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Simple Vaccine Offers Big Payoff

By: John Aylen

Employers faced with the challenge of keeping employees on the job may be over-looking a relatively inexpensive preventive measure. Flu vaccines help their employees avoid the illness and, by also vaccinating their children, absences to care for ailing children can be reduced, says John Aylen, a Montreal author who writes extensively about the pharmaceutical industry.

Consider the following scenario: There is a 95 per cent chance your pre-school or school-age child is going to contract a disease. The cost of that disease to you, your employer, and to the healthcare system is going to be more than $350. Do you give your child a $60 vaccine to prevent that disease, chickenpox in this case, from ever occurring?

Quality of life, pain, and suffering – even rare life-threatening complications – aside, most of us would answer “yes” without hesitation.

As Barbara Law et. al. write in the peerreviewed journal Pediatrics, “Chickenpox is one of the last common communicable diseases still prevalent in Canada. [….] Because of the high incidence of the disease, uncomplicated chickenpox has a considerable economic impact on Canadian society.”

A vaccine that prevents chickenpox exists and is available in Canada today. The economic benefit has been established. No one disputes the health benefit. Yet the vaccine still figures on only a minority of employee health insurance programs.


The answer has little to do with a willful act to exclude a useful medication. Rather, exclusion of the chickenpox vaccine and others from private health plans has much more to do with history and our attitude toward vaccines themselves.

Tended To Overlook

Traditionally, vaccines have been covered by provincial governments, and continue to be. As a result, we have tended to overlook vaccines and to take their benefits to private health plans for granted. Plan managers are not necessarily aware of the economic benefits to their organizations for including vaccines because, until now, they have not had to consider them. New vaccines – such as those for the prevention of chickenpox and meningococcal meningitis – have become available in Canada in recent years and have created a need to understand vaccines.

The good news is awareness of the need for and benefits of vaccines is growing.

Chris Usaty, manager of clinical programs and formulary management at ESI, a Mississauga-based health claim management company, says companies like ESI and their insurer customers are beginning to review and classify existing vaccines. “This means insurers and employers are doing the necessary groundwork to ensure that their vaccine coverage is consistent with the philosophy of their benefit program.”

There is a three-tier hierarchy of disease treatment in medicine. You can control the symptoms of disease when it occurs. Better still, you can cure disease when it occurs. Best of all, you can prevent disease from happening. It’s obvious that preventing disease from occurring in the first place has the most benefit, both to the patient and to the employer.

Most vaccines prevent disease. Yet, it is their very nature as preventatives that allows us the luxury of overlooking them. Smallpox has been eradicated from the list of killer diseases of the world thanks to vaccination and polio is on the verge of elimination. Chickenpox, some forms of hepatitis, measles, mumps, and German measles are now preventable diseases, thanks to vaccines. Vaccines, in fact, have been responsible for a high proportion of the major advances in health in the last century and they are undoubtedly one of the keys to an improved standard of living and health in the future. Yet because they are preventative, and we don’t think about things that aren’t happening, vaccines are too easily overlooked by those who pay for healthcare.

That’s largely because when vaccines work, nothing happens. There is no smallpox and polio outbreak. Measles, mumps, and rubella cases fail to present themselves. There are no whooping cough, hepatitis, diphtheria, or meningitis outbreaks.

And that is part of the problem. As we have become accustomed to not seeing cases of polio or measles, we have forgotten the importance of vaccines. Yet this forgetfulness causes unnecessary pain and suffering, unnecessary strain on the healthcare system, and unnecessary costs to the system and to employers.

Chickenpox provides a good case in point. There are nearly 350,000 cases of chickenpox in Canada a year. Most of them are uncomplicated cases. The total cost of these cases to Canadian society is estimated at $122.4 million a year. Cost to the patient or the family represents $98.4 million; the healthcare system pays out some $24 million. The average cost per case in $353. Direct medical costs account for $67 per case which, if that were the only cost, would rationalize coverage of the vaccine for children when compared to the $60 wholesale cost of the vaccine.

Greater Cost

But by far the greater cost comes from lost productivity. Seventy per cent of the cost in the average case of chickenpox is due to caregiver productivity loss – in other words, the time the caregiver, usually a father or mother, has to take off from work. In uncomplicated cases, this has been established at 3.4 days for day-care age children and 1.6 days for school age children. For a complicated case, time off work has been estimated at eight days or more (Source: Law, Barbara et al. ‘Cost of Chickenpox in Canada,’ Pediatrics V.104, No 1, July 1999.)

Who pays for this? The employer or the employee, most of the time.

U.S. studies into the cost benefit of vaccination programs support the conclusions of the Canadian experience with chickenpox. For every dollar spent on vaccines in the U.S., the savings to society are staggering for most common vaccines. The 1998 Information Summary for the 32nd Annual National Immunization Conference says for every U.S. dollar spent on vaccines, the savings, in direct and indirect costs, are:

The toll of vaccine neglect, for example, has been estimated at between 500 and 1,500 deaths a year in the case of influenza in Canada. Whether the lower or the higher figure is used, that’s significantly more people than we lose in Canada a year to AIDS or murder, says the Health Canada Statistics 1997: HIV and AIDS in Canada, Surveillance Report, June 30, 2000.

Which vaccines get covered by provincial drug programs varies from province to province. Governments continue to pay for routine vaccines such as measles, mumps, rubella, haemophilus influenza type B, hepatitis B, diphtheria, tetanus, pertussis, and polio. They favour coverage for new vaccines as well. In 2001, for example, the province of Quebec funded a mass immunization effort against meningococcal meningitis. PEI and Alberta routinely immunize against chickenpox. But provincial governments are typically slow to cover new vaccines since they must go through a lengthy political process to secure funding. So even though new vaccines, such as chickenpox, may be recommended by Health Canada, the National Advisory Committee on Immunizations, and the Canadian Pediatric Society, the length of government process means that some new vaccines may not be available right away through the provincial governments.

Crucial Role

That’s where employers and private insurers have a crucial role to play, in the transition time between the introduction of newer vaccines and the time those vaccines become covered by provincial programs. It is during this period, which may last several years, where private plan sponsors and their employees can benefit from vaccine coverage. Vaccine coverage may reduce absenteeism and prevent employees from contracting diseases at home and abroad. Plan managers should be reviewing policies for vaccine coverage and insurers should be looking at providing this benefit to the insured as good business, as good corporate responsibility, and as cost-effective disease prevention.

“Vaccines have been proven effective in preventing common illnesses,” Usaty says. “Health and wellness programs focused on prevention are more and more prevalent. As well, research into vaccines for diseases such as AIDS and Alzheimer’s and changes to prescription status for most vaccines, other than some routine childhood immunization programs, give rise to the need for study and discussion.”

How private insurers view vaccines is crucial to cost-effective healthcare in the future. What we have considered vaccine-preventable diseases is changing.

The future may hold the potential for vaccines to prevent cardiovascular disease, cancer, and degenerative neurological diseases. More than 180 potential vaccines are in clinical trials today, vaccines aimed at preventing everything from the HIV/AIDS virus to infant diarrhea and dehydration, from the human papilloma virus that leads to cervical cancer to postherpetic neuralgia and shingles. The future of vaccines and our ability to treat, care, and prevent disease has never been better. Employers and their insurers need to take a close look at their group insurance programs and to analyze the benefit that vaccines may offer. A solid understanding of vaccines today benefits employers and employees in the short- and the long-term.

John Aylen is a Montreal author and writer who received a grant from Merck Frosst for the preparation of this article. The opinions expressed herein are those of the author and do not necessarily represent the views and opinions of Merck Frosst.

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