SNHD diverts resources from toddler
immunizations to serving businesses

Low per-capita financial support said to lead to pursuit of fee-based revenues

In 2005, the Southern Nevada Health District set a record of sorts.

It had the worst immunization rate for toddlers of any U.S. metropolitan area, according to the CDC’s National Immunization Survey.

The survey focused on children 19 to 35 months of age who received the widely used 4:3:1:3:3:1 vaccine series — shots to immunize against diphtheria, tetanus, whooping cough, polio, hepatitis B, measles, mumps and chicken pox.

Only 58.8 percent of Clark County children in 2005 had completed the series.

Given the district’s mission of providing “safety net” health services to poor families, and given that it’s primarily poor families’ children who remain unvaccinated, you might have expected SNHD to move quickly, focusing all of its available immunization resources on the problem.

But if you expected that, you would have been wrong.

True, managers at the health district did continue their formal cooperation with the many federal, state and local nonprofit coalition efforts that seek to increase toddler immunizations in Nevada.

However, SNHD also not only continued, but expanded, the district’s longstanding practice of providing OSHA-compliant vaccination services for adults at businesses and government entities — even though that service is one that private clinics in the community boasting superior professional qualifications were ready and able to supply.

As Nevada Journal reported in May, the district operates a full-fledged commercial business, called its Workplace Vaccination Program, that competes vigorously, using cut-rate prices, against the fuller immunization services offered by retail medical clinics and doctors in the Las Vegas valley.

Ironically, the reason SNHD is able to under-sell private-sector enterprises is because of its federal classification as a “safety-net” provider to the uninsured and underinsured — that is, the poor and the indigent, the very people away from whom SNHD diverts immunization resources.

According to a former health-district contractor, who requested anonymity, SNHD has expanded into being a medical-service provider, rather than a classic public-health organization focused on preventing disease and promoting community health, in order to raise revenue.

“They try to couch it as being under public health,” said the source, adding that SNHD will argue that, “‘If we didn’t treat these people, then they would be out there, spreading disease throughout the community.’”

However, “the largest driver of that is because of the way the Southern Nevada Health District is funded. They need to generate revenue. And they generate revenue by providing the medical services. There’s very little state or local funding of the health district, compared nationally to what is invested in public health.”

Consequently, the source explained, “The district has tried to be a 100 percent fee-based organization, so when they go out and do inspections — restaurant inspections or pool inspections — they need to generate fees. And the way to generate additional income was to provide healthcare services — whether it’s paid for by the individual, or whether they bill off Medicaid — but it’s to generate revenue.”

The interesting thing that results, said the informant, is that “a lot of insurance companies,” including “one of the largest insurers in Southern Nevada, tell their subscribers to go to the health district for their shots, so that they don’t have to pay for them.”

Then “the health district does it at a below-market rate, because of the ability for it to be taxpayer-subsidized. And they’re able to put that in under their public-health umbrella.” 

Because of the taxpayer subsidies, said the source, the difference between prices charged by SNHD and those at a physician’s office can be substantial.

At the latter, the indirect or overhead “costs are added into the costs of the service in the physician’s office,” but “you don’t have that at the health district because that infrastructure’s already been subsidized to be there” by taxpayers.

If businesses “can carve that service out of their health plan because they’re directing people somewhere else,” the source continued, “then that lowers their costs, which again is an indirect subsidy to the business.”

Southern Nevada firms and government entities taking advantage of SNHD’s heavily discounted vaccination prices in recent years include:

Bilingual Behavior Counseling, the City of Boulder City, Clark County Water Reclamation, Consumer Direct Personal Care, Dentist on Nellis, Desert Dental, Discovery Dental, Fremont Street Experience, Green Valley Dental Care, H20 Environmental, Hanger PNO, Herrick & O’Herron, Inc., J & S Mechanical Contractors, Laboratory Medicine Consultants, Las Vegas Urban League, MGM Resorts Health Plan, Mobile Management Group, Nevada Donor Network, Orthopedic Motion, Precision Instruments, Red Rock Oral, Maxillofacial Surgery Center, RMI Management, LLC, Sands Expo & Convention Center, ServiceMaster 1st Response, Silver Sky Assisted Living, Silver State Smiles, Silver State Transportation, LLC, Southwest Linen, StarBrite Dental, Superstore Auto Group, Western Linen Service and William Lyon Homes.

