A recent Associated Press article discussed the roadblocks faced by the new cervical cancer (HPV) vaccine. Specifically, many patients cannot find the vaccine because few pediatricians and even fewer gynecologists are willing to give the vaccine. Why? The cost of the vaccine and reimbursement from managed care companies. In many cases, a managed care company says they “cover” the vaccine; however, their reimbursement to the physician may be less than the vaccine costs. This problem is in the news with regards to the new cervical cancer vaccine, but it is a problem with many other vaccines as well.
Vaccines are the single biggest expense in my practice, after staff costs. I have to purchase the vaccines before I give them and long before I am reimbursed by an insurance company. I have to store them according to rigid standards and the government makes me track how I store them and at what temperatures. I also have to pay for each vaccine dose I buy into a federal fund to pay anyone who might be injured by a vaccine. Each insurance company reimburses me according to a different scale and updates their reimbursement on a different schedule. They all try to pay as close as possible to the average wholesale price, which means paying no more than what the vaccine costs, on average, which means that my costs to stock and to store the vaccine are not covered.
Unfortunately, many insurance companies do not keep up with average wholesale price, and quickly can be paying less than the actual cost of the vaccine. Sometimes pediatricians, including myself, are willing to accept this to a certain degree for a short period of time because it is in the best interests of children, even if it makes no business sense. However, with vaccines as expensive as the cervical cancer vaccine, many physicians cannot afford to pay up front to buy the vaccine and then receive marginal or less than cost reimbursement. Many practices simply cannot afford it.
Pediatricians, who give the majority of vaccines, are becoming increasingly frustrated. According to the article, one pediatrician summed up the problem by saying that insurers paying their executives millions won’t give him $25 to cover his costs, but will spend tens of thousands if a patient develops cervical cancer.
Some practices are simply not providing the vaccine. Others send parents to the pharmacy with a script, making them pay for it (usually higher than it would cost at the doctors office), and then attempt to get reimbursed from the insurance company. Others make parents pay up front and seek reimbursement from their insurance provider, as health insurance used to work. Others charge a surcharge to cover the cost of the vaccine, though managed care contracts technically prohibit this.
The reimbursement issues and roadblocks with the cervical cancer vaccine are by no means unique, and we are facing similar issues with other new vaccines like the rotavirus vaccine, as well as some older vaccines as well. Unfortunately, it is patients, in this case children, who are getting caught in the middle of our dysfunctional third-party payer system.
