Catalyst for Payment Reform

‘Tis the Season For A Teachable Moment (on Price Variation)

‘Tis the Season For A Teachable Moment (on Price Variation)

Ryan Olmstead, Director of Member Services, on why flu season is a teachable moment in high-value health care purchasing.

Ryan OlmsteadIt’s that time of year: flu season. While it’s easily everyone’s least favorite season, unfortunately, it’s only just gotten started.  The stakes for flu season are even higher in 2020 due to the novel coronavirus.  Getting the flu vaccine this year will not only reduce your risk from flu, but it will also help conserve potentially scarce health care resources.  With COVID-19 cases and hospitalizations rising dramatically across the country, I cannot emphasize this second benefit enough.

According to the CDC, 51.8% of Americans age 6 months or older received the flu vaccine during the 2019-2020 flu season; yet, the CDC recommends all individuals in this age range get the vaccine, with limited exceptions.  Consumers regularly get the vaccine as part of a primary care visit or at their local pharmacy.  In prior years, employers would offer their employees, and sometimes dependents, the added convenience of getting their flu vaccine on-site.  This year, however, many employers have limited or eliminated any widescale effort to offer on-site flu vaccines.  This means that some consumers will have to seek out their vaccine elsewhere.  So, what’s the appropriate site of care for the flu vaccine?

The PCP or the pharmacy?

My partner and I each sought out the flu vaccine in October.  One of us visited the laboratory at our primary care provider (PCP) and the other visited a national pharmacy chain near our home.  The allowed amounts paid by each of our health plans differed by fivefold – $166.40 at the PCP’s office laboratory compared to $32.00 at the pharmacy, and breaks down as follows:

  • CPT code 90471 applied to the administration of the vaccine. The allowed amount was $86.40 at the PCP’s office laboratory compared to $15.00 at the pharmacy.
  • CPT code 90686 applied to the vaccine itself. The allowed amount was $80.00 for the PCP’s office laboratory compared to $17.00 at the pharmacy.

While we were both able to access the vaccine conveniently and in a timely manner, the pharmacy ended up having a shorter wait time.  We both received satisfactory care.

A Teachable Moment on Price Variation

Sure, the case above is just an n of 1, and the price of the flu vaccine is low compared to other services. In addition, consumers are largely shielded from the price of their flu vaccine because the Affordable Care Act includes it with the preventive care benefits covered with zero out-of-pocket costs.  So, is it worth it for benefits staff to analyze flu vaccine price data and direct their employees and dependents to less expensive sites?

I would argue that yes, there’s an opportunity here.  I know benefit managers are always looking for opportunities to help plan participants become smarter health care consumers.  I encourage benefit managers to see this as a teachable moment that can help consumers understand how unchecked price variation is driving up health care costs.

Most Americans get the flu vaccine, so plan participants should be familiar with what it entails.  But it’s likely that many consumers don’t realize a common procedure like this can vary in price depending on the site of service.  If benefit managers are successful in bridging this knowledge gap, they will have a more receptive audience when directing their plan members to the appropriate site of care for less common, pricier services.

Have you analyzed flu shot price and utilization data?  If so, what were the findings?  Does this blog make you want to analyze it?  Let us know!

Photo by CDC on Unsplash.

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