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Glossary Advisory Committee on Immunization Practices (ACIP). A 15-member expert advisory body appointed by the Secretary of the U.S. Department of Health and Human Services (DHHS) to advise the Secretary and the Centers for Disease Control and Prevention (CDC) on prevention of vac- cine-preventable diseases. ACIP recommends vaccines for use by the gen- eral population or targeted groups and recommends vaccines for inclu- sion in the Vaccines for Children (VFC) entitlement program. Antigen. Any foreign substance in the body that triggers an immune re- sponse. A vaccine is made up of one or more antigens that trigger the body's immunity to the intended disease. Block grant. A block grant is a federal program financing mechanism by which programmatic funds are distributed to the states, which then have considerable leeway in how they use the funds to achieve the program- matic goals. Examples of block grant programs are the Temporary Assis- tance for Needy Families and Maternal and Child Health grant programs. Combination vaccine. Two or more vaccines administered in a single in- jection; DTaP is an example. . . Community health center (CHC). CHCs are nonprofit health clinics that provide primary medical care to underserved populations. They include health centers that do and do not receive Section 330 grants from the Bureau of Primary Health Care. In 1992, an alternative term federally 221

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222 FINANCING VACCINES IN THE 21ST CENTURY qualified health center (FQHC) was introduced to denote CHCs eligible to receive Medicare payment. Concentration. The market shares of the largest firms indicate the con- centration of the industry. Indicators of concentration include the cumu- lative four-firm and eight-firm market shares, as well as the Herfindahl Index, which is calculated as the sum of the squared market shares of all of the individual firms. Copayment. A fixed amount of money paid by an insurance beneficiary at the time of service. Typically ranging from $5 to $25, this form of pa- tient cost sharing is designed to provide an incentive for the patient to utilize health resources wisely. Cost sharing. A health insurance provision that requires the insured indi- vidual to pay some portion of medical expenses through three usual meth- ods copayments, coinsurance, and deductibles. Coverage. In the public health literature, usually refers to the rate of im- munization of a population; in the economic and health policy literature, usually means enrollment in a health insurance plan. To avoid confusion, the term is used exclusively in this report to mean insurance coverage. Crowd-out. The tendency of public programs to absorb some proportion of individuals or entities that would otherwise participate in private mar- kets. In health insurance markets, the term commonly refers to the phe- nomenon whereby privately insured individuals or companies drop pri- vate health insurance coverage and take advantage of a public program. Current Good Manufacturing Practices. FDA standards for vaccine manufacturing processes and facilities; must be met before and during production of vaccines. Deductible. A preset amount below which insurance policies typically do not pay for expenses. Once the deductible has been satisfied, all other expenses are paid according to the terms of the policy. Defined contribution plan. Also known as a consumer-driven health plan, a group health insurance program that provides employees with health spending accounts with which they can purchase a high-deduct- ible insurance policy; pay for cost sharing; and purchase extended ben- efits, such as a fitness center membership. Once all the money in the ac- count has been used, employees must pay for any copayments and other

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GLOSSARY 223 noncatastrophic care out of pocket. It is called a defined contribution plan because the employer contributes a predefined amount; the benefits re- ceived by the employee vary according to his or her medical experience and personal choices. The typical employee benefit plan, in contrast, is a defined benefit policy because the benefits that can be received by the employee are defined, and the amount paid by the employer varies ac- cording to the employee's utilization of medical services. DTP/DTaP. A combination vaccine that immunizes against diptheria, a respiratory disease; tetanus, a disease of the nervous system contracted from the environment; and pertussis, also known as whooping cough. All three can be fatal. DTaP includes the newer "acelullar" version of the per- tussis antigen, which does not contain whole cells. Eligibility. Criteria that establish whether an individual is qualified to participate in a particular program. For example, federally defined eligi- bility for participation in the VFC program requires that an individual be between the ages of O and 18 and fall into one of the following categories: Medicaid-eligible, uninsured, Native American, Alaskan Native, or underinsured and receiving vaccination at an FQHC. ERISA. The Employee Retirement Income Security Act, a federal law passed in 1974 that established standards, reporting, and disclosure re- quirements for employer-funded pension and health benefit programs. By preempting state law, self-funded health benefit programs are ex- empted from state insurance regulation. Externality, positive consumption, or spillover effect. When a consump- tion of a product by one person benefits others, the benefit to others is a positive consumption externality or spillover effect. For example, the measles vaccine protects not just the individual being immunized but the community at large by establishing herd immunity. Federally qualified health center (FQHC). A community health center that is eligible to receive Medicare payment. Fee, administration. The payment or fee to a clinician or provider organi- zation for the administration of a vaccine, exclusive of the reimbursement for the cost of the vaccine itself. Fragmentation. A term used throughout this report to refer broadly to adverse consequences of multiple funding sources and multiple provid- ers for immunization. Such consequences include difficulties in determin-