Meanwhile, what has happened on the toddler-immunization front in Southern Nevada?

According to the 2009 version of the national survey, the low rate the district had in 2005 still existed, four years later.

Since then, however, the vaccination rates in Southern Nevada moved even lower — in concert with immunization rates all across the country declined as the Great Recession continued.

In 2005, Clark County’s percentage was 58.8 percent, according to unrounded figures that health district immunization staff provided to the SNHD board in October 2006.

As of June 30 last year, however, according to data from the state health division, the percentage of Clark County children under 36 months old who’ve received the CDC’s recommended schedule of vaccinations was down to 53.14 percent.

State figures also indicate that, for Nevada’s remaining 16 counties, the toddler immunization rate is 63.18 percent. For the state over all, the rate was 55.93 percent.

Federal lawmakers investigate abuse of the 340B program

The federal classification that allows the district to purchase drugs and vaccines at far-below-market prices is the federal “340B” program. SNHB then administers the vaccines to employees of businesses and government agencies that have signed contracts with the district.

However, the 340B program — named for its location in Section 340B of the Public Health Service Act — was originally only intended to “extend the Medicaid drug discount to the most vulnerable patients receiving services at Public Health Service clinics, including individuals who are, ‘medically uninsured, on marginal incomes, and have no other source to turn to for preventive and primary care services.’”

The just-cited language comes from letters sent by three U.S. senators and a senior member of Congress earlier this year to Apexus, the private contractor operating the 340B program, to PhRMA, the organization representing drug manufacturers on Capitol Hill and elsewhere, and to Safety Net Hospitals for Pharmaceutical Access, which represents “over 800 public and private non-profit hospitals and health systems throughout the U.S. that participate in the Public Health Service 340B drug discount program.”

Requesting “information to assist Congress in its oversight over the 340B drug discount program,” each of the letters was signed by U.S. Sens. Chuck Grassley, Orrin Hatch and Michael Enzi and Congressman Joe Pitts.

The federal legislators note that a Government Accountability Office (GAO) report last September warned that federal oversight of the 340B program was “inadequate” and the risk of improper diversion of 340B drugs has increased significantly.

“Participants have little incentive to comply with program requirements, because few have faced sanctions for non-compliance” from the Obama administration’s Health Resources and Services Administration, said the GAO.

It continued: “With the program’s expansion, program integrity issues may take on even greater significance unless effective mechanisms to monitor and address program violations, as well as more specific guidance are put in place.”

Clearly, diversion of pharmaceuticals procured through affiliation with the 340B program, violates the spirit, if not the technical language, of the original authorizing legislation.

The district, however, when asked about the legitimacy of using its safety-net provider classification as a competitive weapon against private-sector medical clinics, cited the same technical distinctions that Apexus makes on its website and which the federal lawmakers have asked the firm to explain.

“Vaccines are classified,” said SNHD, “as ‘value added products’ under the Prime Vendor Program, not as an ‘outpatient covered drug’. As such, unless otherwise restricted by the terms and conditions of the contract between the Prime Vendor Program and the Health District, vaccines purchased may be used for any population served by the Health District.”

Provided with most of this article and asked for comment, the district sent this statement:

Public health serves the whole community — not just the poor and uninsured — by assuring the conditions in which all people can be healthy. To that end, ensuring that all infants and children are properly immunized is a top priority for the Southern Nevada Health District. The health district is one of many partners in the effort to raise immunization rates and we work with many providers to administer immunizations to children in the community.  It is irresponsible to suggest that the health district has the resources to be the sole provider of immunizations to all children, and is therefore solely responsible for the immunization rates in Nevada. However, we do take our role as a leader in public health matters very seriously and we have championed a number of initiatives and raising immunization rates continues to be a top priority.

The health district’s adult vaccination program is a separate program and in no way detracts from our childhood vaccination program. Quoting an anonymous source who has dubious insight and questionable motives without offering any proof of their baseless allegations is irresponsible. Our adult vaccination program, like all of our public health programs, are not designed to generate revenue, they are designed to cover the costs of offering the service provided to the public.

Steven Miller is the managing editor of Nevada Journal, a publication of the Nevada Policy Research Institute. For more in-depth reporting, visit http://nevadajournal.com/ and http://npri.org/.

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