News Release

New COVID-19 vaccine a good value for US, U-M team finds

Economic model created for CDC shows that in older adults promoting updated vaccination will save the U.S. money, while in other adults it should be reasonably cost effective

Reports and Proceedings

Michigan Medicine - University of Michigan

With updated vaccines against the SARS-COV2 virus now available nationwide, a new analysis suggests that America could save money by ensuring that as many older adults as possible get it.

As for adults under 65, the analysis suggests investing in vaccination against COVID-19 will be worth the money spent by insurers and government health care programs, because of prevented hospitalizations, critical illness, long COVID and deaths.

That’s especially true for people in their 50s and early 60s.

A team from the University of Michigan prepared the preliminary economic analysis for the Centers for Disease Control and Prevention, and presented it at the September 12 meeting of CDC’s Advisory Committee on Immunization Practices. Lisa Prosser, Ph.D., led the U-M team’s analysis.

While the analysis focuses on costs to insurers and the government, individuals don’t have to pay for the updated COVID-19 vaccine out of their own pockets, with few exceptions. However, some insurers have limited the locations where they will pay for patients to receive it, and people without insurance should pick a location that takes part in the new Bridge Access program. Visit to find a vaccination location.

From recommendation to implementation

At the end of the CDC ACIP meeting, the committee officially recommended the updated COVID-19 vaccines for all people over age 6 months, based on a wide range of data on how the virus continues to affect people across the United States three and a half years into the pandemic.

The U-M-led economic analysis, which focused on people 18 years and older, was cited in the official publication of the recommendations.

In general, ACIP’s recommendations about any vaccination, once accepted by the CDC director, guide clinicians and patients. They also determine which individuals must be able to receive a vaccine at no cost to them under most types of insurance, under a provision of the Affordable Care Act.

About 7% of all U.S. adults, and more than 15% of people over age 65, received the updated COVID-19 vaccine in the first month after the CDC director accepted ACIP’s recommendation, data released at the October ACIP meeting show.

Prosser said, “Even though I’ve been working with CDC for 25 years and have presented to ACIP many times, this analysis was especially interesting.

“Given the novelty of this virus, instead of systematic reviews and meta-analyses of published data, we were able to utilize extremely recent unpublished data on COVID booster effectiveness and the incidence of current infections, hospitalizations, deaths and long-term effects,” she said. “We appreciated the opportunity to work so closely with CDC collaborators to inform this policy decision.”

Prosser is the Marilyn Fisher Blanch Research Professor of Pediatrics at the Medical School, and a professor in the U-M School of Public Health, as well as serving as U-M’s associate vice president for research for the health sciences.

Cost-saving for some, cost-effective for others

Prosser and her colleagues showed that even when they varied the underlying variables in their model, vaccinating people over 65 with the updated vaccine was a cost saving move.

For every 100,000 people over 65 vaccinated with the updated vaccines, they calculated 8,982 cases of symptomatic COVID-19 would be avoided, as well as 391 hospitalizations including 84 intensive care stays.

Most important, just over 43 deaths of people over 65 would be prevented for every 100,000 vaccinations with the new booster.

The team also included in their analysis lost productivity from paid and unpaid productive activities, likelihood of developing severe acute illness and long COVID-19, the costs of the vaccine, the cost of the time needed for health professionals to administer the vaccines and patients to receive them, and the very low -- but still measurable -- rates of vaccine reactions.

The bottom line: for people over 65, who have the highest risk of COVID-19 related illness and death among adults, total costs avoided would be greater than total costs incurred.

What about adults over 18 but under 65?

Overall, vaccination on a nationwide scale for this age group would cost more money than it would save.

But that doesn’t mean it’s less important to vaccinate these adults, Prosser warns.

“In life, with anything we buy, we invest in it to get some kind of utility,” she said. “We don’t expect a car or a home to be cost saving – we pay for it to get the value of what it can do for us. In the case of vaccines, we invest in buying additional health. And this is true for the majority of health interventions, vaccines or otherwise.”

Economists calculate this using something called an incremental cost effectiveness ratio or ICER. That measures the dollars that would be spent to save one year of life, adjusted for the quality of life that the person might have in that year.

This is called a quality adjusted life year or QALY. Prosser said one way to think of a single QALY is a year spent in perfect health.

CDC does not use an explicit threshold for determining cost effectiveness and compares to other recommended vaccines. Other sources have suggested a threshold of $100,000- $150,000/QALY as a reasonable benchmark for the U.S. 

For the entire U.S. population over age 18, boosting with the updated COVID-19 vaccines has an ICER of $33,437, the U-M team showed in its preliminary analysis.

Looking just at 50- to 64-year-olds, no matter what their health status, the ICER would be $25,787 – meaning high value.

And for just 18- to 49-year-olds, the ICER is still in the intermediate range, around $115,000 on the average, even though there are members of this age group whose underlying health would bring that number down.

The cost effectiveness level for this youngest group of adults was very sensitive to the cost of each dose of vaccine to the insurers and government agencies that will buy it, which the team estimated at $120.

Past and future work on COVID-19 and RSV vaccines

Prosser said the team hopes to do future analysis of data from children and teens.

Much cost effectiveness research on vaccines has been done for children’s vaccines, where the time scales for additional years of life are longer, Prosser added. But influenza vaccine for older adults has also been shown to be cost saving.

She notes that it’s the second time this year that U-M researchers have presented an economic analysis for an adult vaccine to ACIP – the first being for the two new vaccines against respiratory syncytial virus, or RSV, that ACIP recommended for adults over age 60.

David Hutton, Ph.D., Prosser’s collaborator from the U-M School of Public Health, presented those data at ACIP’s June meeting.

In that case, unlike with the COVID boosters, ACIP recommended that older adults consult with a health provider about the potential benefit of the RSV vaccine for them based on their health status.

The U-M economic analysis suggested that the RSV vaccines would be potentially cost effective, especially in people over 65, but that this would depend on exactly how well these new vaccines do at keeping older adults from getting ill, needing hospitalization or protecting someone over multiple years.

In addition to Prosser and Hutton, the research team includes programmer/analyst Acham Gebremariam, MS, project manager Angela Rose, MS, MPH, and research assistant Kerra Mercon, MS, as well as Cara Janusz, PhD from Wake Forest University and collaborators from CDC.

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