COVID vaccines: Here’s who is making money while doing their part to stifle the pandemic in Florida

Think your COVID vaccine was free? It wasn’t.

Although you didn’t have to pay anything for the shots, the fees paid by insurance companies and the federal government put as much as $150 million in the pockets of Florida pharmacies, grocery stores and private medical practices.

Few begrudge these companies the chance to make money for providing a life-saving service during an international health crisis. But a look at doses provided to Publix, Walgreens, CVS and private doctors shows that the COVID vaccine business provided a big source of revenue after a difficult year. Aside from direct revenues, by bringing customers in the door, the shots result in sales of everything from diapers to annual physicals.

“Any time you bring something into a store that’s going to increase foot traffic, you’re going to increase sales,” said Eileen Acello, an expert on food marketing at Florida Atlantic University. “Publix, in particular, does a very good job of merchandising. They’re very good with their displays in the front of the store that piece things together for you, whether it’s seasonally or something related to a meal or their BOGOs. And when you walk in, the pharmacy’s usually off to the right or left in the front of the store. And they don’t miss opportunities.”

Since the vaccination campaign began in December, about 4 million doses have been administered by private providers in Florida such as grocery stores, pharmacies and medical practices.

The vaccines are free to the public. The federal government reimburses administrators at the rate of $40 per shot as of March 15, an increase over the previous rate of $16.94 for the initial dose per shot and $28.39 for the final dose or the one-time Johnson & Johnson vaccine .

Under this formula, Publix would generate as much as $32 million from its distribution of 966,800 doses from the state, as well as several million dollars from doses allocated by the federal government. Such an amount of money, of course, represents only a small fraction of Publix’s revenues, estimated at $44.9 billion in 2020, according to Supermarket News. And from it must be subtracted Publix’s costs in dedicating employees to vaccine administration.

Among the keys to the vaccination effort were Walgreens and CVS, the drug store chains that can be found every few miles on major streets.

Walgreens pharmacies in Florida received 168,013 doses from the state, which could generate as much as $10 million in revenues, along with millions more from doses received from the federal government.

Nationally, the company’s vaccination work appears to be quite a windfall during an otherwise difficult time. According to an analysis by BofA Securities, the company appears likely to bring in $340 million to $564 million from vaccines in the second half of this fiscal year.

“The combination of more shots/higher reimbursement rate should be a boon” for the company, the analysis said.

BofA research analyst Michael Cherny said how much profit each national pharmacy chain makes per shot will differ but overall he expects vaccines to boost financial performance. “Once they get past certain levels to cover the costs, the profit should be robust,” he said.

At CVS, which is giving COVID shots across the United States, the vaccination program helped drive a 2.3% increase in revenues for the first three months of the year, offsetting losses in other areas from the pandemic, according to the company’s financial reports.

“In the first quarter, CVS Health orchestrated an all-out effort to vaccinate Americans against COVID-19,” CEO Karen Lynch said Tuesday in a conference call with investment analysts. “… We are successfully driving health services engagement among customers who are new to CVS Health through COVID testing and vaccines.”

Although doctors’ offices came late to the COVID vaccine campaign, they’ve been delivering a growing number of vaccinations.

Florida’s private doctors have received 877,270 doses, with the largest quantities going to corporate groups with multiple offices — a point that generated some resentment among doctors with individual practices.

Medical industry experts say the opportunity to administer vaccines has brought in revenue after an unprofitable 2020 and provided the opportunity for medical practices to sell patients other services, such as annual physicals. At least three physician groups in Florida — Conviva Care Centers, Cano Health and Sanitas Medical Centers — received enough doses from the state to each generate more than $1 million in revenue from vaccines.

But several large and small practice groups interviewed said the impact on the bottom line has been modest, given the costs.

“We trained the staff. This is not an easy process,” said Kevin Kearns, chief executive officer of Millennium Health Care, which received 11,600 vaccine doses from the state. “You have the cost of staff, the system to do it. A lot has gone into it, which is why we can charge an administrative fee.” Those doses could generate more than $400,000.

Asked whether his company made money from the effort, he said, “I have not thought about it. It’s really to support our patients; for us it’s gratifying that we have done our part to end the pandemic.”

Aside from direct payments, vaccines allow doctors to generate business from the same source as grocery stores and pharmacies: More customers in the door. Instead of shampoo, garbage bags and cat food, doctors sell annual physicals, EKGs and anything else that might be needed by someone who hasn’t seen a doctor in a long time.

“It’s basically a way to encourage patients to come to the office, get vaccinated and while you are there, get that check-up you deferred or get your blood sugar monitored,” said Michael Abrams, a partner at Numerof & Associates, a global healthcare consulting firm. “It’s an opportunity to bring you in to give you a shot and take care of other services from a preventative health point of view. It addresses physicians’ revenue problems, as well as patients’ preventative health needs.”

Financially, the pandemic has been a disaster for physicians, Abrams said. “This is a group that needs revenue,” he said, “and vaccines are one way to do that.”

Those doctors able to get doses are doing outreach to their patients, encouraging those who are hesitant to come in, which costs practices in staff time, said Anders Gilberg, senior vice president of government affairs for the Medical Group Management Association. While vaccines may generate some profit, he does not see them as a huge moneymaker for physicians. “Most simply want to help their patients,” he said.