Are Vaccines Big Money-Makers for Pediatricians?

Written by Brenda Baletti PhD on August 6, 2025. Posted in Current News

The American Academy of Pediatrics and the New York Times say there are no “perverse incentives” for doctors to push vaccines, as U.S. Health Secretary Robert F. Kennedy Jr. recently claimed

But data from insurance incentive structures and an analysis of a pediatric practice’s income show that high vaccination rates are key to a profitable practice.

In a July 15 article, the Times took issue with a comment made by U.S. Health Secretary Robert F. Kennedy Jr., during a June 30 interview with Tucker Carlson. Kennedy told Carlson that there are “perverse incentives” for pediatricians to push vaccines.

The Times article featured a doctor who couldn’t afford to offer vaccines, and comments from leadership at the American Academy of Pediatrics (AAP) who said statements like the one Kennedy made during his interview with Carlson are “misleading and dangerous.”

The AAP also responded on X, linking to the Times article, with a picture of Kennedy and the comment: “Pediatricians do not profit off vaccines.” In a Facebook post, the AAP said:

“As The New York Times explains, most pediatricians either break even or even lose money when they offer vaccines.”

Ryan Champlin, who coordinates vaccine purchasing contracts for doctors at Cook Children’s Health Care System in Texas, told The Defender that incentives for vaccination are typically linked to the CDC‘s childhood immunization schedule.

Champlin said doctors get the extra payments when a certain percentage of their patients — typically 80 percent or more — take all of the vaccines on the schedule.

The Times article, despite its criticism of Kennedy’s “perverse incentives” comment, acknowledged that about half of pediatricians have “value-based contracts” with insurers, an insurance reimbursement model that rewards providers with extra payments for hitting specific metrics that are considered markers for “quality of care.”

According to Children’s Health Defense CEO Mary Holland, these types of incentives have “completely distorted pediatric care in America.”

In an interview with OAN News, Holland said, “Under this idea that vaccines are safe and effective and they help every child, a pediatrician with a large practice of thousands of children in it can earn hundreds of thousands of dollars, really serious money.”

Vaccine researcher James Lyons-Weiler, Ph.D., said that incentives for vaccines — or for any procedure or drug prescription — present a clear and undisclosed conflict of interest. By not sharing that information with their patients, doctors “have violated one of the central tenets of the patient-doctor relationship.”

In other instances of a preferred product leading to greater profits — such as doctors prescribing higher-cost drugs that net more money for them and drugmakers — Lyons-Weiler said “everyone knows it’s a problem, and we talk about it.”

However, when it comes to vaccines, “The entire system presumes that increased vaccination is in and of itself always a good thing for every patient,” which isn’t the case, he said.

Incentivizing doctors to vaccinate every child doesn’t take the individual medical needs of each patient into account and creates an “unnecessary tension” between provider and patient, Lyons-Weiler said.

It is increasingly common today for pediatricians to drop families who don’t want their children to take some or all of the recommended vaccines, according to a 2020 article in Human Vaccine Immunotherapy.

Until 2016, the AAP recommended against pediatricians refusing to treat children whose parents didn’t want them immunized. However, that year, the AAP changed its policy, stating instead that dismissing such families is “an acceptable option.”

Financial incentives to vaccinate ‘now a matter of survival for pediatric practices’

Champlin, who runs a vaccine-buying group that offers doctors a small discount on vaccine purchases, told The Defender that “immunization is not particularly profitable for practices” because there is a cost to purchasing and storing the vaccines, a small administration fee, and losses when people refuse vaccines that doctors have already purchased.

However, Dr. Paul Thomas, who ran general pediatrics practice, has shown that it is very difficult for pediatricians to maintain a viable practice if they don’t administer vaccines according to, or close to, the CDC schedule.

But for pediatricians who follow the CDC recommendations, their practice can be quite profitable.

Thomas, author of “Vax Facts: What to Consider Before Vaccinating at All Ages & Stages of Life,” said pediatric practices have high overhead costs — typically 60-80 percent of gross income — and most would not survive without the income from vaccines and well-baby visits, during which the vaccines are often administered.

In his practice — which for years had 10 providers and over 15,000 patients — Thomas gives parents the choice to vaccinate after sharing the risks and benefits. Over time, he said, more and more of his patients opted out of vaccines, and he saw a substantial drop in profits.

To understand how deviations from the schedule could affect the bottom line, Thomas and his administrative team analyzed his practice’s financial and visit data for a month. They identified the administration fee lost for each vaccine recommended by the CDC, but refused by parents.

The results, published in a 2021 peer-reviewed paper in the International Journal of Vaccine Theory, Practice, and Research co-authored with Lyons-Weiler, showed that when patients deviate from the schedule, losses exceed $1 million for a practice that bills approximately $3 million per year.

“It becomes clear that the financial incentives to vaccinate are now a matter of survival for pediatric practices,” Thomas concluded.

