Shari Rudavsky, has a story on the new state policy making it tougher for kids with insured parents to get vaccines from county health departments. The state – possibly at the direction of the feds – is instructing county departments of health not to provide vaccinations to kids whose parents have health insurance. The rationale isn’t that horrible – they don’t want subsidized medicine going to people who don’t need the subsidy. The effects are a little more complicated.
Due to the weird economics of the vaccination business, it’s not uncommon for a family physician to not maintain stocks of the necessary vaccinations. Even at somewhat elevated prices, it doesn’t make financial sense for these family physicians to maintain stocks and provide vaccinations at the reimbursement rates provided by insurers. So, they send their patients to the county departments of health where the vaccinations have traditionally been available at a lower price in any case.
My family has been insured, but not generally in a way where we get much benefit that defrays the costs of vaccination. Initially, we went to our pediatrician for vaccinations, but discovered the county health department was a lot cheaper for routine shots for the kids. So far as I know, we weren’t asked about our insurance status or ability to pay; they just had a price that we paid. If those vaccines were subsidized, I had no idea.
This new policy doesn’t consider whether the insurance you have mitigates the out-of-pocket expense for the vaccination. It just, apparently, requires county departments of health not to provide vaccinations to the insured.
I guess my main beef with this whole thing is the opaque pricing for vaccinations. How much does it cost to produce the medicine? Tack on a little bit more, and I’ll pay it. But, with pharmaceuticals, you have some unknown cost to recoup for its development, a little more to pay for development that didn’t pay off, a little more to pay for sale of the medicine in jurisdictions where the price can’t be jacked up, and a little more just because they can. The combination of the monopoly power inherent in intellectual property coupled with the dysfunctional medical market place is a toxic brew. Getting medicine reminds me a little of that scene in “Family Vacation” where the Griswolds need tires in the middle of nowhere near the Grand Canyon and they have the exchange, “how much do I owe you?” // “How much you got?”
It seems likely that municipalities will revisit this decision once county hospitals start filling up with measles cases.
True. It’s not as if vaccinations only benefit the person getting vaccinated. They benefit everyone with whom that person comes into contact. Same reason I balk at individual liberty where the anti-vaccination crowd is concerned.
I am not one to defend pharmaceutical companies, but by your definition Doug, almost every product has “opaque pricing”. I remember the comment about one of the big 3 auto manufacturer’s: “if an automobile company is paying more for health insurance than it is for steel, it needs to reexamine its expenditures.
Another good example would be bottled water. How much do you think it costs to produce a liter of water? Yet it costs $1 a bottle everywhere you go (almost independent of size).
I agree that just about everything has some degree of opaque pricing, but the pharmaceutical industry is one of the worst offenders. Even new cars come with a MSRP, which doesn’t really vary that much by manufacturer across each class of car. In that case, the retailers (dealers) jack with the prices through costly add-ons and allowing haggling, something you can’t really do with vaccines. As to bottled water? Really?
As a practical matter, vaccines are more or less a required expenditure which, while they do provide an individual benefit, they also provide a net benefit to public health at large, as Doug mentioned above.
Everyone knows that bottled water prices are jacked up by insane margins. The difference between bottled water and vaccines is that you’re paying for the luxury of convenience when you buy that bottle of Poland Spring that you pick up at the supermarket. You can buy a re-useable bottle and fill it up at any faucet for pennies instead.
Given the vast disparity in prices for the same drug as obtained through differing methods, I don’t think it all that unreasonable to ask for a bit more transparency in the pricing of vaccines or even other pharmaceuticals.
This is not only a childhood disease issue. Every adult should consider getting a flu shot, and the corner clinics (Walgreens and CVS for example) can provide them for about $25. But the elder person vaccines are more expensive, for example the shingles vaccine, cost me (insured) nothing but my fried (less well insured) can’t afford it, as she would have to pay in excess of $200 for the shot. These are on the whole recommended but not required. There is also a pneumonia shot for elders but I don’t know the cost of that. These diseases are not terribly contagious like measles etc, but can lead to painful complications and death. I guess the high cost of treating these complications might be passed on to the public sector.
If you just paid for the g-d vaccine yourself, how much would it cost?
Seriously, is this REALLY an issue? PAY FOR IT OUT OF POCKET!
That is all. ;)
If more people would just pay for their own health care out of pocket, many, many of our “problems” with health care would disappear.
I do pay for it out of pocket. I just want to know what the stuff costs so I’m not getting gouged by some sort of mystery mark up at the point of sale.
Cost is irrelevant. If someone is willing to sell me something for $10 that I think is worth $10.01 to me, I should buy it.
Doesn’t matter if it cost the guy .90 or $9.90 to produce it.
Sure it does, because my notion of a fair price ought to be grounded in something – and cost of production is an excellent starting point.
I assume, Doug, that you’ve never paid for a text message on a mobile phone? The markup on that is in the scale of 1000’s of percent over cost.
http://money.cnn.com/galleries/2010/news/1001/gallery.americas_biggest_ripoffs/index.html
Do I think that is ridiculous? Yes. Do I find it offensive enough to never pay for those? No.
There are many more examples where we pay for the end result rather than markup over cost. I do some IT consulting on the side for anywhere between $35/hr to $150/hr. I’m sure your legal fees also vary depending on what you’re doing. I KNOW my fees are based on what the market will pay & what I’m willing to take, not what that time costs me. Do you have your costs figured out & mark up based on that?
Sure it does, because my notion of a fair price ought to be grounded in something – and cost of production is an excellent starting point.
Wow. I understand now. That simple sentence, right there, explains why liberals like Doug have such a hard time with the market system.
“fair price”? What is that? The question really should be, are you going to buy the vaccine or not. If so, you must value it more than the cost. If not, you must not. There is no moral question, which is what, I assume, “fair price” is getting at.
Doug, the only thing that matters is, what is the value of the vaccine to you. The cost is irrelevant. Which, I believe, Paul C already said.
If lots of people value the vaccine, the vaccine company will make lots of money, and they might even raise the price. If they make lots of money, more than likely other companies will come into the market (if the FDA will let them!), and probably lower the price.
This is economics 101 stuff. Hard to believe that a college educated person doesn’t understand it. But then, education is more about validating beliefs you already have than convincing you that your beliefs are wrong. ;)