The Medical Station | Centered on Care
  • Phone: (416) 633-2345
  • Fax: (416) 633-2216
  • 545 Wilson Avenue, North York, Ontario (Directions)

The Economics of Medicine: To Vaccinate or Not To Vaccinate? That is Not the Question.

Share This Page

Posted Apr 11th, 2016 in Articles, General

The Economics of Medicine: To Vaccinate or Not To Vaccinate? That is Not the Question.

Guest Author: Sason Ross, 4th year McGill Economics Student

Immunization has been, without a doubt, one of the most impactful public health advances of our time. Putting aside the proven and profound health impacts, we will explore the economic arguments surrounding vaccination programs. The questions here are: What are the economic costs and benefits to the health care system?  Is it, in the long run, more cost effective to pay upfront for immunization, as opposed to paying later on in patient treatment and hospitalization costs?


It is well established that vaccines lower direct health care costs and indirect societal costs to individuals and populations by significantly reducing vaccine preventable diseases. According to the World Health Organization, vaccination has greatly reduced morbidity and mortality internationally. 

The Economic Impact of Vaccines

The economic impact of vaccination programs has been evaluated through different economic indicators, including cost-benefit ratios. Government and health services organizations across the country should utilize this tool, in addition to others, to explore the issue of vaccination programs.

It has been established, that for every $1.00 the U.S. spends on childhood vaccination, $10.20 is saved in disease treatment costs. Turning our attention to Canada, the Public Health Agency of Canada (PHAC) estimates that we save between $6 and $45 for every dollar spent on most routine immunization programs.

Cost Savings in Canada

In Canada we have seen consistent and significant decreases in the diseases for which we provide vaccines. Turning our attention to the cost-benefit arguments, we see the following financial savings:

  • Influenza vaccine for adults 65 years and older - $45 saved/ $1 spent
  • Measles, mumps, rubella vaccine for children - $16 saved/ $1 spent
  • Pneumococcal vaccine for adults 65 years and older - $8 saved/$1 spent
  • Diptheria, pertussis, and tetanus vaccine for children - $6 saved/ $1 spent

Ontario’s Universal Flu Vaccine Program

Since 2000, the province of Ontario has implemented a universal flu vaccine program, which offers free flu vaccine for anyone over 6 months old. This program was found to reduce influenza cases by 61% and cut influenza related mortality by 28%. In addition to the health impacts, the cost saving has been significant. The universal flu vaccine program has lowered flu-related health care expenditure by 52%, saving our health system $7.8 million each flu season.

Changes to Shingles Vaccination in Ontario

There is a lifetime risk of 20-30% of developing shingles, this increases once you reach your 60's and 70's. It is recommended that people over the age of 60 be immunized with Zovastax vaccine to protect against shingles. The cost of each vaccine is approximately $183.63 - this has been a significant barrier to uptake of the vaccine. As of 2016, however, the MOHLTC will be offering free shingles vaccines for Ontarians aged 65-70. 

The overall vaccine efficiency or effectiveness is quoted as 51.3% for shingles incidence and 66.5% for post-herpetic neuralgia (significant pain along the nerve).  A significant problem however, is that the duration of protection greater than 7 years is unknown. 

Vaccine Cost Savings in the United States: Case Studies

A recent American study found that health departments were spending over $2,000 per case of pertussis in their communities.  In 2010, California responded to over 9,000 cases of pertussis and 10 infant deaths. The average cost of the pertussis vaccine is $3.50. One researcher estimates that for every dollar spent on the diphtheria, pertussis, and tetanus vaccine, more than $24 is saved. 

A published U.S analytic study suggested that routine childhood immunization among children born in 2009 would prevent approximately 42,000 early deaths and 20 million cases of disease. The net savings were estimated at $13.5 billion in direct health care costs and $68.8 billion in societal costs. 

The Role of Vaccines in Mitigating Antimicrobial Resistance

Another impact of vaccination is its role in decreasing utilization of antibiotics later in a patient's life, and therefore reducing antimicrobial resistance. The CDC now advocates the utilization of vaccines as also a tool for addressing antimicrobial resistance – one of the greatest health care challenges we are currently facing.

In particular, vaccinations benefit the elderly and the immunocompromised. Herd immunity, which is the result of a certain proportion of a given population achieving immunity (often via vaccine), offers protection to those who cannot get immunized themselves.

The Medical Station Supports Publicly Funded Vaccination Programs

The health benefits of vaccines are significant, as are the cost effectiveness of many of our province's vaccination programs. For better or worse, economics are an important consideration in public health and health care. 

It is important to look critically at the cost effectiveness and cost-benefit ratios to determine whether it is better for provinces to pay for vaccinations up front versus paying for the cost of morbidity and health care down the road in unvaccinated patients. Ontario currently invests over $130 million a year on vaccines. Looking at the economics behind the medicine will continue to be important as new vaccine programs are increasingly costly and complex. 

New Patient?

The Medical Station is welcoming new patients. Contact us to find out why we are the right fit for you.

Contact Us

Keep Current

Enter your email address below and we'll keep you posted with clinic news and updates.