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OCR for page 15
Building the immunization Infrasiruelure
he next session of the workshop featured speakers representing per-
spectives from state and local health departments in different areas
of the United States. These speakers highlighted concerns about ex-
isting problems in the immunization infrastructure and the impact of the
Institute of Medicine (IOM) report on future finance strategies to support
the immunization system. The speakers included Donald Williamson,
director of the Alabama Department of Public Health; Natalie Smith, di-
rector of the Immunization Program for the state of California; Dianne
White Delisi, state legislator from the Texas State House of Representa-
tives; and Jonathan Fielding, director of the Los Angeles County Health
Department.
STATE PERSPECTIVES
Dr. Williamson observed that "the IOM report could not have come
at a worst time" in terms of the impact of recent downturns of the national
economy on state health budgets. According to a recent report of the
National Association of State Budget Officers, more than 50 percent of
states are experiencing severe financial problems in the form of Medicaid
increases and revenue shortfalls. This difficult fiscal environment dis-
courages additional state investments in immunization programs and re-
sults in cuts in many important areas, including registries and outreach
programs, reminder/recall efforts, and immunization linkages with
Women, Infants, and Children (WIC) nutritional programs. In addition,
15
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6
SETTING THE COURSE
the suggestion in the IOM report that the Centers for Disease Control and
Prevention (CDC) develop a federal formula grant for support of an infra-
structure program may serve as a disincentive that causes states to reduce
their support because of a perception that a formula would require a
"lock-in" by states at their current funding levels.
On a more positive note, Dr. Williamson observed that the IOM re-
port successfully drew national attention to the problems of immuniza-
tion infrastructure, and legislative champions emerged to support the
recommendations in budget negotiations. The IOM recommendations
were consistent with a 1999 report by the National Vaccine Advisory
Committee, which called for a $200 million annual budget for the state
infrastructure program. At the state level, the IOM report provided a
vehicle for conversations about the complexity of immunization infra-
structure and provided an important rationale to support state advocacy
efforts for increases in public health budgets. The IOM report also stimu-
lated more attention to the absence of resources to support efforts to
achieve higher levels of immunization among adults. Dr. Williamson in-
dicated that the Association of State and Territorial Health Officials had
received some anecdotal reports about a few states increasing their vac-
cine purchase budgets, but such efforts tend to occur among states that
already have sizable investments in immunization. He commended CDC
on the improvements in the draft guidance efforts for Section 317 awards.
Despite these gains, Dr. Williamson observed that several outstand-
ing issues still require attention. The creation of the new State Children's
Health Insurance Plan (SCHIP) program, for example, has shifted the
vaccine delivery systems for certain populations from a federal entitle-
ment to a health benefit that is supported in part by state budgets and is
subject to change based on SCHIP eligibility requirements. A number of
private health plans also do not offer full coverage for all recommended
vaccines, creating further fragmentation in the immunization system. The
introduction of higher priced vaccines, such as the new infant pneumo-
coccal conjugate vaccine, is creating a two-tiered vaccine delivery system
in some states. Certain populations are eligible for state-purchased vac-
cines if they meet key criteria, while others who have minimal health care
insurance (such as indemnity plans) must pay for vaccine if it is not cov-
ered in their health benefits. One particularly grave concern within the
states is the impact of recent vaccine shortages on school entry require-
ments. The modification of the immunization schedule in some jurisdic-
tions will result in students moving through the health care system with-
out the recommended vaccines. This situation can prolong their period of
exposure to vaccine-preventable disease. These shortages are occurring
during periods of public health cutbacks, further reducing chances for
capturing vulnerable populations in a systematic manner.
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BUILDING THE IMMUNIZATION INFRASTRUCTURE
17
Natalie Smith, director of the Immunization Branch of the California
Department of Health Services, presented highlights from recent immu-
nization data analyses. Data from the National Immunization Survey in-
dicate that California has maintained a 5-year (1996-2000) average level
of 75 percent immunization coverage in the 4:3:1:3 schedule for 2 year
olds. In addition, a rapid uptake of the varicella vaccine has occurred in
California, rising from 26 percent coverage in 1996-1997 to 76 percent in
2000. Hepatitis B immunization levels among seventh-grade students
have also increased during this same period, from 15.8 percent in 1998 to
73.4 percent in 2001. Significant gains also have occurred in the annual flu
and "ever" pneumococcal rates among adults, from 54 percent and 35
percent coverage in 1993 for influenza and pneumococcal, respectively, to
70 percent and 61 percent, respectively, in 2000.
