On the $1,000 Genome and the Future of Health Systems

by Reihan Salam

Ezra Klein has a post on the advent of  the $1,000 genome, arguing that it has the potential to destroy the private insurance industry. The argument makes a good deal of sense: if insurers can have some reliable way of knowing your risk factors for developing various expensive maladies, which is still insanely difficult but there’s no question that we’re closer now than we were a decade ago, the result would be an “adverse-selection death spiral.” Back in 2009, I wrote a column that pivoted off of a really good 2007 column by economist Stephen Cecchetti which argued that the genomics revolution made single-payer inevitable. At the time, I argued that while the genomics revolution didn’t make single-payer inevitable, it would push health systems in the advanced market democracies towards a more coherent system for protecting against chronic illnesses and catastrophic medical expenditures, like the system outlined in Harold Luft’s Total Cure. Greg Mankiw has also discussed the potential impact of the genomics revolution, and a friend of mine is currently pursuing research that is very salient to this broader set of issues. When I advanced the idea of a public backstop rather than single-payer, I was pleased to see that Donald H. Taylor Jr. was broadly sympathetic to my take.

Razib Khan, my go-to writer on these matters, adds the following:

Biological information technology will hyper-charge correlational science. From the cloud one can extract out patterns of elevated cancer risk, conditional on genetics, location, and lifestyle. Correlations of particular genomic features with purchasing habits will naturally fall out of the information stream. Data will reveal your risk based on exactly where you live, while controlling for genetic background. Currently medical trials runs into thousands of individuals, with coarse assessments of confounding variables. The new information cloud will increase the sample size to millions, and instead of self-reports it will be able to track confounds in real time!

You may wonder what this has specifically to do with the $1,000 genome. In many ways, modern genomics has been one of the first fields where such mass agglomerations have data have become the norm. Many techniques out of genomic science will be leveraged more generally across our lives. The Human Genome Project will be less relevant over the long term than the broader set of skills and methodologies that emerged out of it, and which became necessary for a whole generation of biologists. The $1,000 dollar genome will arrive within the next year or two, but the milestone will be forgotten soon enough. Rather, it will be a flag which heralds the birth of a new information age, when gray silicon and red goo merge together, as as the prefix bio on biotechnology starts to become archaic.

That is, the $1,000 genome will accelerate the growth of a broader innovative ecology that will transform medicine. Razib, incidentally, is a rare right-of-center supporter of single-payer health systems, and I’d love to hear his thoughts on the subject.

The revolution Razib evokes, which is to say the emergence of disruptive (i.e., low-cost, fast-improving) medical technologies, could deliver much cheaper medical care. But this might actually require some level of cost-consciousness on the part of the public. If cartelized medical providers can keep prices high even as the cost of care collapses, they will presumably do just that. The question is how to mitigate the power of the cartel. Some believe that governments should use their purchasing power to negotiate down prices. Others believe that we need an open, innovative marketplace and cost-conscious consumers to drive down prices. And then there are those — enthusiasts for the Swiss or Singaporean health system for example — who support some combination of both.

The Agenda

NRO’s domestic-policy blog, by Reihan Salam.