A ‘big hidden thank-you for vaccinating income’

Thomas explained that, excluding bonuses, income from vaccines is derived in two ways. First, pediatricians get a small administration fee for each shot.

The fees vary, but are typically around $40 for the first antigen and $20 for each subsequent antigen. For example, the measles, mumps and rubella, or MMR, vaccine has three antigens, which add up to an $80 administration fee.

Thomas called the administration fee the “big hidden thank-you for vaccinating income.”

He said:

“It would be justified if pediatricians were spending 15-20 minutes providing informed consent each visit, going over the real risks and the often marginal to non-existent benefits of each of the vaccines being recommended.

The reality is that doctors/providers typically hand the parent the CDC-produced propaganda piece called the VIS (Vaccine Information Statement) as they walk out the door, saying something like, ‘Look this over and the nurse will be in to give the vaccines.’

It often is the nurse or MA [medical assistant] who gives the VIS, so the provider does nothing related to informed consent.”

Physicians also apply a small upcharge on the price of the vaccine itself, which is typically about $5 and not a significant source of income, Thomas said.

The most substantial financial incentive comes from the value-based care incentives, which tie payments to meeting benchmarks. These benchmarks vary by insurance provider, but Thomas said a typical requirement would be 80 percent of patients being fully vaccinated by age two.

He estimated that bonuses typically add up to $100,000 or more per year per physician. A large practice “that does a good job vaccinating and following the CDC schedule, is likely getting over $500,000 a year just from the new cohort of newborns that enters the practice that year.”

Thomas’ research showed that the other major source of income for pediatricians is well-baby visits during the first six months of life.

Today, with many children visiting urgent care for acute illness, vaccination and well-baby visits have become key to survival for most pediatric practices, he said.

How do the incentive programs work?

The value-based care incentive model — also called “pay-for-performance” — as opposed to the “fee-for-service” model, has expanded in recent years, particularly after government insurers like Medicaid and Medicare began implementing it.

Today, most major insurance providers offer incentives for various procedures and drugs, from the number of children vaccinated to the number of patients taking statins, undergoing breast or colorectal cancer screenings, or having their eyes dilated.

The metrics vary by insurer, and some vaccine incentives kick in even at low rates.

In the case of pediatric practices and vaccines, insurers typically pay incentives based on the percentage of children in a practice that receive all of the “Combo 10” vaccines, which are 24 or 25 shots of 10 vaccines recommended for children by age two.

Meridian — a health insurance vendor that administers Medicaid, Medicare and Health Insurance Marketplace in Michigan — increases its incentives based on the percentage of children in a practice who get the shots.

In its program, providers serving Medicaid recipients get a $50-per-child incentive if they reach the 50th percentile for vaccination in their practice, where 27.49% of the children in their care receive Combo 10 shots on time.

Doctors are paid another $50 incentive for every 13-year-old who gets one Tdap, meningococcal and HPV shot if they meet the 50th percentile target, or 34.3 percent, in that group.

If providers hit the 75th percentile for Combo 10 and adolescent vaccines, the payment goes up to $75 per child. If they hit the 90th percentile, the payment is $120.

Meridian providers also receive extra payments to vaccinate children in foster care. They receive $50 for each child in foster care who gets the Combo 10. They are paid another $50 for every 13-year-old in foster care who gets the three required shots.

As part of commercial Blue Cross Blue Shield’s programs, providers receive a flat incentive payout of $175 per child for hitting the Combo 10 benchmark, $75 for the childhood flu shot, $150 for the adolescent Combo 2 and $75 for the adolescent HPV vaccine.

That’s a flat-rate incentive of $475 for every 13-year-old child, if all of the shots are given. According to the AAP, an average pediatric practitioner treats approximately 1,546 children — which means a bonus of $660,915 if 90% of those children take all of the shots.

The number of patients seen by practitioners working in HMOs is even higher. Those bonuses don’t include incentives for other things, such as wellness visits and prescriptions for asthma medication, which have their own incentive structures.

The AAP’s Dr. James Perrin told the Times that the payments are “modest, accounting for just a small share of what insurers pay to a given clinic.”

Another pediatrician, Dr. David Higgins, told the Times that calling the incentives “perverse” misrepresents the motivations of pediatricians who had “willingly gone into one of the lowest-paid medical specialties.”

The average pediatrician earns $260,000 per year.

Lyons-Weiler said he was curious how they would define the threshold at which an incentive becomes “perverse”:

“It would be a really distasteful conversation to have because then we’re trying to say, OK, how much is the violation of someone’s informed consent worth?

How much is it worth to put children at risk who might have had serious adverse events or even moderate adverse events for vaccines so that they make their quota?”

He argued that such incentives “don’t belong in medicine,” because they inhibit doctors’ ability to see every patient’s well-being as their number one priority.

“Otherwise, the accountants are running medicine, not ethical doctors,” Lyons-Weiler said. “We need to free physicians from the shackles of profit-incentivized medicine. We need to free doctors to be able to become physicians. Physician means healer.”

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