Another Vaccine Success Story

Today’s Managing Health Care Costs Indicator is 

$200 million

The October Journal of Infectious Diseases reports that rotavirus vaccine, administered to prevent early childhood diarrhea, decreased the number of hospitalizations for diarrhea by 66,000.  This represented a decrease of 69% for discharges coded as rotavirus, and 36% for all hospital discharges with diarrhea of unspecified cause. 

Between 15-20% of this decrease was due to ‘herd immunity,’ where even the 43% of infants that had not gotten a single dose got some protection because there was less rotavirus in the community due to those who did get vaccinated.  Huge decreases in hospitalizations were seen in children ages 5-14, who had not received the vaccine.  This is similar to findings with influenza vaccine, where immunizing young children might be an especially effective way to prevent flu deaths among the elderly.

The total savings from hospitalizations prevented by the rotavirus vaccine was estimated to be over $200 million.

Immunizations remain one of the few medical interventions that are not merely cost-effective, but which are frankly cost saving.  The newer childhood vaccines, which are quite expensive, probably won’t be nearly as cost saving as the older vaccines, such as the measles-mumps- rubella (MMR) vaccine.  Rotavirus vaccine costs between $60 and $70 per dose. We should we consider the prevention of disease in those who themselves are not vaccinated when we calculate the overall cost impact of these vaccines.

Mandatory Coverage of Contraception Could Increase Use of Expensive Agents

Today’s Managing Health Care Costs Indicator is $919.86

Click to enlarge. Source: Drugstore.com 

Full coverage of contraception should be a money-saver, as I noted in an earlier post.    However, my reading of HHS’s announcement makes me worried that the requirement for health plans to cover all contraceptives, regardless of cost, could lead to much higher use of less cost-effective birth control options.   

The new regulations require that  long-term contraceptive methods, such as an IUD, be fully covered, even though the woman might well be on a different health insurance plan a short while after receving this.  This is good from a societal point of view.  The long-term contraceptives (IUDs and depo-provera) are more reliable, since they don’t require users to take a pill or insert a device frequently. This increases effectiveness in real-world use, and these long-term agents tend to cost less over their duration than oral contraceptives.

Here's the worry with mandatory access to all contraceptives without patient cost-sharing.  There is a ten-fold difference in price between generic oral contraceptives and newer, heavily-marketed, branded oral contraceptives.   If insurance companies are mandated to cover each with no patient cost sharing, we could see a migration from cost-effective generics to newer drugs which cost far more and are not any more effective.  Further, when physicians prescribe these newer medicines, they don’t know whether broad community use will unearth side effects not recognized during limited pre-marketing testing.

My suggestion – the regulations should be clear that patient cost sharing is not allowed for generic oral contraceptives. Patient cost-sharing does lower utilization, and there are some costly medications which could otherwise increase the cost of health care.  Ideally, regulations should also set a maximum acquisition cost for longer term contraceptives to prevent massive future price increases.  

Generic Medications Make Prevention More Cost-Effective

Today’s Managing Health Care Costs Indicator is 98%

 Click to enlarge. Source 

Prevention saves lives – but it’s often stated that preventing disease can save money.   It’s intuitive – a mammogram costs far less than treatment of metastatic breast cancer, and a statin medication costs far less than bypass surgery or a stroke.

However, there are historically few medical interventions that are cost saving.  Childhood vaccinations save more money than they cost.  Preventing medical errors can certainly improve care and lower cost, although this is an internal quality improvement as opposed to a new medical procedure. 

But most prevention efforts can improve health care quality and lengthen life – but often at a considerable cost.

Researchers in this month’s Health Affairs reanalyze earlier research on cost-effectiveness, substituting current generic prices for the brand name prices used in past years when there were fewer effective generic medications available.

The good news – the cost per quality adjusted life year in this new analysis goes down between 58% and 98%.   Although the title of the article implies cost-saving, there are no “negative” costs for Quality Adjusted Life Years (QALYs);  a QALY can be purchased in some instances for as little $1022.

Further good news is that there are a number of “blockbuster” drugs going generic in the next few years.

Click to enlarge. Source above. See also article in today's Boston Globe. 

There are still challenges, though.  Many states have less effective laws promoting generic use, leading to higher use of more expensive brand name medicines when they offer little incremental benefit.   Many physicians still object to generic drugs, although laws limiting and/or disclosing pharmaceutical company gifts might change this over time.  Patients aren’t sure, either, and the different colors and shapes of generic medicines diminish their acceptability. 

We need to push hard for the most cost-effective approaches, so that we can better use our limited health care dollars.  This article shows the importance of promoting use of generic medications.

Past relevant  Managing Health Care Cost Posts:

Cost savings with generics, March, 2011

Senators Try to Undermine Generic Bioequivalents  January, 2011

Prevention is a Good Deal - But it's the Vaccines that Save Money!

Today’s Managing Health Care Cost Indicator is 2.3 million

Double click to enlarge image.  Last column header is "net medical costs per person per year" 

That’s how many quality adjusted life years we could gain if we achieved 90% preventive care.

Maciosek and colleagues at Health Partners in Minneapolis performed a literature review and did economic forecasts and concluded that it would cost just $72 billion annually to achieve 90% adherence to preventive guidelines. 

The authors estimate that we would save $62 billion dollars in preventable medical costs by dramatically increasing preventive care. Thus we could save 2.3 million quality adjusted life years for just $10 billion dollars, a measly 0.6% of total health care spending. (That’s a bit over $4000 per QALY – much better than most medical care!)

Honestly - there isn't a better deal around - and we should sign up.

But let's not lose track of where the savings really are in preventive care.  Immunizations, counseling to use aspirin, smoking cessation, and a handful of other things save money. Immunizations in fact are genuinely cost saving, and are calculated to save $322 per person annually, while the entire bundle of preventive services saves only $48 per person.  

So – we should approach immunizations as a public health imperative as well as a good deal.  Some states (Massachusetts is one) have purchased childhood vaccine for all children regardless of income or health care coverage - and as a result achieve VERY high rates of immunization.  In Massachusetts, funding for this program has been maintained temporarily year to year.    Many states are cutting back on their vaccination programs because of declining state revenue.

There are very few genuinely cost saving therapies in health care – and even most preventive care just offers better outcomes at a reasonable price.  Vaccinations are an exception. Let’s invest in them.