A market-based solution to the anti-vaxxer problem
The writer is a member of the board of Vontobel AG
As the world grapples with the fast-spreading Omicron variant and its potentially devastating consequences, a major policy dilemma revolves around how governments might nudge the unvaccinated or partially vaccinated to join the ranks of those who are fully protected.
Policies proposed range from fines (in Greece), and Covid passes to access public venues (in France and Switzerland), to nationwide mandatory vaccination (in Austria). Vaccination mandates in particular rankle liberals and libertarians alike and raise challenging ethical questions, while arguably entrenching the position of the unvaccinated.
One answer to the dilemma, which opponents of mandatory vaccination may find more palatable, can be found by examining how insurance markets price risk. Private insurance prices its members’ behaviour by assessing risk on an individual basis. Inexperienced drivers pay a higher premium than those with a no-claims history. Private medical insurance provides incentives for people to make healthy life choices to drive down their premiums. Travel insurance is more expensive for those engaging in riskier activities.
By contrast universal healthcare systems make no such differentiation: cyclists, ski racers, smokers, young drivers, Covid-vaccinated, partially vaccinated and unvaccinated, all enjoy the same access to the healthcare system.
Some have argued that equal access needs to be maintained in the face of a threat as serious as Covid and that choosing not to be vaccinated is equivalent to choosing to smoke, or participating in extreme sports. Most such “risk” behaviours are too insignificant to have a systemic impact and, in any event, most of us engage in some lower risk and some higher risk behaviours, so the balance of the collective is maintained.
Yet the impact of Covid (and, in particular, that of the unvaccinated or partially vaccinated on infection rates) has the ability to overwhelm the healthcare system’s capacity to cope, or, at the very least, its ability to deliver acceptable levels of care to all patients. This is what makes it fundamentally different from the other “risk” behaviours.
In the UK, while over 70 per cent of the population has been vaccinated fully, the overwhelming majority of those needing the most specialist hospital care have been vaccinated partially or not at all. Even with relatively low rates of hospitalisation and ICU bed occupancy compared with the same period last year — and arguably before the full impact of the recent surge has been felt — this has filled the stretched capacity of the NHS, leading to longer waiting lists and cancelled or postponed surgery. To many who have been vaccinated and suffered hardship as a result of lockdowns, this is no longer acceptable.
One way to nudge the unvaccinated to get a jab is to require that those who remain unvaccinated by choice pay for the cost of their own medical care, in case of Covid-induced hospitalisation — a policy that Singapore introduced last year. Some will argue that such a requirement would hit the less well-off or ethnic minorities, who are disproportionally unvaccinated, while giving a free pass to wealthier individuals. To counter that, I would propose a charge philosophically similar to that applied to speeding fines: as a percentage of (in this case annual) income.
While it may be politically unpalatable, this system should be put in place, at least while Covid variants produce such starkly different outcomes in individuals depending on whether they are vaccinated or not — and until antiviral pills have proven to be a cost-effective alternative to vaccination for preventing hospitalisation.
Private insurance markets have shown the way. Universal healthcare coverage should, exceptionally, follow suit in this case as an ethically superior alternative to introducing vaccine mandate and a complement to Covid passes.