Despite these positive trends, several worrisome trends persist. A
recent state health budget cut has eliminated support for the infant pneu-
mococcal conjugate program. The costs of flu vaccine contracts in Califor-
nia have increased significantly, rising from $1.625 per dose in 1999 to
$4.488 per dose in 2001. The new SCHIP program in California is a stand-
alone entity. Because the children are not enrolled in Medicaid, they are
no longer eligible for the federal entitlement provided through Vaccines
for Children (VFC), and the state has not budgeted funds to purchase
vaccines for the providers.
The increasing scope and complexity of the childhood immunization
schedule is particularly troubling. Dr. Smith illustrated how the concep-
tual framework of the IOM report could be adapted to the array of pro-
grams that constitute the immunization system in California. In some
cases, the public health department will supplement federal vaccine pro-
grams with purchases from state revenues (this was done in purchasing
hepatitis A and pneumococcal conjugate vaccine). In other situations, the
state health department will offer immunizations directly to high-risk
populations, as was done with the distribution of flu vaccines to high-risk
persons.
Dr. Smith illustrated the relationship between public health budgets
and communicable disease levels with a graph that compared trends in
federal grant funds for immunization in California with the incidence of
measles cases (Figure 3~. Although infectious disease outbreaks remain
low, the recent decline in the size of federal awards (from a high of $36.5
million in 1996 to $18.3 million in 2001) is troubling. She suggested sev-
eral financial strategies that could help break the disturbing cycle of out-
breaks associated with lowered immunization budgets, including stable
and multi-year funding, targeting some awards to pockets of need, the
extension of VFC coverage to the SCHIP population, a stable vaccine
supply, and an emphasis on immunization across the lifespan.
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18
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SETTING THE COURSE
FIGURE 3 Measles incidence per 100,000 population compared to available fed-
eral grant funds (S in millions), California, 1988-2000.
SOURCE: Natalie Smith, California Department of Health Services, TOM work-
shop, 2002.
Dianne White Delisi, a state legislator from Texas, provided an addi-
tional perspective in addressing the problems of immunization finance
and public support for infrastructure. She observed that political dynam-
ics such as the effects of census figures on redistricting efforts have cre-
ated a sense of flux in many state legislatures throughout the country.
Many new political leaders have emerged who are unfamiliar with public
health concerns and the intricacies of the federal-state financial partner-
ship. The impact of increasing Medicaid expenses resulting from both
increased costs as well as wider enrollment cannot be ignored because
these higher expenses are a key factor in state funding increases for health.
Keeping the rising costs of health care under control also has been cited
among the top public concerns in recent national polls. But the growing
costs of public health insurance programs create pressures to reduce
spending in other areas of health, such as immunization. The recent cases
of anthrax exposure in Washington, DC and elsewhere have called na-
tional attention to the deterioration and gaps in public health infrastruc-
ture in responding to infectious disease outbreaks. But the public is also
concerned about the growing complexity and cost of the immunization
schedule. It is difficult to address the tremendous variation in health plan
benefits for vaccines without considering insurance regulation such as
"first dollar coverage" policies that have been adopted in some states.
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BUILDING THE IMMUNIZATION INFRASTRUCTURE
LOCAL PERSPECTIVES
19
Jonathan Fielding, director of public health for Los Angeles County,
described recent immunization trends in his county that warrant atten-
tion. Federal funds currently support about 70 percent of the county's
budget for immunization services. The remainder is financed through
state revenues (20 percent) and local funds (10 percent). California in
general and Los Angeles County in particular are facing bleak financial
prospects. As a result, overall cuts in public health programs, including
immunization programs, are expected.
