Managing Vaccine Costs Ensures FPs Can Offer Patients Access to Needed Immunizations

August 04, 2009 03:20 pm Sheri Porter

Family physicians know all too well that providing immunizations to their patients is an expensive service. That's why FPs -- especially those who are running solo and small practices -- need to make sure they have explored every avenue to reduce their immunization costs.

That's the mindset of James Cunnar, M.D., the sole proprietor of DuPage Family Medicine in Naperville, Ill.

"As a small-business owner, I run our numbers pretty consistently to see where we're at and if we are being reimbursed appropriately for these shots," said Cunnar.

He estimates that in his practice, expenses associated with providing immunizations -- including purchasing, storing and administering the vaccine -- run about $60,000 a year. That's nearly 8 percent of his monthly practice expenses.

Cunnar calls the cash outlay "outrageous" but accepts it as part of the cost of running a family medicine practice with a 20 percent pediatric patient panel.

About 18 months ago, however, Cunnar discovered a way to trim at least 3 percent of his vaccine purchasing costs -- or about $1,800 a year -- from his budget. He joined a comprehensive vaccine program called Atlantic Health Partners L.L.C.(

The company, which is based in Farmington, Conn., offers a purchasing program that provides participants with vaccines at lower prices than they would typically get buying directly from vaccine manufacturers or from third-party distributors.

Although there's no cost to join the program, when physicians sign on they agree to abide by the company's purchasing requirements. "We ask that practices first look to use sanofi (pasteur) and Merck," said company CEO Jeff Winokur. That policy changes, however, in the event of product shortages and when physicians purchase sole-source vaccines, such as Wyeth Pharmaceuticals' seven-valent pneumococcal vaccine, Prevnar.

Participating physician practices continue to purchase directly from sanofi pasteur and Merck, but they receive Atlantic's more favorable pricing and purchasing terms.

"The nice part was that our workflow didn't change," said Cunnar.

Physician Tips for Cutting Costs

James Cunnar, M.D., of DuPage Family Medicine in Naperville, Ill., and Bob Holman, office manger for Weigles Hill Family Medicine in Elizabeth, Pa., have several tips for physicians interested in reducing vaccine costs.

  • Order vaccines more often, but in smaller quantities, to avoid waste. "We'd rather run short than be stuck with too much," said Cunnar.
  • Communicate with parents if your supplies are depleted after a run on a pediatric vaccine. "Parents are understanding; they know what these (vaccines) cost. Ask them to come back in a couple of days at no extra charge," said Cunnar.
  • Use an electronic health record to keep track of inventory.
  • Pay your bill on time. "Typically (vaccine distributors) will give you a 2 percent discount," said Holman.
  • Take advantage of promotions and special offers made by manufacturers.
  • Protect your investment. With his large pediatric base, Cunnar has tens of thousands of dollars in vaccine stock sitting in a refrigerator in his office. With that kind of money on the line, he invested in an automatic system that alerts him by cell phone in the event of a power outage.

Under the Atlantic program, physicians receive the negotiated contract price regardless of how many vaccines are ordered. Winokur said participating physicians receive product updates and special promotions, as well as assistance with vaccine inventory management, coding and billing.

Although the company welcomes all physician specialties, Winokur said that from the company's beginnings in 2007, its focus has been family medicine. "From my experience, it's a specialty that's been overlooked by other (buying) programs," said Winokur. The company currently is working with 18 AAFP constituent chapters.

Winokur noted that vaccinations have become a bigger part of family medicine practices lately. "We've seen growth in adult vaccinations," as well as a big increase in the number of recommended -- and, in some cases, required -- adolescent vaccines, he said. So even family physicians who don't treat many children are back in the vaccine market.

That's certainly the case for Bob Holman, office manger for Weigles Hill Family Medicine in Elizabeth, Pa. Holman has watched the medical practice of his business partner and spouse, FP Ingrid Holman, M.D., undergo a demographic shift during the past 20 years. Gone is the practice's large pediatric base; it's been replaced by an influx of geriatric patients.

"We don't use as many of the different kinds of vaccines," said Holman, but he still spends a significant amount on the vaccines he does order. He, too, participates in the Atlantic Health Partners buying group and figures he's saved $1,000 in two years' time.

"The only way you can keep your nose above the water in primary care these days is to look at your costs, and if you can save money anywhere in the operation of your practice, that's what you've got to do," he said.

Other options physicians can explore include the Vaccines for Children program, an initiative that provides children through 18 years of age with vaccines in their medical homes via private providers and other sources. To qualify, children must be eligible for Medicaid, uninsured, an American Indian or Alaska Native, or underinsured.

In addition, FPs can take advantage of the free expertise offered by Kelson Physician Partners Inc., a vaccine savings program based in Aurora, Colo. The company offers lower vaccine prices through contracts with GlaxoSmithKline and MedImmune, but it also counsels practices on their vaccine-buying habits.

CEO Mark FitzHarris describes his company as a "choice promoter" designed to give physicians all the information they need "so they can make the best decision for their practices."