Bending the cost curve by making diagnostic advances a priority

Key Takeaway: The health care system spends 2% on diagnostic tests and 70% paying for treatments determined by those tests. Bending the cost curve means making diagnostic advances a priority.

Sue Siegel, GE Ventures and Kim Popovits, Genomic Health

Diagnostics is the neglected stepchild of healthcare, but developments in genomics, microbiomics, and metabolomics could change that status, as long as the diagnostics industry can get a fourth “omics”—economics—working in its favor, said Sue Siegel, chief innovation officer and CEO of GE Ventures, and moderator of the the last session at the Health Evolution Summit, a panel discussion called “Diagnostics Re-imagined: Leading an Era of Prevention.”

She observed that diagnostics represent 2% of total spending on healthcare, but the results of diagnostic tests steer treatment decisions that account for 70% of that spending. Despite the pivotal role of diagnostics, payers have often resisted covering new tests. “When a new therapy gets approved by the FDA, most reimbursement comes very quickly thereafter,” she said. “That is not the case in the diagnostics world.”

Diagnostics is too often an afterthought in discussions of precision medicine, even though there’s no precision without it.  “At any meeting that I’ve attended or presented at, if the entire meeting is not focused on diagnostics, then diagnostics is the last session,” said Mike Pellini, MD, managing partner of the venture capital fund Section 32 and former chairman of Foundation Medicine, Cambridge, Mass., a leading developer of genome-based tests for cancer. Compared with the attention given to therapeutic breakthroughs, “diagnostics is like being the best kid on that sixth-grade Little League team.”

But diagnostic breakthroughs can radically transform how illnesses are treated, said Kim Popovits, president and CEO of Genomic Health, Redwood City, Calif., a pioneer in creating tests to identify the unique genomic fingerprint of tumors. The company’s flagship Oncotype DX breast cancer test examines the activity of 21 genes in a patient’s breast tumor tissue to provide personalized information for tailoring treatment based on the biology of their individual disease. The test can predict the likelihood of chemotherapy benefit as well as the chance of cancer recurrence in early-stage breast cancer.

Mike Pellini, Section 32

Two recently published studies showed that the test changed chemotherapy recommendations in a significant number of patients with early-stage breast cancer. The test allowed more than 60% of the studied patients to skip chemotherapy, with its associated short- and long-term side effects, without adverse effect on their health and survival. Even more important, the test identified 23 patients who had initially been advised to skip chemotherapy even though it might potentially save their lives.

Popovits estimated that the test has so far saved the healthcare system more than $5 billion in unnecessary chemotherapy just for breast cancer patients alone. “We knew from clinical data that chemotherapy doesn’t work for most patients,” she said. “We knew that only four in 100 would benefit, but we were treating about 80% because we couldn’t know who the four were, and we didn’t want to deny women the possibility that chemo could help them.”

With the use of the test, oncologists can do a much better job of zeroing in on which patients will benefit. “We can clearly demonstrate the savings to the healthcare system and the impact we’ve had on cancer patients’ lives.”