Precision Medicine’s Persistent Bottleneck: Reimbursement


Payors have demonstrated reluctance to reimburse certain genomic diagnostics, and even when they do there’s a disconnect between a test’s reimbursement rate and its value. Policymakers need to reform the pricing of diagnostics tests and establish evidence standards for clinical utility which all stakeholders—diagnostics manufacturers, public and private payors, and physicians—can agree to. By Joshua P. Cohen

Precision medicine can help move the healthcare system away from a trial-and-error method toward a targeted, personalized approach for making clinical decisions. This can lead to improved health outcomes and a reduction in unnecessary treatment costs.

Genomic diagnostics hold the keys to personalizing medicine. However, payors have demonstrated reluctance to reimburse certain genomic diagnostics, and even when they do reimburse there’s frequently a disconnect between the test’s reimbursement rate and its value.

Diagnostics of all kinds account for less than 5% of reimbursable healthcare costs while guiding nearly two-thirds of clinical decisions. Nonetheless, genomic diagnostics in particular face the dual challenges of proof of clinical utility and alignment of price and value. In many instances, these challenges have not been met, which is preventing precision medicine from reaching its potential.

A Question of Clinical Utility

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