Although the county has achieved high rates of immunization cover-
age, occasional outbreaks of vaccine-preventable disease are a persistent
problem. Recent cases of pertussis have been reported, for example. The
public must become reacquainted with the importance of immunization,
and ways must be developed to provide continuing, reliable support for
both vaccine supplies and program activities. Outreach to immigrant and
transient populations is especially important.
Dr. Fielding indicated that the rising costs of the newer vaccines are
troubling, and these increases raise many questions about the extent to
which vaccines are a public or private good. The goal of universal access
to immunization has solid public support, but the increased splintering in
the ways in which immunization services are financed requires attention.
Although states have important roles in this area, they should not be
expected to carry the burden of costs beyond a specified amount. The
federal government is viewed as the primary supplier of vaccines for the
safety net population.
Certain components of the immunization infrastructure also require
federal attention and support. The development of immunization regis-
tries, for example, requires financial assistance if local health departments
are to improve their monitoring and surveillance of key health indicators.
Yet it is difficult for counties to bear these infrastructure costs when they
are also expected to cover safety net services for indigent populations. For
example, a managed care plan in Los Angeles recently announced that it
would not reimburse costs for hepatitis A vaccines for adolescents; the
local health department is expected now to provide that vaccine for the
plan's subscribers.
Finally, Dr. Fielding pointed out that the economics of vaccine fi-
nance require closer attention to how current vaccine prices affect invest-
ments in the production of future vaccines. Concerns about recent vaccine
shortages have called attention to the problems that some companies ex-
perience in sustaining the production of low-cost vaccines when invest-
ments in such products must compete with higher rates of return for
more profitable pharmaceutical products.
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20
SETTING THE COURSE
NATIONAL SURVEY OF STATE-LEVEL IMMUNIZATION
POLICIES, PROGRAMS, AND PRACTICES
In collecting background materials for Calling the Shots, the IOM Com-
mittee on Immunization Finance Policies and Practices commissioned a
national survey of the ways in which states financed immunization poli-
cies, programs, and practices in the 1990s. Gary Freed, Sarah Clark, and
Anne Cowan in the Division of General Pediatrics at the University of
Michigan conducted the survey through a series of structured telephone
interviews with state immunization officials. The results of the survey,
published in the American Journal of Preventive Medicine in October 2000
(Freed et al., 2000), are summarized here to provide additional perspec-
tive on state-level experiences in providing financial support for infra-
structure activities. The survey data provide a deeper understanding of
the rationale behind key decisions at the state level, the major influences
on state immunization program goals and priorities, the effects of federal
policies and fluctuations in federal funding on state programs, and other
factors affecting state immunization efforts in the 1990s. The survey re-
sults focus on three key areas: vaccine purchase, immunization program
infrastructure, and other programs and regulations.
(1) Vaccine Purchase. States use different funding sources to support
their vaccine purchases according to the nature of their immunization
delivery system (see Table 2~. Prior to the creation of the VFC program in
October 1994, most states had one of three systems of immunization de-
livery: public clinics only, Medicaid replacement, or universal purchase
(UP). These efforts could be grouped according to the populations served.
States that had public-clinics-only policies delivered vaccines that were
purchased with federal or state funds only to populations (primarily chil-
dren) who presented for immunizations in local clinics. States that partici-
pated in Medicaid replacement efforts were able to supply private pro-
viders, in addition to their public clinics, with replacement vaccines for
Medicaid-enrolled children. Contributions from state Medicaid agencies
varied considerably, ranging from no contribution to full funding for all
vaccines delivered to Medicaid enrollees. In the universal purchase states,
vaccines were supplied to public clinics and participating private provid-
ers for all children in the state. In the UP states, state revenues provided a
significantly larger proportion of financing for state-supplied vaccines.
