IOM emphasis), membership includes health economist
NVAC recommendations:– 317 essentially the same– VFC expansion proposed but not passed– Foreign vaccines not yet implemented
Vaccine coverage rates still high (?)
2006-7 NVAC Working GroupCharge
Obtain input from stakeholders …on the challenges in creating optimal approaches to vaccine financing in both the public and private sectors, and their impact on access.
Establish a process for selecting and addressing 2 – 3 key topics per year with input from the subcommittee chairs
By the end of each year, have developed specific and targeted policy options for the first 2 – 3 topics, and be prepared to address another 2 – 3 topics in the next year.
Present findings and policy options to the full NVAC for discussion and recommendations.
Working Group Membership
NVAC– Gus Birkhead, chair– Jon Abramson– Jon Almquist– Mark Feinberg– Gary Freed– Lance Gordon– Alan Hinman– Calvin Johnson– Jerome Klein
AHIP – Alan Rosenberg Nat’l Business Group on
Health - Liz Greenbaum/Ron Finch
Health Economist - Mark Pauley
Academia - Walt Orenstein Agency liaisons
– CDC – Lance Rodewald– CMS – Jeff Kelman
NVPO– Bruce Gellin, Angela Shen,
Ray Strikas, Emma English
NVAC Working GroupData Gathering Plan
Interviews with individual manufacturers Survey of office practice managers on current
costs, charges, and reimbursement experience Survey of physicians on attitudes on finance
issues Possible survey of insurers, self insured
employers Fact finding with CMS Stakeholder hearing planned
Finance Working Group Focus
Public Sector:– Administration fees:
Medicaid admin fee not adequate in many states No administration fee in VFC for uninsured
(providers may charge parents but cannot turn anyone away for inability to pay).
– 317 Program not keeping pace Private Sector:
– Pharmaceutical issues – inventory costs– Insurance issues – coverage
Ideas to Fix Public Sector FFS Administration Fees?
State-by-state lobbying to raise state contribution
Raise the maximum rate Require a minimum rate Increase Fed/State share Adjust rates to incentivize
combined antigen use VFC take-over of
administrative fees
You
HHS
Congress Congress
?
AMA Congress
What Who D: FFS rates don’t
impact Managed Care
D: Most states already not at maximum rate
D: States will oppose ?
? A: Covers uninsured
kids in VFCD: Opens up VFC
Ad/Disadvantage
Insurance Mandates?
High proportion of insurers say they follow ACIP. Even states with mandates, it is difficult to determine
how much to reimburse (?AWP+25%) Mandates don’t always specify administration fee How is “appropriate” level of reimbursement agreed
upon? – Voluntary guidelines versus mandates States cannot regulate ERISA (self insured) plans Explore insurance tax incentives?
Private SectorPharmaceutical Solutions?
Ways to reduce the financial burden on vaccine providers– Have vaccine manufacturers fund the
inventory in physician practices;– Frequent, small frequent shipments (“just
in time”) to reduce inventory costs;– Defer payment by providers for more than
30-60 days (help with the “float”)
NVAC Working Group Process
Continue discussions with CMS Physician surveys – Fall 07 Stakeholder hearing – Fall 07 Plan first White Paper with
recommendations to NVAC and Assistance Secretary for Health by Fall 07
Support adequate 317 funding
Summary
Vaccine finance/delivery system is in crisis due to funding system not keeping pace with new vaccines added to the schedule and new vaccine recommendations
Financial barriers to access must be removed
Providers bearing brunt of burden: Must receive more reasonable reimbursement for vaccines, vaccine inventory and maintenance, vaccine administration, etc.
Summary (continued)
Radical changes to current financing system are unlikely due to the political strength and opposing perspectives of the key stakeholders (Provider organizations, insurance industry, vaccine manufacturers, Federal/State/Local administrations, etc.)
Improving financing system necessary but not sufficient to improving access to vaccines (e.g. influenza rates in Medicare)
Potential solutions will likely come via an incremental approach addressing problems issue by issue
Thank You! Questions?
Jim LutzPhone# (215) [email protected]