Universal Basic Vaccines?

The following is a bloggier, graphier version of a long-form piece I wrote for Merion West last month on the case for free vaccines. If you’re so inclined, give it a read there so the editors think I’m cool!

In July, the Trump administration announced it had committed to buying 100 million doses of an unfinished Covid-19 vaccine being developed by Pfizer and BioNTech. The vaccine entered late-stage human trials on July 27, with the hope that it will be approved before the year’s end. If and when it obtains Food and Drug Administration approval, the vaccine will be delivered at no cost to the consumer, regardless of insurance status.

That could be characterized as an interesting play for an administration that made it one of its first orders of business to weaken the Affordable Care Act—not to mention a political party that spent the Obama years railing against “socialized medicine!” And indeed, many were quick to point out that in this instance, the United States is acting very much in the image of a country with a national healthcare system, the implicit critique being that the Coronavirus pandemic exposes weaknesses of “market-based healthcare” that are present under normal conditions.1

There’s some merit to this, of course. But more importantly, I think we’ve actually hit on a rare opportunity for compromise in the national healthcare debate: free vaccines. Whether or not this ends up being the first step in the path to single-payer healthcare, I think it would be a good idea. (Note: not all reform proposals are technically for a “single-payer” healthcare system. I’m using the term as a catch-all because it has a more neutral connotation than anything else I can think of.)

Why not just do it all?

To explain why, I need to take a detour. As you may know, I’m not a proponent of a government takeover of the healthcare industry (though my resolve against it has really subsided lately). My case against full-on single-payer is pretty much utilitarian—costs versus benefits.

The “costs” part of the equation isn’t super interesting. To summarize, they are enormous. The 2016 Sanders campaign offered by far the rosiest projection, putting the cost at $13.8 trillion over ten years. Most other projections are near $30 trillion over the same period—so about $3 trillion a year, or 85% of 2019 federal revenue.

Meanwhile, the benefits—in terms of objective measures of physical health—are really uncertain! I think people take it for granted that healthcare makes people healthier, but that’s actually not super clear. A high-powered experiment on this—often referred to as the “Oregon Medicaid Experiment“—was conducted in 2008. The state used a lottery system to enroll low-income, uninsured adults in Medicaid. It also selected a control group from the same population that was not enrolled so their outcomes could be compared.

The study found that Medicaid enrollment “had no statistically significant effects on blood pressure, cholesterol, or cardiovascular risk.” It did, however, produce a marked drop in depression, about 30% relative to the control group. This is why some have derided Medicaid as a “7-trillion-dollar anti-depression program.”

Medicaid enrollment did increase healthcare utilization substantially. But is this good if it’s not paired with better health outcomes? There is a widespread belief among doctors that Americans are already over-consuming healthcare. A recent survey of over 2,000 physicians found two-thirds believed at least 15 to 30 percent of medical care was unnecessary. Likewise, doctors have observed that most patients seem to be doing “just fine” despite abstaining from visiting the doctor during the current pandemic.

So to summarize my view, single-payer healthcare will cost a lot and might not do too much for us health-wise—it might even have negative effects on healthcare delivery. Its good effects can be replicated in more direct, cheaper ways. (E.g., if people are suffering from depression because they’re stressed due to finances, just give them money.) And while the healthcare system is in obvious need of reform, I’d like to see us at least try a market-oriented approach (such as forcing hospitals to be transparent about pricing) before we do something we definitely won’t be able to undo.

There are other justifications for single-payer healthcare that are harder to refute, moral arguments and the like. But this is the lens through which I personally think about it.

Why are vaccines different?

Vaccines, however, are—forgive me—immune to some of these problems. For starters, vaccines are wildly effective when compared to other types of medicine. Vaccination allowed for the global eradication of smallpox and may soon lead to the elimination of polio. In the case of other diseases like rubella, measles, and diphtheria, the United States has achieved a near 100% reduction in cases (and deaths) following the development of vaccines.

We have much less success with chronic diseases, which also happen to be responsible for the largest chunk of healthcare spending. There are probably lots of reasons for this. One is that patients simply aren’t great about adhering to long-term pharmacotherapy regiments. Approximately 50% of patients do not take their medications as prescribed, to which the Center for Disease Control and Prevention (CDC) attributes 125,000 annual deaths and 30 to 50 percent of chronic disease treatment failures. Additionally, risky behaviors—sedentarism, poor nutrition, and smoking, for example—contribute to the exacerbation of these illnesses, making treatment a more complicated process that can involve a big commitment on the part of the patient. Obviously, none of this is a problem with vaccines.

Second, vaccines are pretty cheap, especially considering their efficacy. The 100 million doses of Coronavirus vaccine the federal government has ordered will cost $1.95 billion, an average of about $20 per dose.

As advocates for single-payer like to point out, governments are often able to secure more favorable prices for medications than private sector buyers. This is true with vaccines as well, and I assume it could be more so the case under a truly monopsonic regime. (A more rigorous consideration would have to weigh this benefit against the potential drag on innovation, which is worth thinking about. Perhaps the libertarian-socialist idea of issuing government prizes in lieu of patents could obviate this concern!)

Public versus private health consumption

Another good rationale for free-to-consumer vaccines concerns public health. There are efforts from single-payer advocates to construe all health as a public good. Sometimes this is quite a reach, but in the case of vaccines, it makes a lot of sense.

As more people are vaccinated against a disease, it reduces the disease’s ability to spread and reproduce itself. This has the second-order effect of providing some protection for people who can’t get vaccinated: very young infants, people with severe allergies, or those with compromised immune systems. To a much greater extent than other kinds of health care, then, vaccines have public health benefits in a way that doesn’t require contrivance by moral argument.

The United States already has a national vaccine program that’s been quite successful. In 1994, the CDC established the Vaccines For Children program (VFC), which pays to vaccinate children who meet certain criteria. Currently, the program provides vaccines for about half of all Americans under 18. We should just expand it to cover everyone.

For the cohort born between 1994 and 2013, the CDC has estimated routine childhood immunization will prevent 322 million illnesses and 21 million hospitalizations over the course of their lifetimes, and avert 732,000 premature deaths. In financial terms, the returns on the program have been equally impressive. Again, from the CDC: “Vaccination will potentially avert $402 billion in direct costs and $1.5 trillion in societal costs because of illnesses prevented in these birth cohorts. After accounting for $107 billion and $121 billion in direct and societal costs of routine childhood immunization, respectively, the net present values (net savings) of routine childhood immunization from the payers’ and societal perspectives were $295 billion and $1.38 trillion, respectively.”

With the Democrats officially leaving Medicare for All off their 2020 platform, the debate over systemic health care reform may rage on for some time. In the meantime, perhaps, given their impressive track record, free-to-consumer vaccines are something we can all get behind.

  1. Scare quotes because whatever you may call the current healthcare system, it’s hardly a project of market fundamentalism.

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