What if We Had Really Paid People to Take the COVID Vaccine?
But There May (Will) Be Another Chance
As the Omicron variant of the COVID virus spreads rapidly throughout the globe, I revisit here my earlier What If (https://robertlitan.substack.com/p/what-ifs-in-life) and Timing is Everything (https://robertlitan.substack.com/p/timing-is-everything-almost-in-business) posts and apply them to the continuing COVID vaccination challenge.
I say “continuing” because although 60 percent of the U.S. population now has the initial doses of the vaccine, https://usafacts.org/issues/coronavirus/state/, those have mostly worn off, and a far lower fraction of the US population (17 percent of those older than 5) has been “boosted,” exposing most of us to the Omicron variant, though one that thankfully, at least so far, appears to cause milder disease than the earlier, much deadlier COVID variants.
Back in August 2020, I suggested in a then somewhat controversial Brookings Institution essay, https://www.brookings.edu/opinions/want-herd-immunity-pay-people-to-take-the-vaccine/, that the U.S. government should have paid each person $1000 to take the first COVID vaccine, upon the FDA’s emergency approval, which was widely expected at the time and came through several months later. One wrinkle: $200 of the payment would come at the time of the shots and the balance of $800 would be paid once “herd immunity” had been achieved, which I then estimated at 70 percent of the population. The “hold back” was designed to induce people to encourage others to take the shot, or at least not spread misinformation on social media – since everyone would then have a financial stake (getting that remaining $800) in the country as whole coming together to fight the virus. Another wrinkle I should have added then is that the herd immunity trigger should have been defined at the state or even city level, since the course of the virus varied so much across the country.
I estimated the cost of doing this at around $275 billion and though I recognized that the payment would be “wasted” on those who otherwise were inclined to take the shot, I argued that given the stakes involved – getting the economy back on its feet and saving large numbers of lives – that “waste” would be worth it. I also proposed paying for vaccinations because it was patently obvious in August 2020 that vaccination was going to become as politicized as the virus itself had been. And because I feared that mandatory vaccines would make polarization even worse, I thought it would be better for country to use a financial carrot than the mandate stick.
But, of course, my fears that not only a mandate would come and that it would become yet another driver of polarization have come to pass. I confess to missing, however, the success of the legal challenges to the federal vaccination mandates, both for workers at larger employers and for federal contractors. I had incorrectly assumed that the courts, even Trump-appointed judges, would follow the Supreme Court’s 1905 ruling in Jacobson v. Massachusetts which upheld the right of local officials operating under state authority to mandate the smallpox vaccine. But this precedent governing local and state governments which historically have “general police powers,” does not appear to apply to federal rulings, nor does it take account of the technical legal challenges to the way in which OSHA, the federal agency with authority over workplace safety, issued its emergency mandate rule. Thus, although the federal mandates appear to have boosted vaccination rates while they lasted, policy makers cannot count on federal vaccination mandates being used going forward.
In any event, since I advanced the payment for vaccine idea, there has been a vigorous debate about its merits, some pro and others con. There have also been a few surveys about peoples’ willingness to take the vaccine if paid to do so. For the most part these surveys of intentions have tested much smaller payments than the proposed $1000 payment – instead in the $100 or less range. The results have been mixed, which is not surprising because payments of small amounts should not be expected to change many minds.
Multiple private companies, even hospitals and some colleges nonetheless have offered to pay people to take the vaccine, but here too, the amounts generally have been small. In July, several months before he embraced mandates, President Biden endorsed the idea of states paying $100 for vaccinations. Some states even have offered lotteries with million-dollar-plus prizes. It is impossible, however, to know whether any of these payments have “worked” because there has been no effort, nor is there really a way, to know what people who were paid would have done without the payments.
In principle, of course, the effectiveness of paying people to be vaccinated could have been tested like the vaccine itself, or any other drug, by running a randomized control trial (RCT): randomly picking one (large) group of people and offer to pay them and compare their take-up rate with another randomly chosen “control” group who would have been given access to the vaccine but not paid if they got the shot(s). Amidst the pandemic, however, an RCT would have been both unethical and politically untenable, as it would have required the rest of the population to wait even to have access to the vaccines until the RCT was completed. Meanwhile, thousands would continue getting the virus and dying from it. (But keep the RTC idea in the back of your minds, I will come back to it later).
Still, as it turned out, the timing was never right for the initial proposal to pay people to take the vaccine. There was no chance that either President Trump or Congress would have considered the idea in the fall of 2020, only a few months before the November elections, and before the Pfizer vaccine was approved for emergency use in December. Then after the election, Trump’s proposed unconditional $2000 COVID relief payment for most Americans proved so popular that President Biden and Democrats endorsed the idea, although it didn’t become law until March 2021 (by that time with large Republican opposition). In theory, the estimated $275 billion for vaccine payments could have been made part of the $1.9 billion relief package, since the FDA by then had already given emergency approval to all three major vaccines, but as a political matter it was too early to offer the conditional payments. The Biden Administration was in office for less than two months and had just begun its public campaign urging people voluntarily to be vaccinated. It is understandable, as a purely political matter, why the Administration, or any Administration for that matter, would not have wanted to have so quickly turned to a “Plan B” – paying for vaccinations –without at least trying an education and persuasion campaign first.
