Is an ounce of prevention worth a pound of cure? Evidence from a large-scale vaccination experiment in China

Abstract

Can publicly-funded immunization programs in developing countries be cost-effective? To answer this, we run a large-scale experiment in China to estimate the cost-effectiveness of influenza and pneumococcal vaccines on elderly patients with chronic obstructive pulmonary diseases (COPD). Vaccinated patients – relative to the control group – experienced improvements in their COPD condition, which led to a substantial decrease in their medical expenditure (public medical insurance reimbursements and out-of-pocket expenses). Our conservative difference-in-differences estimates imply that every dollar spent making vaccination freely available reduced public medical insurance reimbursements by at least 10 to 33 dollars, and reduced total medical expenditure by 15 to 46 dollars. Comparing across beneficiaries, we find that patients aged 70 and above, those with more severe COPD symptoms, and those residing in rural areas, benefitted the most from immunization. Our results shed light on the long-run viability of public immunization programs, and for whom should immunization be prioritized.