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Financing of Childhood Immunizations in Kansas

Financing of Childhood Immunizations in Kansas. Sheldon Weisgrau Kansas Health Institute August 23, 2006. Outline. The immunization financing system Immunization costs and reimbursement (practice level) Total immunization costs and expenditures (state level) Conclusions

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Financing of Childhood Immunizations in Kansas

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  1. Financing of Childhood Immunizations in Kansas Sheldon Weisgrau Kansas Health Institute August 23, 2006

  2. Outline • The immunization financing system • Immunization costs and reimbursement (practice level) • Total immunization costs and expenditures (state level) • Conclusions • Questions and (hopefully) answers

  3. Sources of Data • Medical Statistical Information System (MSIS) – Medicaid • Kansas Health Insurance Information System (KHIIS) – commercial insurance • Large employers – self-insured health plans • KDHE, CDC, published literature

  4. The Immunization Financing System • Mix of public and private funding • Federal, state, and local government • Private insurance • Out-of-pocket • Almost all children are at least partially covered for the costs of immunization

  5. Public Financing:Federal Funds • Vaccines for Children (VFC) • Section 317 • Federal share of Medicaid and SCHIP • Dependents of military personnel

  6. Public Financing:State and Local Funds • State General Funds • State Aid to Local Health Departments • State share of Medicaid and SCHIP • County and local government funds

  7. Private Financing:Commercial & Self-Insured • Commercial insurance plans • Kansas law requires coverage of routine and necessary immunizations for all children from birth to 72 months with no deductible, copay, or coinsurance • Self-insured health plans • Exempt from state regulation • Data provided by six self-insured plans • All cover childhood immunizations with no copayments • Some have deductible and coinsurance requirements • May impose limitations on services or expenditures

  8. Private Financing:Out-of-Pocket • Out-of-pocket payments • Some children may have direct out-of-pocket costs • Some children may face substantial “indirect” out-of-pocket costs • Inability of patients to cover out-of-pocket costs has been cited by physicians as a reason for not providing immunizations and referring to LHDs

  9. Practice Expenses and Reimbursement • Practice expenses include cost of vaccines and cost of administration • CDC reports negotiated prices and private market prices • Medicare RBRVS values for vaccine administration used for administrative costs • Kansas practice has provided data on costs and reimbursement

  10. Practice Expenses • Total expenses for age 0-3 immunization series range from $412 to $633, depending on source of vaccine

  11. Reimbursement • Total payment for age 0-3 immunization series ranges from $631 to $758, depending on payer

  12. Economics of Immunizing Privately Insured Kids • Costs range from $412 - $633 • Payment ranges from $631 - $758 • Margin of 0% - 84% • Experience will vary depending on source of vaccines, mix of patients and payers, and practice cost characteristics

  13. Economics of Immunizing VFC Kids • Vaccine provided at no cost; provider may bill for administration • Patients paying out-of-pocket may not be able to pay admin fee • Medicaid pays $10 for administration of each vaccine • Provider admin costs for series are $348; maximum Medicaid payment is $160 • Providers therefore lose money on VFC vaccines • Important to note, however, that Medicaid payment for admin is consistent with payment by private insurers

  14. Total Costs of Immunizing Kansas Kids (2006) • Total costs of immunizing all kids born in Kansas this year range from $15.7 million to $24 million (depending on source of vaccine) • Costs of immunizing 90% of these kids is $14.1 million to $21.6 million

  15. Kansas Immunization Spending (2003)

  16. Kansas Immunization Spending (2003)

  17. Estimated Kansas Spending (2006) • Assuming 5% yearly inflation, estimated 2006 spending is $18,852,217 • This figure is in mid-range of estimated costs of immunizing 90-100% of Kansas kids • But, costs of the vaccine series are increasing (e.g., 2003 spending figures include relatively little varicella)

  18. Conclusions • Overall funding for vaccines and administration does not appear to be the central reason for low immunization rates • Structural factors may be more important • Out-of-pocket costs may be a barrier for some • Inefficiency and duplication • Provider perceptions • Development, implementation, and evaluation of interventions may nevertheless require additional funding and/or redistribution of existing funds

  19. Questions?

  20. Key Points • Total immunization funding is substantial • More than $16 million was spend in 2003 • This figure is likely close to $19 million today • Barriers to immunization remain, however, and may require additional funding to overcome

  21. Key Points • Physician practices that provide immunizations to privately insured children likely do not lose money on this service • Physicians that participate in the VFC program may not fully recover administrative costs • Medicaid payment for vaccine administration is consistent with payment by private insurers

  22. Key Points • There remains a need for more comprehensive and integrated databases to fully evaluate this issue

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