Predictably, however, given our politically polarized country, that effort failed to get the vaccination rate even just for adults anywhere close to 70 percent (a milestone not reached until November 2021). Again, in theory, the Administration could have tried during the rest of this year to get something like the $1000 payment into either what became the bipartisan infrastructure plan (which is now law) or the Build Back Better initiative, which has ignited a bitter fight among Democrats that at this writing is yet to be resolved (Republicans signaled long ago that there would be virtually unanimous opposition in their ranks to BBB). Given the long list of “must have” programs in BBB and the limited means to pay for them, and the conflicts between the two wings of the Democratic party over these issues, it is understandable why the Administration or Congressional leaders would not have wanted to insert an expensive vaccination payment program into the mix.
Not only was the timing not right during these past 18 months for federal approval of vaccination payments but vaccine hesitancy seems to have hardened considerably over time. This despite the successive waves of the virus and climbing death toll from it, which in a rational world would have driven faster and broader vaccine take up rates. But, to the state the obvious, we are living in a highly politically polarized world where views on just about everything seem to be filtered through or determined by the color of your jersey, Red or Blue. This world we actually live in is far from rational.
My personal, reasonably informed speculation, of course, is that if something like the $1000 payment for vaccination idea had ever been implemented at some point after it was proposed, our current vaccination rate of 60 percent would be at least couple of percentage points higher, and deaths thousands lower. I’m not the only one believing this. Two people whose views I respect – and I submit readers should, too – also believed that payments of this magnitude would be effective: my long-time Brookings colleague, friend and outstanding journalist, Jonathan Rauch (
. ) and Greg Mankiw, an economics professor and author of the most widely used college economics textbook and a former Chair of the Economic Advisers (https://www.nytimes.com/2020/09/09/business/pay-people-vaccine-coronavirus.html. ).
Admittedly, because the pandemic is global and even travel bans cannot fully stop the virus from jumping country to country, had a one-time payment been highly successful in bringing the US to herd immunity from the initial COVID virus, it would not have prevented more transmissible variants, such as Delta and now Omicron (and who knows what’s next) from raising the herd immunity “bar” and thus continuing to infect Americans. But I believe fewer people would have been infected and died throughout these waves of the virus if the vaccination payment system had been in place all along.
Fortunately, and hopefully, we will eventually be able to find out how much it really would take to change the minds of many of the vaccine-hesitant, ideally enough to make a real difference for the health of whole country. The reason for hope is that multiple research efforts are under way around the world to develop a “universal” coronavirus vaccine, one that would address most of all conceivable variants, even including the common cold. Bloomberg Businessweek has a long article about this in its December 13th issue: https://www.bloomberg.com/news/features/2021-12-09/could-a-one-shot-coronavirus-vaccine-protect-you-from-all-variants. The article doesn’t give us a date when this will happen – it might never happen – but reports strong signs of encouraging progress. One non-profit organization in Oslo, the Coalition for Epidemic Preparedness is spending $200 million over the next five years on this effort, while the NIH in the US announced $36 million for research into the universal coronavirus vaccine this September.
I personally would like to see even more money devoted to this research, given the enormous health and economic benefits of it proving successful. This is especially true because, as the article highlights, the manufacturers of the two current mRNA-based COVID vaccines and boosters – Pfizer and Moderna – actually have no incentive to develop a universal vaccine: each of these companies makes more money from the “whack-a-mole” boosters that likely will be required to attack each specific variant than they would from a “one shot” universal vaccine.
There are additional uncertainties associated with the universal vaccine if it should arrive: its effectiveness and the longevity of the protection it would afford. Nonetheless, should the universal vaccine be developed and be anywhere as close to effective as the current COVID vaccines and the protection long-lasting, then it may finally be possible also to test how different levels of monetary payments (or even lotteries) could affect vaccine take-up rates – before the vaccine is made widely available, assuming that when it arrives the country is not currently in a pandemic emergency.
This “non-emergency” assumption is critical. If no emergency is at hand, then it would be ethically appropriate to conduct RCTs for different amounts of the payment so policymakers could then have some comfort knowing the risk-reward tradeoffs of different payment amounts. It is possible, of course, given the hardening of views about the COVID vaccines, or for that matter any vaccine, that payments of even $1000 per person for accepting the universal vaccine wouldn’t move the needle much on take up rates. I doubt that would be the case, but that’s point of the RCT: it would definitively tell us with reasonable precision (the larger the samples, the greater the precision) what the payment/response curve would look like.
Paying people to take a universal vaccine in a non-emergency also changes the calculus on how it should be financed. Deficit financing is appropriate during a true emergency, especially when national output and employment are falling, as was the case back in 2020. But in a non-emergency situation, payments are much more like a permanent investment in human and economic resilience. In principle, such investments should be financed with matching tax revenue (even if spread out over multiple years).
Some will object to having the government pay anything for the universal COVID vaccine, on any one of multiple grounds, including the precedent it would set for other expectations of payment for other vaccines. If we were living in the 1950s or even much of the 1960s when there was far greater national unity and trust in science and medical expertise than there is now, I would side with the objectors.
But alas, as much as many in our country want to return to that earlier era (though not for this reason!), those days are gone. We are where we are. And in today’s environment, and likely the political environment when the universal vaccine becomes available, we all will be better off at least knowing, with the kind of hard evidence than an RCT can provide, whether vaccination payments work, and if so, in what amounts. If the amounts are reasonable – say $1000 per person or less – and they make a real difference in a sampled population I, for one, would be ready to pay whatever (small) amount of additional, perhaps temporary, tax increase to finance vaccination payments for the entire country. I strongly suspect (hope) that a majority of Americans would agree.