PROVIDENCE – Many people may not know this, but Rhode Island’s vaccine program for children managed by the R.I. Department of Health is actually a cost-effective, single-payer plan.

A while back, ConvergenceRI cited the former R.I. Health Insurance Commissioner Christopher F. Koller, who pointed out that Rhode Island was an early adopter in the 1990s of this small, innovative “single-payer system” for childhood immunizations.

It is the kind of proven, evidence-based health intervention that has yielded enormous benefits: high rates of coverage that prevent transmission of measles, influenza and other infectious epidemics that can only be stopped by maintaining what’s known as “high herd” immunity. [See link below to a ConvergenceRI story about the R.I. Department of Health’s recent intervention in response to an outbreak of meningitis at Providence College.]

Yes, I know, it is hard to believe, but Rhode Island’s universal immunization program [we pay for any vaccine approved by the Advisory Committee for Immunization Practice at the Centers for Disease Control and Prevention] has purchased and distributed vaccines for all children in Rhode Island for the last 20 years.

This is how Rhode Island achieves its top ranking for childhood vaccination in the U.S.

Saving $5 million a year
Using funds from the federal government, which is supplemented by a tariff on insurance premiums, the program has been able to save about $5 million a year purchasing all vaccines at prices negotiated with vaccine manufacturers through competitive bidding managed by the CDC.

Imagine, for instance, what we could save through this implementing approach for Medicare Part D medications.

That is the good news; the not so good news is that this nationally recognized approach to prevent vaccine preventable diseases may not last much longer.

In January of 2016, a new law will take effect. It was introduced at the request of Blue Cross & Blue Shield of RI and enacted during the last legislative session. The new law will spread the cost of vaccine purchase and distribution system over all insurers who sell health insurance defined the way the Affordable Care Act does. No longer will there be a large group of self-insured policies who were exempted from this state mandate.

In the tradition of full transparency and disclosure, before I tell you more about how Rhode Island has been paying for all its vaccines for children and some vaccines for all adults, I need to tell you that I believe that vaccines are the most important health innovation of the last 200 years. 

I cannot think of any other technology that has done more to prevent disease, disability and premature death.

I feel so strongly about this that when I encountered parents who questioned the importance of vaccination, I had to tell them to find another pediatrician. I hope I did it in a way that provoked some thought about changing their minds, but even short of that, I felt I could not be the best I could for their child without their trust to vaccinate according to the advice of medical experts at the Centers for Disease Control and Prevention.

I also need to tell you that Rhode Island has consistently been at the top of the list of states for vaccine coverage. Not only do we have an effective program, we are purchasing, distributing and safeguarding vaccines in a way that has been saving all of us taxpayers millions of dollars every year.

If you have children and go to a medical office in Rhode Island, you will never be billed for the biological vaccines required by law for school entry.

You will see only a charge for the administration of the vaccines, covering the cost of syringes, nursing time, etc.

Even if you bring your child to a provider in Rhode Island who does not participate [I do not know for sure how many there might be; I never knew of any while working at the R.I. Department of Health], the doctors will not be reimbursed by Rhode Island insurers for the cost of the vaccine.

Last time I did the math, Rhode Island was saving about $5 million annually for each birth cohort entering the program.

Rhode Island stands alone
Rhode Island alone persists with this program’s financing model.

In order to spread the cost over as many “covered lives” as possible, the new legislation put forward by Blue Cross, which serves as a third-party administrator for the bulk of self-insured plans in Rhode Island, will make two types of changes: who pays into the assessment; and how the cost to each plan will be calculated. 

Along with all licensed health insurers who do business in the state, entities that administer self-funded plans (third-party administrators) will also be required to pay to cover the vaccine cost for self-insured firms.

Instead of paying a percentage of their policy premiums under the formula that is currently in place, beginning July 1, the amount paid to cover the assessment for vaccines will be based on the number of contribution enrollees for both children and adults. 

Here's how it will work: the immunization program will develop a budget to determine how much is needed to cover the cost of all child and adult vaccines for insured population and the operation of the program. Then, the total number of contribution enrollees will be divided by that budget number, to produce the cost per contribution enrollee. This cost will then be applied across the board.

Thanks to Blue Cross, we have an equitable formula for continuing this universal purchasing and distribution system. The question remaining, and it's a big one, is this: what happens in 2018 when the feds have the option to discontinue its reimbursement to Rhode Island for the cost of state-mandated benefits included in health insurance products qualified under the Affordable Care Act?

Dr. Peter Simon is a pediatrician who retired from the R.I. Department of Health in 2013. He still sees pediatric patients at a number of clinics.