Cost has not been the primary concern in the multibillion-dollar effort to vaccinate the country against COVID-19 and end the yearlong pandemic, but somebody still has to pay for it.
Who's paying and how much isn't so clear cut.
The U.S. government is spending upward of $10 billion to purchase and distribute the vaccine in Michigan and across the county. Officials have pledged to make it free for everyone. While the federal government is footing the bill for the vaccine doses and delivery, moving them from the backs of trucks and into the arms of people is a heavy lift.
At Michigan Medicine, doctors, nurses and staff worked nonstop through the holidays to give shots at the hospital and Michigan Stadium, said Stan Kent, chief pharmacy officer for the Ann Arbor-based health system. But planning for the administration of the vaccine started long before the first dose was delivered Dec. 14.
A task force of 80-100 people met several times a week to develop a vaccination plan, Kent said. The uncertainty of how many vaccines would be shipped made for a staffing headache initially, but the hospital eventually hit a stride. Around 55,000 vaccines have so far been administered by Michigan Medicine.
"The major cost was peoples' time and that time being taken away from our day jobs," Kent said. "So it was very demanding from November, December, January. Those three months, most of us worked every single day."
The situation was similar for health systems across the state, as well as for drug manufacturers and delivery companies — a mad dash to move the vaccine. As the process becomes more fluid, and dust settles on the initial roll-out, those involved are beginning to assess the cost of ending a pandemic.
The short answer is U.S. taxpayers. The federal government has committed more than $10 billion to produce and distribute vaccines.
The government signed a deal with Pfizer Inc. and BioNTech to purchase up to 500 million doses of the vaccine. The agreement says the government will pay the companies $1.95 billion upon receipt of the first 100 million doses. That's $19.50 per dose. Last week, the government purchased 100 million more vaccines from Moderna Inc., bringing its order commitment to 300 million, the company announced Thursday. The government paid $1.5 billion for 100 million doses in August.
"Pfizer's COVID-19 vaccine development and manufacturing costs have been entirely self-funded," the company said in an emailed statement. "We invested about $2 billion at risk and are prepared to continue bearing the costs of all development and manufacturing in an effort to help find a solution to this pandemic. We decided to self-fund our efforts so we could move as fast as possible."
Pfizer is making the vaccine at its Kalamazoo area facilities.
Those administering shots — hospitals, clinics, pharmacies, etc. — are not allowed to charge recipients, which means no copays, deductibles, coinsurance or any other out-of-pocket costs.
"However, vaccination providers can charge an administration fee for giving someone the shot," according to the Centers for Disease Control and Prevention, but no one can be denied the vaccine because of an inability to pay that fee.
"Vaccination providers can be reimbursed for this by the patient's public or private insurance company or, for uninsured patients, by the Health Resources and Services Administration's Provider Relief Fund," according to the CDC.The $178 billion federal relief fund was created to aid hospitals and health care providers in the coronavirus response.
Henry Ford Health System does not charge any fees to receive the vaccine, John Gillespie, director of news content and media relations for the hospital, said in an email.
"We do bill insurance companies for covered costs but patients are not billed for copays," he said. "Henry Ford Health System will be tracking these costs over time as vaccine supplies become more available and more people become eligible to be vaccinated."
Right now, they say they are losing — a lot. As Kent at Michigan Medicine said, staffing dozens of people to give 1,000-plus shots, 12 hours a day, is a major drag on resources. In the case of COVID-19, a busy hospital isn't necessarily good for business. That's a lesson learned in the early days of the pandemic, when hospitals were forced to stop nonessential procedures, which cut off big revenue generators such as elective surgeries.
"At present, health care providers are not reimbursed for many of the costs of administering the vaccine," Henry Ford's Gillespie said. "These costs include retrofitting of facilities to accommodate mass vaccinations, and significant labor costs for staff to administer vaccine."
Southfield-based Beaumont Health has incurred about $1.2 million in costs at its three COVID-19 vaccine clinics, COO Carolyn Wilson said in an email. It has capacity to give 50,000 vaccines per week, though it has been hampered by inconsistent supplies of the vaccine.
"As mandated, will not balance bill any individuals for costs not covered by insurance companies, nor bill anyone without insurance coverage," Wilson said.
The federal government is helping to ease financial losses. Health systems in Michigan have collected more than $4.4 billion in COVID-19 relief funding, Crain's reported in June, and they are set for more once Congress passes another relief bill.
For those on Medicare, payment rates for vaccine administration are $16.94 for the initial dose and $28.39 for the final dose, according to the Centers for Medicare & Medicaid Services. The rate is $28.39 for single-dose vaccines, paid for by the federal government with tax dollars.
"These rates recognize the costs involved in administering the vaccine, including the additional resources involved with required public health reporting, conducting important outreach and patient education, and spending additional time with patients answering any questions they may have about the vaccine," according to the agency.
The Centers for Medicare & Medicaid Services has advised private insurers and health care providers to follow the reimbursement rates established by Medicare.
Beaumont's billing department follows that guidance, filing reimbursements based on the Medicare fee schedule, according to a spokesman for the hospital.
Blue Cross Blue Shield of Michigan spokeswoman Helen Stojic said the company needs to see more data before it can publicly predict costs.
"There has not been a significant number of vaccine claims yet, so we do not have vaccine cost numbers or predictions to share at this time," Stojic said in an email. "We are encouraged by the promise the vaccine holds to lessen the enormous strain on the health care system, avoid illness and death and bring an end to the pandemic."
Like its coronavirus testing program, the city of Detroit established an aggressive COVID-19 vaccination program.
"I did not wait to figure out the bureaucracy," Mayor Mike Duggan said during a news conference Thursday. "I was confident we would get reimbursed at some point."
The total dollar amount has not been tallied, but costs keep piling up for a city whose financial health has been badly damaged by the pandemic. Between renting the TCF Center garage for $45,000 per month, and diverting resources from health, planning and various other departments, the vaccination roll-out alone has been costly.
The Federal Emergency Management Agency said it would reimburse Detroit about $18 million to cover the city's coronavirus-related costs including money spent on administering vaccines, the Associated Press reported Friday.
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