COVID-19 Vaccines and the Last-Mile

People are complaining about the distribution of COVID-19 vaccines. The issues were inevitable due to a simple problem that plagues all transportation.

Netflix hasn't created a series on the last-mile issue. And it's certainly not a topic of conversation in virtual coffee hours, business networking meetings, or pick-up bars. But it's real. And anyone involved in transporting goods understands it implicitly, whether or not she's studied it formally and recognizes the label. It's a topic that I've written about before that deserves special attention now as we see its issues playing out in real time during the pandemic.

Here's an example that any traveler can appreciate: When my son attended Baylor University in Waco, TX (yes, Joanna and Chip's Waco), I usually flew him back and forth from Boston to Dallas and vice versa. It cost about $125 to send him those 1,562 miles, or less than 10￠ per mile. A price of a ticket for a 91-mile flight from DFW to Waco was also about $125, making the cost of the shorter leg nearly $1.40 per mile. That flight would leave him 14 miles short of campus, requiring him to take a cab or Uber at a cost exceeding $1.40 per mile. I avoided the last two steps by putting him on a bus from campus to DFW for $90 with tip, or $1.00 per mile.

This experience isn't unusual. Think about a car imported from Japan. It's loaded on a ship with another 5,000 cars. When it's unloaded in, say, Long Beach, CA, it's placed onto one of three trains and hauled 1,600 miles with perhaps 1,000 cars to a central distribution supercenter in, say, Kansas City. It's then loaded on another train with perhaps 200 cars headed to a regional distribution center in Des Moines, IA, nearly 195 miles away. From there, it's loaded with seven other vehicles and delivered the final 173 miles to your dealer in Fort Madison, IA, WI. If you pre-ordered it through a touchless buying process, it's then driven by the dealer the final 14 miles to your home on University Avenue in Donnellson, IA. Along each step, the transportation costs per vehicle rise substantially as economies of scale are lost.

Of course, you could fly from Cedar Rapids to Long Beach, pick up the car yourself, and drive the 1,856 miles back to Donnellson. But most people's time is worth more than the cost of avoiding the ever-increasing price on each leg of a typical distribution journey.

Natural Barriers to Vaccines Distribution

The COVID-19 vaccines present several distribution challenges.

First, there's demand for them that exceeds even the run on toilet paper a year ago. We want supplies distributed as soon as each truck can be filled. This situation is similar to the introduction of each Harry Potter book more than two decades ago, when every brick-and-mortar and online store in the country needed a supply on the date of publication. But the publisher had the luxury to set a date that would allow it to ship the necessary quantities with controlled urgency. In the case of the vaccines, the goal is immediate distribution to save lives.

That's a tall order. It requires crews on the loading dock 24/7, which raises costs due to overtime, shift differentials, and perhaps temporary piecemeal labor. It requires outbidding other haulers for the services of independent truckers. And it may requires more expensive modes of transportation (additional truck hailing rather than waiting for the next freight train to arrive).

Second, the first two vaccines require freezing and must be shipped consistent with Food and Drug Administration guidelines, which further reduces the supply and increases the price of all vehicles in the distribution system. Of course, price isn't a factor. But it's reflective of the scarcity of appropriate vehicles and the lengths to which manufacturers must go to build and fill the distribution chain. This coordination - making sure that the handoff is perfect on each leg of this relay race - is expensive and intensive. One failure and the shipment is ruined and patients' plans delayed.

The Last Mile of Vaccine Distribution

The last mile of vaccine distribution is the process of administering the vaccines. This final activity is difficult under normal circumstances, as it involves trade-offs between offering large quantities quickly and at lower transportation cost to regional sites (like Des Moines and Fort Madison in our example above) that are far from many people who need the vaccination, or shipping smaller quantities at the cost of time and shipping expenses to more local areas (Fort Madison, a town of 10,500 located 14 miles from Donnellson, in our example) that are closer to the people who need the vaccination.

Political Barriers to Vaccine Distribution

But COVID-19 vaccines face political barriers that aren't present in the distribution of most goods and services (an exception: supplies following a natural disaster, which are typically commandeered for distribution by federal and state officials). The last-mile issue with vaccinations is eligibility to receive the shot.

The Trump Administration left the last-mile details to state and local officials, believing that they were better equipped than the federal government to know their markets and act in a manner that ensured that people were vaccinated as quickly as supplies arrived. The administration and the manufacturers kept the public apprised on progress on the development, testing, manufacture, and shipment of vaccines. Trump Administration officials allowed states to determine their vaccination-site strategy and prioritization of people to receive the vaccine.

Many state and local officials, despite months to plan for what they knew would be late-2020 shipments of initial batches, flunked this basic test. Many debated whether to prioritize prisoners ahead of essential workers, residents of drug-addiction facilities ahead of the elderly, and healthy public-school teachers ahead of people whose health profile (co-morbidities) escalated their risk of death. They often didn't decide on the optimal mix between super vaccine centers and more targeted community locations. They often didn't build and test proper online registration systems (a friend posted a screen shot of a wait time of nearly 40,000 minutes - the equivalent of 27 days). They sometimes signaled to local municipal health departments that shipments would arrive, then diverted the vaccines to super centers and left it to locals to do damage control with residents after heavily promoting the site. In short, nearly all were ill-prepared when shipments began to arrive.

