Pima County analysis shows vaccinated employees incur less health care costs than unvaccinated employees

With the ban on COVID-19 vaccination mandates for employees of government entities in the state taking effect on Sept. 24th, new data shows that vaccinated employees in Pima County have cost the county “significantly” less in health care costs than unvaccinated employees.

 

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To promote vaccination rates, the Pima County Administrator established a vaccine mandate for all new and promotional employees on Aug. 31st, 2021, except for those who had a medical or religious accommodation. On Sept. 7th, 2021, the County Board of Supervisors established a $45.51 vaccine surcharge on the health insurance medical premium per pay period for unvaccinated current employees on the county’s health insurance plan. The surcharge took effect in Nov. 2021, and has not applied to employees who had received a medical or religious exemption.

In a memorandum to the Board of Supervisors, County Administrator Jan Lesher wrote that “the policy objective for incenting vaccination among our workforce has been achieved.” Prior to the establishment of the surcharge, there were 4,623 vaccinated employees at Pima County, and following its implementation, this number rose to 5,455 by the end of the year.

Data included in Pima County’s analysis compared health care costs between unvaccinated employees paying the surcharge and vaccinated employees from Oct. 1st, 2021, to July 31st, 2021. 

The 568 unvaccinated employees who filed a health care claim during this time period, despite representing only 11.4% of all employees with health care claims, represented 17.3% (about $4,361,869) of total health care costs incurred at the county. The health care cost to Pima County for unvaccinated employees was $768 per employee per month compared to $475 per employee per month for vaccinated employees.

The memorandum notes that the biggest cost differences could be seen in the Inpatient Facility and Specialist Physician medical cost categories.

Francisco Garcia, Deputy County Administrator and Chief Medical Officer at Pima County, emphasized the value of this information for financial planning.

“It means that, as a large employer, unvaccinated employees really do cost us more money. Strictly from a health plan management perspective, we have to make those contingencies, we have to make sure that we have sufficient reserves to cover that kind of [cost differential between unvaccinated and vaccinated employees],” he said. “This data shows that when you’re able to do something like this, it [leads] to real dollars and cents savings. 

Even though there’s a relatively smaller number of employees in that unvaccinated category, they cause a disproportionate amount of costs because they are the people who are requiring pulmonologists and other advanced specialists in treatment. I think we wanted to have the opportunity to demonstrate that this policy intervention that was undertaken by our board actually yielded positive results and was a positive thing in terms of our health care spend.”

While Pima County’s vaccination mandate and health insurance surcharge are set to end on Sept. 24th, the memorandum recommends replacing these measures by providing an additional 16 hours of paid leave to employees who provide yearly documentation of COVID-19 booster vaccination status “to incentivize a highly vaccinated workforce.”

“I believe we have demonstrated that there is value in large employers being able to control health care costs for their employees by requiring vaccination,” Garcia said. “I can’t do it as a government employer, but it should raise the question for private sector employers who might be in a different legal position to have or not have these kinds of requirements.”