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224 FINANCING VACCINES IN THE 21ST CENTURY ing patient eligibility because of multiple funding programs, increases in referrals from the private to the public sector, and scattering of medical records among multiple providers. Health maintenance organization (HMO). An entity that provides both insurance and medical services to members, who pay a fixed premium in advance without regard to the actual services used. Members must use selected providers that are affiliated with the HMO or pay extra and must abide by certain restrictions in their utilization of services. Health plan/health insurance plan. In this report, both terms refer to health insurance companies and the specified services provided to insured individuals under the terms of the plan. In this context, "health plan" does not imply an HMO or other type of managed care. Herd immunity. Immunity among a large percentage of a population, which protects even those not immunized by interrupting the transmis- sion of disease. Hib. Haemophilus influenzue type B. a bacterial disease that is responsible for meningitits, pneumonia, and other diseases. Also denotes the vaccine that protects against it. Hepatitis A. A serious viral infection. Hep A is often used to indicate the vaccine that protects against it. Hepatitis B. A dangerous viral disease that affects the liver. Hep B and HBV are often used to indicate the vaccine that protects against it. Immunization. The process by which a person or animal becomes pro- tected by a vaccine against a disease. Interchangeable with "vaccination" or "inoculation." Influenza. A seasonal, respiratory virus commonly known as the flu. IPV. Inactivated poliovirus vaccine (see poliomyelitis). Market power. The ability of an entity to negotiate more favorable prices or other terms based on its large percentage share of a market. Monopo- lies and monopsonies have the maximum market power over their re- spective product and input markets. Market power is correlated with the degree of industry concentration (see definition above).

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GLOSSARY 225 Meningococcal vaccine. A vaccine that protects against neisseria meningitidis, a bacterial infection that is the leading cause of bacterial men- ingitis and sepsis in children and young adults. The disease is fatal for about 10 percent of those who contract it. MMR. A combination vaccine that immunizes against measles, a serious respiratory virus; mumps, a viral disease that that can cause deafness; and rubella, a mild rash with sometimes serious complications, also known as German measles. Monopsony. A market characterized by a single buyer. A monopson~st~c market behaves like a monopsony by virtue of having a very dominant buyer. National immunization system. The constellation of private and public programs, services, providers, and public health activities that finance, deliver, promote, and monitor immunization services and outcomes. National Vaccine Advisory Committee. An advisory group that makes recommendations to the National Vaccine Program Office (see below) re- garding national immunization policy and strategies. National Vaccine Program Office. The office within DHHS that is re- sponsible for coordinating national immunization efforts across multiple agencies. OPV. Oral poliovirus vaccine (see poliomyelitis). Out-of-pocket expenses. In health insurance, medical or related expenses that must be paid by the patient under the terms of the insurance contract. Includes copayments (or copays), coinsurance, and deductibles. Also known as cost sharing (see definition above). Pneumococcal conjugate vaccine (PCV-7~. Vaccine that protects against streptococcus pneumonias bacteria, a leading cause of severe respiratory and ear infections in children. A conjugate vaccine joins together two com- pounds, usually a protein and a polysaccharide, to enhance a vaccine's potency. Also, this vaccine is 7 valent, meaning that it contains antigens from seven different disease-causing agents. Pneumococcal polysaccharide vaccine (PPV). Vaccine, primarily for adults, that protects against streptococcus pneumonias bacteria, a leading cause of pneumonia, bacteremia, and meningitis. A polysaccharide is a

