Why a vaccine lottery can make ‘cents’ for North Carolina

North Carolina news

RALEIGH, N.C. (WNCN) — North Carolina’s new vaccine lottery could make financial sense for the state if it helps avoid just 125 of the most severe cases or about two months’ worth of overall cases, a CBS17.com data analysis found.

Following the lead of several other states that have goosed their vaccination rates with a cash giveaway, North Carolina is handing out a total of $4.5 million in federal relief funds to a few lucky people who have gotten the COVID-19 vaccine.

While the public health benefits to such an undertaking are obvious, the analysis shows it also can pay off for the state in terms of its Medicaid costs.

Dr. Richard Tarpey, a healthcare finance expert and professor of business at Middle Tennessee State University, says the primary incentive for the state is to get people on Medicaid to get the vaccine.

“And for the greater purpose, of course, they also want to incentivize other people in the state to get the vaccine so they don’t spread it around,” he said. “So it’s kind of hard to look at it from a specific dollars-to-dollars-type (of) comparison because the state always has the the greater public good in mind, and it’s kind of hard to put a price tag on that.”

But it is clear: It’s better for the population at large to have fewer people catching COVID-19.

“We do know that people who get stick with COVID in particular, who go into the hospital and have ICU care, that can be very expensive as well,” Gov. Roy Cooper said June 2. “And in general, usually everybody bears the cost of increased cost of health care.”

The estimated average cost to the state of treating a COVID-19 patient on Medicaid in an intensive care unit is $36,000 for someone without a disability or $72,300 for someone with a disability, according to state Department of Health and Human Services spokeswoman Catie Armstrong.

That means the prize money alone equals those costs for 125 patients without disabilities.

According to a breakdown of Centers for Disease Control and Prevention data, the rate of people with COVID who wind up in ICUs in North Carolina has been roughly 0.15 percent. If those rates hold steady, preventing 125 intensive-care cases means preventing about 82,000 overall cases — or, roughly the number of cases reported by NCDHHS since early May.

State leaders hope to replicate the results seen in Ohio, where vaccination rates spiked by 49 percent three weeks after Gov. Mike Dewine announced one of the first vaccine lotteries, the governor wrote in an op-ed in The New York Times.

Ohio has slightly more people than North Carolina does and a slightly higher per capita vaccination rate.

Tarpey called Ohio’s lottery “a reasonable investment” and with a total expense of about $5.6 million is putting up more of those relief dollars than North Carolina is.

He says in Ohio, “it’s not too hard to believe that you can avoid somewhere in the neighborhood of anywhere up to 500 ICU cases, if you widely distributed the vaccine across the state.”

And while the “how many” is important, so is the “who.”

Tarpey says the lottery isn’t going to attract people who are firmly anti-vaccine, no matter how big the jackpot is. And of course, it has no effect on the roughly 4.5 million people who have already either started or finished the vaccination process.

“So you look at that middle range,” he said, pointing out that most people who play traditional lotteries also tend to have lower incomes.

“If they’re attracted to this lottery and get the vaccine, well, that’s that’s the population you want to serve to, because those are the ones (who) also are typically underserved, health-care wise, and don’t necessarily run out and get a vaccine because either they’re afraid of the cost or whatever the case may be. … So from that strategy, it seems to make sense as well, if you’re looking to target that particular subset.”

He says another group worth targeting — younger people with health coverage who could be enticed by the big dollars. The state is awarding a total of four $1 million prizes to vaccinated adults, and four $125,000 scholarships to vaccinated children between 12 and 17.

“They play lotteries, they like the risk,” he said. “There’s a lot of lottery and gaming theory you can work into this.”


CBS 17’s Joedy McCreary has been tracking COVID-19 figures since March 2020, compiling data from federal, state and local sources to deliver a clear snapshot of what the coronavirus situation looks like now and what it could look like in the future.


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