When the mapping of the human genome was completed, the fanfare surrounding it initially led many to believe all kinds of medical problems would be solved overnight. Insurers eye costs
of genetic advances
By Lyn Danninger
ldanninger@starbulletin.comIt also got health care providers and insurers worrying about who would pay for the advances in treatment the public would begin demanding.
But according to Jonathan Edwards, a senior research analyst with Gartner Research, health care won't be turned upside down anytime soon by genome-related advances. But pressure is already being put on the industry to come up with cost-benefit analyses to handle these developments.
Edwards was in Honolulu last week speaking to health care industry officials. He said those who provide and pay for care need to begin developing an effective strategy for determining the cost effectiveness of genetic tests, prepare to tackle the array of new drugs that will begin entering the market and develop information technology systems that can collect and manage all the new data.
Edwards said there is little doubt that new treatments coming on to the market will force an increase in health care spending in the short and medium term. By 2010, the nation will spend an estimated $2.6 trillion dollars on health care, he said.
Genomic-related treatments will initially exacerbate health care's three biggest problems -- access, quality and cost, he said. But eventually, the promise of the new treatments can reduce health care costs, so it will be in the interests of insurers to pay for some development, he said.
Pharmaceutical companies will charge more for the new range of targeted drugs -- especially if the drug is only suitable for a small group of people. With higher research and development costs for smaller populations, it's likely pharmaceutical companies will concentrate on areas where drugs will be used by large numbers of people.
Given the predicted jump in health care costs, large private insurers are already looking at ways to precede when new genetic-related treatments become available.
"We have put together various groups to look at issues happening now and down the line," said Fred Fortin, vice president of local insurer Hawaii Medical Service Association.
"I don't think the revolution is here but we are feeling the first wave already in the types of genetic screening already available," he said.
The efficacy of what is being offered to patients will have to be determined and standards developed, he said.
All of that will happen over time and eventually will merge into existing standardized medical practice, Fortin said.
But in the meantime, determining what is appropriate care will be one of the single biggest challenges faced by the health care industry, he said.
