How to improve your practice's vaccine procurement process

During the early 1990s, our world of medical practice took a drastic turn. Managed care was introduced, and physicians found themselves in the position of having to accept insurance company contracts with significant discount rates. As a pediatric practice, running on a tight budget, it was difficult to imagine how we could function properly under these new financial constraints. Local pediatric practices met and discussed our common problems. Physicians, nurses and managers contributed their “best practice” solutions. From these initial meetings, a community developed, based on cooperative solutions for the common good.

One significant problem practices shared was their inability, to qualify individually for the highest level of vaccine discounts, which were based on quantity. These discounts, extended only to exceptionally large practices, amounted to many dollars per dose. Vaccine purchase was a significant part of our budget at that time, and now for many pediatricians, vaccine cost is their largest expense, exceeding staff payroll.

After negotiating with the vaccine manufacturers, our small community became the first group purchasing organization (GPO) for vaccines. Pediatric Federation LLC was born. Manufacturers recognized our organization as one customer, and we were able to extend the large practice discounts to all participating practices, no matter its individual size. In exchange for these significant discounts, we promised to purchase our vaccine from contracted manufacturers.

Our organization now extends across the country, spread largely by word-of-mouth recommendations. Pediatric Federation follows a three-year bidding schedule, extending bid requests to all vaccine manufacturers. Our advisory board carefully reviews science, pipeline and financials. Bid information is submitted to all participating practices and we vote on which suppliers we use. We cooperate to achieve the greatest discounts, and unspent GPO administrative fees are returned to our participating practices, making for a significant, additional discount to members’ costs. This important benefit of our GPO distinguishes us from similar organizations.

Medical practices once again face astonishing change as we move from fee-for-service to value-based care. Throughout the country, we see practices being acquired by foundations, hospitals and academic systems, as well as small practices consolidating into larger groups. These consolidations are driven in part by the need to gain the necessary size and resources to meet the value-based goals of lowering cost, while improving quality and outcomes, among which are improved immunization and vaccination rates.

Physicians understand the importance of vaccination. Very few medical interventions have had such a positive impact on population health. We must, therefore, use every opportunity to help our patients understand the value of vaccinations, and to have those vaccines available when our patients are due for them. In recent years we have seen a growing emphasis on adult vaccination, with internal medicine, family practitioners, and OBGYNs becoming routine immunizers.

Alan Johnson, MD, FAAP, has been a practicing pediatrician for SF Bay Pediatrics in San Francisco for 40 years. He completed an immunology fellowship from the University of California, San Francisco and is a clinical professor of pediatrics at UCSF and a consultant in infectious disease. He has led the Pediatric Federation community from its inception.

Kathy Chebib, BS, MT, a trained medical technologist, has been a pediatric business manager and practice administrator for more than 30 years. She works for Golden Gate Pediatrics in San Francisco, and helps with the cooperative endeavors of Pediatric Federation.