The Economics of Personalization in Prevention and Public Health

Abstract Personalized prevention uses family history and predictive genetic testing to identify people at high risk of serious diseases. The availability of predictive genetic tests is a newer and still-developing phenomenon. Many observers see tremendous potential for personalized prevention to improve public health. At the same time, the emergence of these new markets raises familiar health policy concerns about costs, cost-effectiveness, and health disparities. This paper first discusses an economic framework for the analysis of personalized prevention. On the demand side, consumers use personalized prevention as a form of information that allows them to make better choices about prevention, including medical care and health behaviors like diet and exercise. On the supply side, an interplay of complex market forces and regulations will determine the prices, advertising, and insurance coverage of predictive genetic tests. Beyond the question of whether health insurance will cover the costs of predictive genetic tests, there is a great deal of concern about whether consumers’ use of genetic tests might place them at risk of genetic discrimination or might lead to adverse selection. The paper also reports descriptive analysis of data from the 2000, 2005, and 2010 National Health Interview Surveys on the use of predictive genetic tests. The empirical analysis documents large socioeconomic status-related disparities in consumers having heard of genetic tests: for example, consumers with less schooling, Blacks, and Hispanics were substantially less likely to have heard of genetic tests. Evidence from other empirical studies provides little evidence that genetic testing leads to genetic discrimination in insurance markets. There is more evidence suggesting adverse selection, where genetic testing leads consumers to purchase long-term care insurance. The paper concludes with some preliminary thoughts about important directions for future research. The goal of the paper is to review relevant research to help develop an economic approach and social science research agenda into the determinants and consequences of genetic tests for prevention.