ARCHIVED - The hidden economic benefits of childhood immunizations in Capital Health Region, Alberta

15 January 2006 - Volume 32 - Number 02

With a growing disease burden and more expensive treatment options, the cost of illness has become a prominent consideration for decision makers, as highlighted in Health Canada's The Economic Burden of Illness in Canada 1998^{Footnote 1} . The authors of that report estimated the Canadian cost of all major disease groups, finding the highest to be heart disease. In 1998, $6.8 billion was spent on its direct medical costs (hospitals, physician services, drugs) out of a total of $83.9 billion spent on all diseases. The cost of infectious diseases, of which some are communicable in nature, ranked fourth lowest, at $909 million.

The hidden economic burden of vaccine preventable diseases

The counting of costs in terms of the amount spent on treatment underestimates the economic importance of infectious diseases. In the past 50 years, a number of childhood vaccines have been introduced and publicly provided in Alberta. As a result, many diseases, once major threats, are now occurring at very low rates or have disappeared entirely in Canada. The diseases against which the Capital Health region, Alberta, currently provides immunizations and the number of reported cases in 2004 are provided in Table 1.

The number of cases averted was estimated from the rate of reported disease just before vaccine introduction, applied to the relevant Capital Health population in 2004, minus the number of reported cases in 2004. Although changes such as improved general hygiene are not accounted for, these estimates provide an order of magnitude of the effects of immunizations.

Table 1. Estimated savings inmedical costs from immunization, Capital Health Region, 2004

*Insufficient information to make cost estimates.

Many of the direct medical costs of the cases averted would have been incurred by the Capital Health region in the form of facility visits and hospitalizations, and by Alberta Health and Wellness in the form of physician billings. These estimates were calculated using an approximation of the treatment cost of each disease, based on published studies and current hospitalization statistics, as follows: diphtheria, cost of one case of hospitalization (case mix group 137, respiratory infections^{Footnote 2} ; pertussis, mid-point between two estimates, $522^{Footnote 3} ; tetanus, 1984 estimate $37,800^{Footnote 4} ; H. influenzae type b, assumed to be equal to a case of hospitalized meningitis (case mix group 0182 ); measles, $3015; mumps, $84^{Footnote 5} ; rubella, $58^{Footnote 5} ; varicella, $113^{Footnote 6 Footnote 7 Footnote 8} ; pneumococcal disease, weighted average of bacteremia and meningitis, $3,110^{Footnote 9}  meningococcal disease, $22,953^{Footnote 10}  and diphtheria, $8,140 (case mix group 137 plus MD fee)^{Footnote 2} .

In addition to these, there are other nonreportable diseases whose incidence may be reduced by immunization. Many communicable diseases have been controlled here but are still transmitted in other parts of the world and, in the absence of universal immunization, would re-emerge in Canada.

The total costs avoided amount to $10.98 million. This figure accounts for costs incurred in the first year of disease as well as subsequent costs for those cases that we estimate would have occurred without vaccine programs. In the absence of universal immunization, the two most costly diseases would have been diphtheria (over $4 million) and pertussis (over $3 million).

The cost of childhood immunizations

The resources required to immunize children include the cost of vaccines (at an estimated bulk quantity discount of 24%^{Footnote 11} ) and the operational costs of the programs. In Capital Health, all routine childhood immunizations are delivered through the public health centres. For a list of vaccines currently provided to the preschool population in Capital Health, of manufacturers, the number of recommended doses according to the Alberta Health and Wellness schedules, and the unit list prices, see Table 2. If all 11,878 children born in the Capital Health region in 2004 had been immunized according to the recommended schedules, the total cost of the immunization program would have been $9.9 million ($7.7 million for the vaccines and $2.1 for service delivery).

Table 2. Current vaccines provided by Capital Health Region, 2004

There is no direct link between disease costs in Table 1 and the immunization costs in Table 2. The health benefits gained through immunization last for many years, and to obtain a true estimate of savings it would be necessary to follow a given cohort far beyond the initial immunization. Nevertheless, these numbers provide a fair approximation of the costs and savings of the program.

The "returns" on investment in immunizations

Despite the high cost of vaccines and their delivery, there is a substantial financial return on immunization programs. These returns vary, depending on the immunization program. Before vaccine programs are introduced they should be scrutinized for their impact on quality of life and survival as well as economic impact. We have not addressed the disease impact in this paper, but it is obviously an important part of any evaluation.

As demonstrated by our analysis, the costs of vaccines alone do not provide a complete picture of the financial impact of immunization programs. Studies on the current economic burden of disease, although important, do not address the potential impact of vaccine preventable diseases. In recent years, investment in public health in Canada has dwindled, partly because the "visible" impact of certain diseases has become less prominent. However, our analysis shows that a more complete examination is required to capture the resource impact of public health activities in its entirety.

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