Our vaccine expense has been running app 37% of collections. Is this normal or out of whack?
That definitely seems high. I haven’t measured it formally during over the last year - when well visits have been at an all time high - but the highest I usually see is ~25-30%.
How “dangerous” this is depends on how much margin you have with your vaccine business. Have you looked at that?
I think I’ve since updated the spreadsheets (and have some new ones coming!).
Thank you Chip. We are in NJ, would you still expect to see about 25-30%? No I do not know our vaccine margin…yet!
Your range really depends on your Medicaid volume, as Medicaid means VFC which means fewer vaccines.
If you tell me that you’re even 5-10% Medicaid and still have 37%…then, yes, you are out on the edge of normal IMO.
Ours is at 24% of all expenses in 2020, so admittedly maybe fewer vaccines given that year.
About 20% of our patients are medicaid. (AHCCCS) Arizona.
Mine is about 46% of my overhead which is definitely way up compared to the previous year. Partly I think due to some expensive vaccines increasing in price and vaccine shoppe changed their automatic payments to 60 days from shipment instead of 90. I just calculated 29% of collections.
We are 21%, but with higher medicaid % than others. I did notice a big jump in spending compared to 2019 (the last normal year). My conclusion, and I think this will apply to other practices, is that our buying behavior changed as a result of PPP and the decision that we needed to stock up as business started to return to normal. We had slowed purchasing in 2nd half 2020 because of you-know-who, then brought inventory back to 2019 levels at the beginning of the summer, thus making a 2021 “investment.” Tax timing and investment expenses each contributed to about a third of the difference. Perhaps that helps some…
That helps a lot. All responses are helpful. Thank you! We are at app 10-15% Medicaid.
That MAY be it, or part of it, but you can easily look at your
expenses over the last year to see if it’s true.
I suspect that the broader and more impactful reason is that nearly
everyone here did FAR FAR more well visits, relatively, than ever
Up through 2019, our clients’ Sick:Well ratio was ~1.5:1. That is,
well visits were 40% of all visits, give or take. In 2020, after sick
visits dropped much more than well visits, that number approached 50%
- and well more than 50% of revenue. It’s possible that practices
didn’t change their volume of vaccines at all (though I expect they
did) and could still see a larger proporation of vaccine overhead.
Does that make sense? It’s easy for anyone here to figure it out.
Cost (and in many cases revenue as well) metrics, are to businesses the way growth charts are to children, IMHO
You may be at 90% or the 5% percentile. Either percentile isn’t necessarily bad. But they can be, especially if there are unexpected changes.
If I were in your shoes ( and perhaps you’ve considered these things already), I’d ask these questions, which may or may not be relevant.
- What’s been the % traditionally?
- Changes in visit patterns, as Chip pointed out (ie, how many more well visits with vaccines are you doing than before).
- Have the staff ordered more vaccines than usual in prep for the increase of wellness? And payments have not trickled in yet.
- How are reimbursements in general? Are your payers playing shenanigans like increasing denials, payment delays?
- Have other expenses like payroll changed?
Hi tms, good for you that you’re investigating your vaccine costs. You would be surprised to see how many practices that don’t. To pick up on a few important points that both Chip and Brandon mention and maybe a couple more thoughts…
There is no doubt that the practices we work with increased their well visits during the pandemic so digging into the volume of vaccines administered pre and post pandemic is critical.
Looking at both sides of the equation is really important. Investigate your private insurance payments for both vaccines and vaccine administration to ensure they are at contracted rates and those rates net a reasonable return for the practice.
Unfortunately vaccine price increases did not stop during the pandemic…that said has your vaccine coordinator checked their invoice pricing against your vaccine GPO pricing? If your invoice pricing is higher, then there’s a problem.
How often are does your practice inventory vaccines (daily, weekly, monthly)? Could there be opportunities to reduce wastage or missed documentation of vaccines within the EMR?
There are several other checkpoints to investigate. My guess is you’ve already found the answer.