Hospital and health system leaders are inundated with headlines and reports maintaining that precision medicine profitability should be a long-term goal. But evidence suggests otherwise, so plan accordingly.
For hospital and health system leaders who are considering launching a precision medicine program-or stepping up their investment in an existing program-it may be easy to become dissuaded from jumping in when they read the headlines. Consider:
- In May, Healthcare Finance posted the article, “Precision medicine: Barriers to investment.” The take: “Precision medicine is a subject that keeps coming up when financial leaders plan their hospital capital investments. CFOs, and others, know a change is coming and they don’t want to make millions of dollars in technology investments that could become obsolete in 5-10 years…”
- In another May article, “Providers and precision medicine: Are you Ready?,” Healthcare Finance also declared: “The promise of personalizing care is enormous but it will also require hefty investments to turn it into a reality.”
- The Harvard Business Review in March 2018 published, “Will Personalized Medicine Mean Higher Costs for Consumers?” Here, they urge consideration of alternative payment models, lest precision medicine advancements are rendered unaffordable to patients. This calls into question whether outcomes would really improve in real-world scenarios.
- And in a podcast produced by the University of Utah Health back in 2015 titled, “Is the Precision Medicine Initiative a Good Investment,” Willard H. Dere, MD, FACP, Executive Director of the Program in Personalized Health and Co-Director of the Utah Center for Clinical and Translational Science, said: “We have a higher calling…. Whatever we spend and whatever we do needs to serve the public.” Sometimes stating the noble goals of precision medicine implies that profitability is a long way off-or may never be attained.
It’s enough to make hospital and health system executives think twice about moving forward with a precision medicine effort, or at least giving in to the fact that profitability is a distant pipedream.
Not so fast, says Elke Nelson-Nichols, PhD, Director of Strategic Initiatives at ECRI Institute. It is quite possible to realize a return on investment from a precision medicine program fairly quickly.
As Nelson-Nichols notes in “Setting the Foundation for a Best-in-Class Precision Medicine Program,” a new White Paper from the Precision Medicine Institute (PMI), “Consider the organization that has an unregulated, nonsystematic test development and ordering process. It is likely that this system is dogged by inappropriate test ordering and utilization. Transitioning to a regulated precision medicine program can save millions of dollars in unwarranted costs from unreimbursed and under-reimbursed testing.”
Elke Nelson-Nichols, PhD (above), Director of Strategic Initiatives at ECRI Institute, cites a study published in Genetics in Medicine to draw conclusions about the short-term ROI of implementing a genetic testing program.
(Photo copyright: Elke Nelson-Nichols, PhD.)
To make her point, Nelson-Nichols cites a study published in Genetics in Medicine that found implementing a genetic testing program that included test review and a consultative service significantly reduced test misorders. Investigators reviewed 629 molecular tests ordered at Stanford Health Care in 2015. They looked at misorders before and after implementation of a utilization management program and found that genetic test misorders dropped to 3% by the end of the year from 22% at the beginning.
Nelson-Nichols urges hospital leaders to consider how a program can minimize suboptimal care, including anxiety and harm associated with inappropriate follow-up diagnostics and potentially unnecessary or incorrect treatment strategies.
Additionally, Nelson-Nichols notes in the PMI White Paper that other initiatives can help realize ROI more quickly, including data monetization, program sponsorships, medical research grants, and new types of healthcare industry and philanthropic partnerships.
Food for thought the next time you and your team think precision medicine’s rewards cannot be reaped in the short term.
-Dean Celia
Related Information:
Precision medicine: Barriers to investment
Providers and precision medicine: Are you ready?
Will personalized medicine mean higher costs for consumers?
Is the precision medicine initiative a good investment?
Promoting appropriate genetic testing: the impact of a combined test review and consultative service
Setting the Foundation for a Best-in-Class Precision Medicine Program