Following the implementation of the VFC program, states realigned
their policies and practices. The federal government is now responsible
for supplying vaccines for children in certain populations: the uninsured,
Medicaid eligible, Alaska Native and Native American, and underinsured
children who received vaccines at designated public clinics (federally
qualified health centers). As a result, states expanded their efforts into
programs that can now be grouped within the following categories: VFC
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BUILDING THE IMMUNIZATION INFRASTRUCTURE
TABLE 2 Vaccine Supply Policy, January 2000
21
VFC Onlya Enhanced VFCb Universal Purchaser
Alabama Arizona Alaska
Arkansas District of Columbia Connecticut
California Florida Idaho
Colorado Georgia Maine
Delaware Hawaii Massachusetts
Indiana Illinois Nevada
Iowa Maryland New Hampshire
Kansas Michigan New Mexico
Kentucky Minnesota North Carolina
Louisiana Mississippi North Dakota
Missouri Montana Rhode Island
New Jerseyd Nebraska South Dakota
Ohio New York Vermont
Oregon Oklahoma Washington
Pennsylvania South Carolina Wyoming
Tennessee Texas
Virginia Utah
West Virginia
Wisconsin
Total 19 17 15
aThese states provide publicly purchased vaccine to private health care providers only
for VFC eligibles.
bThese states provide publicly purchased vaccine to all health care providers for both the
VFC and underinsured populations. "Underinsured" is defined as those who have health
insurance that does not include immunizations as a covered benefit.
CA universal state offers all vaccines recommended by the Advisory Committee on Im-
munization Practices to all health care providers to serve all patients, including those who
are fully insured.
dThe VFC program was implemented in the private sector on January 1, 1999.
SOURCE: Institute of Medicine (2000a).
Only, enhanced VFC, and UP. Once again, each system represents differ-
ent approaches and different levels of investment that frequently reflect
variations in the historical public health traditions and resources of each
state. Under VFC-only programs, states rely solely on federal vaccine
purchase funds to supply vaccines to eligible children in public and pri-
vate health settings. These states seek to supply vaccines to all children in
public health clinics (including those not eligible for VFC), and use their
Section 317 funds to provide vaccines for children who do not meet VFC
eligibility criteria. States that fall within the enhanced VFC category make
a greater effort to provide state-supplied vaccines for underinsured chil-
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22
SETTING THE COURSE
dren who receive vaccines from private providers. The states that have
adopted universal purchase practices supply vaccines to public clinics
and participating private providers for all children in the state, as was
done prior to the creation of VFC. Within this category, children's eligibil-
ity for state-supplied vaccine does not differ by their insurance status.
(2) Immunization Program Infrastructure. In response to the measles
epidemics of 1989 and 1990, the federal government appropriated funds
to help states develop Immunization Action Plans to improve their im-
munization rates, especially for children. The 1993 Children's Immuniza-
tion Initiative subsequently increased funding to support infrastructure
investments and allowed states to expand their immunization programs.
The rapid increase in these funding patterns presented several challenges,
however. States had little time to plan multi-year activities and often
received funding late in the fiscal year that needed to be spent before the
end of the year. Federal funds were also distributed through multiple
allocations that made it difficult to assess needs and determine the most
effective use of funds. The states did not have the capacity to make long-
term commitments, and in some cases could not hire full-time or perma-
nent staff because of individual state budgetary or personnel restrictions.
By the mid-199Os, a large amount of "carryover" funds for infrastructure
programs remained in the Section 317 budget, causing Congress to re-
duce the infrastructure budget and decrease the scale of state grants. As a
result, states had diminished resources to implement or complete ex-
panded activities that were initiated a few years earlier.
The vast majority of state infrastructure activities for immunization
are financed through Section 317 funds. Although VFC represents a
broader entitlement program focused on vaccine purchase, only a small
proportion of the VFC funds can be spent on personnel or activities, and
these must be directly related to the administration of VFC vaccine. A few
states have used VFC funds to support some infrastructure efforts fo-
cused on the eligible populations, but these practices are infrequent and
generally require close collaboration between health finance and public
health officers at the state level. While about half the states (25 states)
receive some direct state funding for infrastructure support, only 4 states
are able to finance more than 40 percent of their infrastructure budget
with state revenues. These state-generated funds are typically directed
toward the support of registry development or immunization program
staff. Four states have redirected state funds used for vaccine purchase to
infrastructure support. The remaining states (21) receive no direct state
funding for program infrastructure.
(3) Other Programs and Regulations. The University of Michigan survey
identified a broad range of activities within the states that have significant
impacts on the financing or functioning of immunization programs. These
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BUILDING THE IMMUNIZATION INFRASTRUCTURE
23
other activities include the following: Medicaid program policies and
practices, SCHIP policy and practice, health insurance regulation, WIC
program policies and practices, and school and daycare requirements.
