Using Disposable Income for Genetic Tests

by Dr. Hsien-Hsien Lei
Posted May 6, 2008 in DNA Testing

The New York Times reported this past weekend that more people are having problems obtaining affordable health insurance. On top of the budget constraints people face during a recession, even those who are covered by employer health insurance have to deal with “some combination of higher premiums, less extensive coverage, and bigger out-of-pocket deductibles and co-payments.” This means that many skip routine check-ups and avoid seeing the doctor unless absolutely necessary.

The majority of U.S. tax payers this year will be receiving several hundreds of dollars in tax rebates. Here’s what people plan to do with the money according to a survey by the NPD Group :

• 42% would pay bills
• 21% would put the money into savings
• 12% would spend the money on discretionary items

How does this affect the potential market for genetic services? If people can’t even afford to pay for necessary maintenance medication, eye glasses, or diabetes test strips, how do personal genomics companies expect to expand their market for elective health services? And yet, direct-to-consumer genetic testing is more widely available in the U.S. than in any other country.

Where socialized medicine prevails in countries such as the UK, Singapore, and Iceland, it seems that people would have more disposable income to spend on optional healthcare. It would be interesting to see the uptake of personal genomic services in countries other than the U.S. although culture and legalities would be important factors as well. For example, are Icelanders more interested in and willing to spend money on personal genomics given that one of the more successful personal genomics companies, deCODE genetics , is based in Iceland and has published studies closely examining its citizens?

Eventually, personalized medicine incorporating genetic information will become a fact of life. At that point, genetic testing will be routinely covered by insurance as with any other laboratory test or become a hidden cost when pricing pharmaceuticals, i.e., a pharmaceutical company would cover the cost of a genetic test in order to determine type and dosage of a particular medicine. For now, however, it seems that it would be hard for most people to justify spending any of their disposable income on genetic tests or scans unless family history or other known medical conditions alert them to the need for extra information and vigilance.

How are you using your disposable income?

(5 comments)

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5 Comments

Comment by NA

2008-05-06 20:20:09

I’ve said it enough times already. People don’t have $1,000 sitting around to be spent on a genetic test.

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Comment by Steven Murphy MD

2008-05-06 21:01:43

It is certainly odd Hsien. We are seeing more and more patients, despite the economy. I think it is because we actually get referrals from physicians who think our services are important. I don’t see too many physicians saying…”Go get that SNP scan so I can know how to practice medicine” But hey, you have to start somewhere.

-Steve
http://www.helixhealth.org

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Comment by NA

2008-05-07 15:18:53

Dr. Murphy, I think a lot has to do with marketing more so then anything else. The service can be there, but if nobody knows that the service is there, the service won’t be used.

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Comment by Steven Murphy MD

2008-05-13 23:54:21

Please call me Steve.
So do you think Navigenics is doing a pretty bad job of marketing? What about 23andMe?
-Steve
http://www.helixhealth.org

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Pingback by How To Make Money Selling Personal Genomic Services

2008-05-08 09:34:42

[...] always thought having a bigger market is the key to success (as I alluded to in my previous post, Using Dispoable Income for Genetic Tests). There is, of course, another way of increasing company profits as Steve Jobs demonstrated with [...]

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