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How can personalized medicine improve the use of health care dollars?

June 16, 2015

The Personalized Medicine Coalition (PMC) has recently released an important and informative white paper discussing how to achieve a balanced approach to the adoption of personalized medicine technologies that reflects the pressures on healthcare spending, improving patient outcomes and fostering innovation. The paper highlights two unique challenges that personalized medicine presents when considering payment models:

  1. The potential of personalized medicine to shift care into a more proactive model of reducing the severity or even preventing disease – payment models must take into account the full value of such outcomes.
  2. How a payment system can recognize “the incremental value of these personalized therapies as more information becomes available as to their effectiveness.” Targeted therapies and companion diagnostics “may not be fully personalized at the time they are first approved” – there may emerge specific subpopulations for which a treatment or diagnostic is most useful. Payers must find ways to encourage continued analysis of the optimal use of a technology that maximizes the use of healthcare resources while rewarding the providers.

As the U.S. considers “alternate payment models” (APMs) in its efforts to reform healthcare delivery and manage costs, the PMC paper points out that “APMs and personalized medicine both hold significant potential to contribute to better, higher value, more individualized care.” The PMC undertook to review APM options in order to avoid “unintended consequences that could limit access to vital services and medicines.”

Policy makers in the U.S. are not alone in seeking to reform healthcare to improve patient access and outcomes while controlling costs. Ontario’s “Patients First: Action Plan for Health Care” drives at the same objectives. Yet at the same time the field of personalized medicine is making dramatic progress in making health care “personalized, precise, preventative and participatory” as Leroy Hood describes it, with rapid advances in DNA sequencing technology, targeted therapeutics and molecular diagnostics. Key to the successful application of emerging personalized medicine technologies will be to recognize and reward the unique value propositions they offer. The PMC paper is an informative discussion of this challenge and one that Ontario policy makers should find helpful.

By: Kathryn Deuchars, Director, Ontario Personalized Medicine Network