These other areas can directly affect the size of the population served by
VFC, Section 317 vaccines, and state-supported efforts.
In conclusion, Dr. Freed observed that the 1990s expansion of immu-
nization efforts and infrastructure programs within the states depended
greatly on the availability of increased federal funding. Little state fund-
ing was appropriated specifically for immunization delivery infrastruc-
ture during this time, and state legislatures frequently rejected specific
requests for assistance by state immunization programs. As a result, de-
creases in federal immunization budgets (most notably the Section 317
grants) jeopardized the ability of state immunization programs to con-
tinue activities that supported increases in their immunization rates
among disadvantaged populations.
The University of Michigan survey reported that during this same
period of federal cuts, states were expected to continue to follow an exten-
sive blueprint of mandated programs developed by CDC. State immuni-
zation programs expressed frustration about their inability to make
choices among competing priorities during periods of fiscal restraint. A1-
though CDC was consistently viewed as a valuable source of information,
guidance, and technical expertise, the program administration of the state
grants became an increasing source of concern. State survey respondents
indicated that national leadership must include flexibility for the unique
and specific situations that occur across the states and allow greater dis-
cretion in establishing immunization priorities at the state level.
CASE STUDY FINDINGS
In addition to the 50-state survey, the IOM Committee on Immuniza-
tion Finance Policies and Practices commissioned a set of eight case stud-
ies of state and local immunization programs to examine how states in-
corporate federal funds (particularly Section 317 grants) into their local
immunization programs. Individual case study reports are available as
PDFs online (http://books.nap.edu/html/case_studies) and were subse-
quently published in a synthesis article in the American Journal of Preven-
tive Medicine (Fairbrother et al., 2000~. The case studies examined policies
and practices in seven states: Alabama, Maine, Michigan, New lersey,
North Carolina, Texas, and Washington, and one two-county study of
Los Angeles and San Diego in California. The case studies relied on mate-
rials provided through state and federal administrative records; inter-
views with state and local health department officials, including immuni-
zation program directors, Medicaid agency and budget analysts, and CDC
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24
SETTING THE COURSE
public health advisers to the jurisdictions; and secondary sources for back-
ground factors and state-level trends. The synthesis article was distrib-
uted to participants in the March 2003 workshop.
A critical finding of the case study reports is the transformation that
occurred within state and local immunization programs during the l990s.
Fairbrother and colleagues (2000) observe that the shifting role of the
public health clinics was one of the few generalizations that could be
drawn from their study of nine different jurisdictions. This transforma-
tion in the immunization system includes several key components:
· Public-sector clinics are now delivering a decreasing share of im-
. .
mun~zahons.
· "Medical homes" have become more important as the site of deliv-
ery than free-standing immunization services.
· The success of immunization efforts depends on forces that are
beyond the capacity of state immunization programs. These external
forces include the ability of managed care, particularly Medicaid man-
aged care, to ensure timely immunizations.
As a result of these shifting roles, the nature of the immunization
infrastructure supported by Section 317 funds has been transformed from
one that focuses primarily on service delivery to a broader and more
complex set of functions that involves partnerships among public health,
health financing, and other entities in both the public and private sectors.
New activities associated with infrastructure investments include invest-
ments in immunization registries, quality improvement, coordination
with program staff outside public health agencies, and assurance of age-
appropriate immunization throughout the lifespan. The declining levels
of Section 317 budget awards to the states have forced many health de-
partments to make difficult choices between the continuation of older,
mainstream immunization services and newer coordinating and program
outreach efforts at the state and local levels.
The case study authors conclude that immunization programs func-
tion as an organic component of local health care financing and delivery
systems. Although the Section 317 grants traditionally played a vital role
in supporting immunization infrastructure, recent awards are too un-
stable and unpredictable to elicit the strategic planning, programming,
and own-source spending that would be optimal for state and local pro-
grams. Additional support is required for appropriate staffing, inter-
agency collaboration, and the development of clearly articulated author-
ity to guide immunization activities.
Representative terms from entire chapter:
immunization infrastructure
