Blacksburg, Va., Dec. 17, 1998 - A pilot study for the Centers for Disease Control and Prevention (CDC) could help vaccine purchasers make some tough decisions and save millions of dollars in health care costs, according to the lead article to be published in a health care journal in January.
The study is part of an effort to maintain high childhood immunization rates despite an increasingly demanding Childhood Immunization Schedule, with requirements that leave many children missing inoculations and facing health risks that multiply medical costs. The pilot weighs the economic value of combining vaccines to reduce the number of injections or clinical visits.
The article's author, Sheldon H. Jacobson of Virginia Tech, and his co-writers focus on a potentially costly part of the immunization system: purchasing vaccines. The pilot study looked at vaccines for five potentially serious children's diseases: Hepatitis B, Haemophilus Influenza Type b, diphtheria, tetanus, and pertussis, known to parents as whooping cough. They created an "integer programming model" - a mathematical model - that more efficiently compares prices and manufacturers of vaccines.
The authors developed an algorithm that would permit adding the larger number of vaccines that are expected in the future.
The pilot is unique because it brings a practical set of operations research (OR) tools to vaccine selection and procurement. It grew out of a chance encounter between Jacobson and a CDC representative at a national meeting of the Institute for Operations Research and Management Sciences (INFORMS) two years ago. Jacobson is a member of INFORMS.
Vaccines being wasted
Jacobson notes that with new vaccine brands and types rapidly being introduced, often with differing features and in combinations with overlapping but non-identical components, it becomes impossible for vaccine purchasers to select the most efficient inventory to minimize costs.
"State health departments, HMOs, and other large vaccine purchasers are facing daunting decisions because of the surfeit of choices becoming available," he says. "I think the CDC realized that developing sophisticated but user-friendly tools for helping make such decisions would be a valuable service to its constituents in the immunization community. OR offers the analytical tools to help them make their decisions, using cost minimization as the underlying objective."
Mathematical Model
Reducing expense in the vaccination process is tied to trimming several costs: the price of multiple visits to doctors or clinics to receive inoculations, the price of the vaccine itself, the cost of storing extra vaccines that are eventually discarded, and the cost associated with medical staff. To demonstrate the model, the CDC estimated that the expense of each visit was $40, each injection was $15, and medical staff time for mixing vaccines was 50 cents per minute.
Solving the "procurement and delivery problem" required the development of a model to determine the most economically sound package of existing vaccine types (single-disease and in combinations) and manufacturer brand that should be procured and the months in which these vaccines should be delivered (administered) in order to satisfy the existing Recommended Childhood Immunization Schedule, as well as to cope with a number of constraints.
The pilot focused on four vaccine manufacturers that produced 11 different vaccine types (eight individual vaccines and three combinations). It looked at two cases of when one of the vaccines, Hepatitis B, would be delivered: Case 1: shortly after birth, most likely in the hospital after delivery; and, Case 2: in the second month of life, for example at a clinic during a child's first set of vaccines. The model is run to compare four optimization goals: (1) minimum total cost; (2) next lowest total cost; (3) maximum total cost; and (4) minimum total cost with all manufacturers represented.
Among the study's findings was that in Case 1, the difference between the minimum cost solution and the next lowest cost solution was $1.41. Therefore, by identifying and purchasing the more economical vaccine that will be distributed to millions of children, the health system could potentially save millions of dollars.
The researchers examined a potential industrial policy to keep all four current vaccine manufacturers in the loop, and thus perhaps avoid further consolidation in the industry with resultant higher prices. They found such a policy would raise overall costs about $13 per child compared to not guaranteeing all manufacturers at least some share of the market.
The study, "An Integer Programming Model for Vaccine Procurement and Delivery for Childhood Immunization: A Pilot Study," was written by Jacobson of Virginia Tech, Edward C. Sewell of Southern Illinois University at Edwardsville, and Drs. Robert Deuson and Bruce G. Weniger of the CDC. It will appear as the lead article in the January, 1999 edition of Health Care Management Science, published by Baltzer Science Publishers.
The Institute for Operations Research and the Management Sciences (INFORMSR) is an international scientific society with 12,000 members, including Nobel Prize laureates, dedicated to applying scientific methods to help improve decision-making, management, and operations. Members of INFORMS work in business, government, and academia. They are represented in fields as diverse as airlines, health care, law enforcement, the military, the stock market, and telecommunications.
PR Contacts:
Lynn Nystrom, News Director,
Virginia Tech's College of Engineering,
(540) 231 4371; tansy@vt.edu
or Elizabeth Crumbley, PR Coordinator, (540) 231-9772, lcrumb@vt.edu
For additional information:
Sheldon Jacobson, Associate Professor, Industrial and Systems Engineering,
(540) 231 7099; jacobson@vt.edu
Journal
Health Care Management Science