A possible moral hazard problem in our vaccination program

“Right now, I really just want to take whatever vaccine is available.”

“I’m desperate to be protected and will take whatever comes first in my barangay.”

“I’m so glad I’m hypertensive – I’m now scheduled to get the vaccine this week.”


These are just some of the statements I’ve received from friends when asked about their views in the ongoing vaccination program for the coronavirus disease 2019 (Covid-19). By now, many of our senior citizens and folks with co-morbidities may have been inoculated with Covid-19 vaccines as local government units start rolling out the vaccination program. This activity is currently taking place in our fight against the virus. Not to burst any bubble here but with this scenario comes some risks which we should all be aware of.

I recently interviewed Dr. Tereso Tullao Jr, adjunct professor of the School of Economics of De La Salle University to get his perspective on the situation. While the vaccination program is definitely needed to help eradicate Covid-19 and achieve herd immunity, it does not come without any risks.

According to him, from an economic perspective, moral hazard is defined as exhibiting risky behavior due to the perceived feeling of security. One classic example is when applying for insurance. Once the insurance policy is approved, the policy holder becomes lax and is willing to take more risks simply because he is insured.

Tullao further highlights that the current vaccination program is potentially an example of moral hazard, specifically pointing to the Peltzman effect: once vaccinated, there is the feeling of being safe and protected without knowing that you can still get infected with the virus and in turn, infect others. This behavior can be attributed to the surge in the number of cases in other countries reported as people became complacent and started to not observe health protocols.

This is the identified risk that can be seen in the vaccination program that we should all look out for. If not addressed, this could cause further surge in cases, which we are all avoiding.

The call to action in this case is to ensure that we have a clear information dissemination campaign so that everyone becomes well-informed and aware of what happens once vaccinated. Sure, side effects are well described and documented and we should do the same in terms of what people can do and cannot do once vaccinated. The health sector should be transparent in telling people that even if vaccinated we’re not completely out of the woods just yet, and LGUs should align with this in terms of community quarantine guidelines imposed per city. In fact, all government agencies must align in terms of action so we do not risk experiencing any surge in cases due to Peltzman effect.

It is still critically important to be cautious and conscious in terms of observing the minimum health protocols and sustain the many other preventive ways we can continue to do as the country goes full throttle in its inoculation program. Until we achieve the herd immunity, we should all wait and stay put in bated breath.

Kay Calpo Lugtu is the chief operating officer of Hungry Workhorse, a digital and culture transformation firm. Her advocacies include nation-building, sustainability education and financial literacy. The author may be reached at kay.lugtu@hungryworkhorse.com

Source: https://www.manilatimes.net/2021/04/08/business/columnists-business/a-possible-moral-hazard-problem-in-our-vaccination-program/861171/