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226 FINANCING VACCINES IN THE 21ST CENTURY vaccine containing multiple chains of sugars that resemble the surface of the bacteria. Poliomyelitis (also polio). An infectious viral disease that attacks the ner- vous system and can cause paralysis and death. OPV is the oral poliovirus vaccine that protects against the disease; IPV is the currently recom- mended, inactivated (or killed organism) version. Preferred provider organization (PPO). An insurance entity through which members receive services from a network of providers at one cost- sharing level, or from non-network providers at a higher level of cost shar- ing. It is generally less restrictive than an HMO. Provider. In this report, refers to both a medical professional and an insti- tution engaged in patient care, such as a physician, a nurse, a hospital, or . . a c mlc. Public good. A product whose benefits may be provided to all people at no greater cost than that to provide it to one person. The benefits of the product are indivisible, and people cannot be excluded from using it. For example, national defense is considered a public good because it benefits everyone and can exclude no one. In this way, a public good contrasts with a private good, such as bread, which if consumed by one person cannot be consumed by another. Public health clinic. In this report, denotes any publicly funded medical clinic, including community health centers, rural health centers, local health department clinics, and federally qualified health centers. Recommended vaccine. A vaccine that has been recommended by ACIP for universal use or use among target populations based on the vaccine's efficacy, safety, and indications. Recommended vaccines are listed on CDC's childhood or adult vaccine schedule. Schedule, immunization or vaccine. See recommended vaccines. Section 317. Section 317 of the Public Health Services Act, enacted in 1963, established a national program of funding to states for the purchase of vaccines and for investments in immunization infrastructure. Societal benefit. The total benefits of a vaccine, including both the private benefits to the person receiving it and the public benefits to others. Using this approach, a monetary value is assigned to all benefits associated with

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GLOSSARY 227 a new vaccine that can be determined and measured (for example, future medical costs that are averted, as well as additional life-years and en- hanced quality of life). The sum of these values represents the vaccine's societal benefit. This calculation involves certain technical challenges and requires a consistent methodology and set of assumptions for all vaccines. Spillover effect. See externality. Tetanus. An often fatal bacterial infection transmitted through open wounds. Tetanus toxoid (TT) is the vaccine that protects against tetanus. Tetanus toxoid is commonly combined with other antigens to create com- bination vaccine products, pediatric DT or adult Td (tetanus-diphtheria) and DTaP (diphtheria-tetanus-acellular pertussis). Thimerosal. An ethyl mercury-containing preservative used in vaccines that enabled multiple vaccinations from a single vial. Recently, the FDA required the removal of thimerosal from all recommended vaccines. Universal purchase. Refers to government purchasing of all vaccines for all or most of the population, regardless of private insurance coverage. Some states currently have universal purchase programs. Vaccination. The process by which a person or animal becomes protected by a vaccine against a disease. Interchangeable with "immunization" or "inoculation." Vaccine Adverse Events Reporting System (VAERS). A system for track- ing data on adverse side effects from vaccination. Vaccine Injury Compensation Program (VICP). A program established by the National Vaccine Injury Compensation Act to provide assistance to those suffering serious adverse events as a result of routine vaccination. Designed to protect vaccine companies from product liability lawsuits from rare events. Vaccine pipeline. The collection of vaccines in various stages of active research and development that are considered likely candidates to become available in the foreseeable future. Vaccine schedule. A table identifying vaccines, their doses, and the tim- ing of their administration as recommended by ACIP.

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228 FINANCING VACCINES IN THE 21ST CENTURY Vaccines for Children (VFC) Program. Enacted in 1993 and implemented in 1994. VFC is a federal entitlement program that provides recommended childhood vaccines to children between the ages of O and 18 in the follow- ing categories: Medicaid-eligible, uninsured, Native American, Alaska Native, or receiving vaccination at a federally qualified health center. Varicella. Chickenpox, a viral infection causing red blotches on the skin. Also, the vaccine that protects against it.