The Biden Administration has been much more focused on setting federal standards for prioritizing shipments and patients. It has diverted a portion of the supply in an effort to promote equity by, for example, shipping some of the vaccines to medical clinics located in minority neighborhoods or part of the Indian Health Service and Veterans Administration medical systems..

This targeting may be noble - and politically attractive - but every diversion away from the most efficient channels of distribution reduces the rate at which vaccines are administered.

We've seen many states delay the distribution and injection of vaccines as politicians have attempted to design more perfect patient prioritization and interest groups have jockeyed to move their people to the top of the line. And we've seen governors (the embattled Gov. Cuomo of New York perhaps the most prominent) who have enacted regulations that fine injection sites that deviate from his list of priority patients or that open a package of vaccines and don't use all contents. At the end of the day, when a site has 35 doses left and no priority patients waiting, is it better to inject non-priority patients and face fines or not use the doses and face fines? The fines, by the way, were $100,000 and $1,000,000 in New York, so this wasn't a decision for officials at injection sites to be taken lightly.

The Right Way to Prioritize

If the goal is to vaccinate as many people as quickly as the supply of vaccines allows, the most efficient solution is to give everyone an equal change at lining up, whether by online sign-up or daily lottery or daily queuing at a site. Invite more people than you have vaccines to ensure that every dose is administered (even if some people leave unhappy). Efficient yes, but the goal isn't - or shouldn't be - that kind of efficiency.

The goal should be to minimize future deaths from COVID-19. That means some level of targeting so that the most vulnerable populations are vaccinate first, but within a process that doesn't get bogged down in evaluating each potential injectee's vulnerability.

Here's how state and local officials should have prioritized: Start with everyone age 75 and over. Using the age range of 5-to-17 as a reference point, people age 85 and older (like my parents) are 7,900 times more likely to die (and 61 times more likely to die than someone in the 40-to-49 age range). Those in the 75-to-84 range are 2,800 times as likely to die as the reference group (and 22 times more likely to die than someone in the 40-to-49 age range).

Next, focus on the 65-to-74 age range, which is 1,100 times as likely to die as the reference group (and nearly three times more likely than my 50-to-65 age group). From there, death rates decline to 400 times in the 50-64 age group, 130 times in the 40-to-49 group, 45 times for people in their 30s and 15 times in the 18-to-29 age group.

Yes, this distribution isn't perfect. A 50-year-old obese woman - regardless of race - with diabetes who lives in a three-generation apartment in the inner city and works in retail is probably more at risk than my 90-year-old dad with no health compromising health conditions who lives in a retirement facility that's been in lockdown for nearly a year. Since a women who fits this profile is more likely to be black than white, you can see the political fall-out from injecting based on a single factor (age) rather than a more complex formula that factors in medical condition.

But if we strive for perfection and try to give every adult a risk score on which to base prioritization for receiving the vaccine, we bog down the process. Collecting and verifying health information is tedious - and diverts healthcare workers, because we don't want to use temporary help to make critical medical decisions - from the work of treating patients with other conditions. And we open the door to political manipulation (which we've seen some of in the current processes, as elected and appointed officials' family members and large campaign donors have moved to the front of the line).

Of course, this greater targeting of vaccines to the most vulnerable people below age 65 can go on simultaneous with the vaccination of the 65+ population. But it should not take place at the expense of vaccinating a population that, on average, faces the greatest risk of death from COVID-19.

Conclusion

Perhaps a reasonable compromise is to distribute and inject 95% of vaccines based on age as a proxy for the risk of dying and the other 5% to documented risk factors. In fact, that might be the optimal way to save lives. But at some point, every diversion in 1% of vaccines based on something other than the simple proxy will reduce the number of vaccinations, thereby increasing the risk of death across the most vulnerable population. These trade-offs aren't cost-free, despite politicians' protests to the contrary.

The last-mile problem is never solved optimally when the process moves from largely auto-pilot (such as moving the ongoing supplies of goods to consumers via Amazon, Target, and the corner store) to a highly charged political climate in which many view the stakes as life-and-death. Public officials have an obligation to choose the right goals - in this case, minimizing deaths rather than merely maximizing the quantity of injections - and developing simple rules of thumb to prioritize patients to reduce the administrative delays associated with more complex criteria. Ultimately, the fairest process is the one that minimizes the death toll of COVID-19.

I'm director of strategy and compliance at Benefit Strategies, LLC, an administrator of Health Savings Accounts and reimbursement accounts. You can read and subscribe to my Health Savings Account GPS blog here and read my weekly HSA Monday Mythbuster and HSA Wednesday Wisdom columns and occasional Healthcare Update column published on LinkedIn. My book, HSAs: The Tax-Perfect Retirement Account, is the definitive guide to navigating the intersection of Health Savings Accounts, retirement planning, and Medicare. It's available in paperback and e-book at Amazon.

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