Precision Medicine Initiative

[icon name=”user” class=”” unprefixed_class=””]  Perry McLimore, MD., JD.

President Barack Obama, during his State of the Union address on January 20, 2015, stated:

Tonight I am launching a new Precision Medicine

Initiative to bring us closer to curing diseases like

cancer and diabetes-and to give all of us access to

personalized information we need to keep ourselves

and our families healthier.”

Precision medicine is disease treatment and prevention based on the individual’s variability in genes, the environment, and lifestyle.i Precision medicine is not new. It has evolved since the development of human genome sequencing, cancer-gene investigation, and the implementation of methods to analyze massive amounts of data.

Precision medicine has become an important component of some cancer treatments.ii All cancers are not created equal. Some cancers express or do not express certain genes or gene mutations. Depending on the patient’s genomic profile of his or her cancer will guide treatment, especially chemotherapy.

The Precision Medicine Initiative proposes to build on personalized medicine in the treatment of cancer, as well as, start to build data sets for other diseases such as diabetes, cardiovascular disease, and substance abuse.

The President’s 2016 budget will provide 215 million dollars to start the initiative.

  • 130 million dollars to the National Institutes of Health (NIH) to assemble a national research cohort of one million individuals or more. Each person will contribute genetic material (DNA), environmental facts, and lifestyle characteristics to a database that researchers can access.

  • 70 million dollars to the National Cancer Institute (NCI) to boost progress of precision medicine in the classification and treatment of cancer.

  • 10 million dollars to the Food and Drug Administration (FDA) to set up quality databases to work from.

  • 5 million dollars to the Office of National Coordination for Health Information Technology (ONC) to develop interoperable standards that ensure privacy and the easy exchange of data.

In theory, precision medicine can increase overall efficiency using

proven medications and other treatments, prevent harmful or useless drug interactions, and reduce costs associated with healthcare by eliminating unnecessary treatments.

Problems with Precision Medicine

The Genomic Analysis

The ideal genetic test would process 100% sensitivity and 100% specificity. Such a test would need to be clinically actionable and provide the doctor with information not otherwise clinically evident. Very few genetic markers possess such characteristics. More than likely the presence of a DNA mutation raises only a slight increase of contracting the disease or having a different response to a therapeutic drug.

Gene scores have not been proven useful in complex cardiovascular diseases, including diabetes where there exist gene-environment interactions. Lifestyle interventions have proven effective. Physical activity and diet versus genetic factors possess a bigger effect on disease risk.

Scientists often disagree concerning the importance of genetic variants. When a patient agrees to have his or her DNA analyzed, the doctor may ask the lab to examine specific genes. Once the gene is sequenced, is the mutated gene significant or not? Only a few mutations are clearly defined such as the BRCA1 gene in breast cancer. So two physicians or scientists looking at genetic variants may have varying opinions on the gene’s significance and whether it is worth pursuingiii.

Recording and Transfer of Data

To work, integrated genomic and clinical data will need to be available to physicians and scientists that can be searched and classified. Whole genomic sequencing on tumor samples has been carried out by the International Cancer Genome Consortium (ICGC) on 14,000 patients. ICGC has identified 13 million mutations in these cancer patients. What will be the number for one million patients? In addition, not just the genome needs recording. Clinical characteristics of each patient need to be included.

Clinicians now record 20 to 50 measurements regarding patients in their electronic health records. Genomic data present a whole new level of complexity. The Cancer Genome Atlas is a U.S. project started in 2005 to record DNA mutations that drive cancer. They have 2.5 petabytes of data (a petabyte is 1,000 terabytes). It would take 25 days to transfer their data to another computer server.

We seem not to be able to create interoperative data between the various electronic data systems employed in hospitals and doctor’s offices. To work, the genomic and clinical data must be available to most physicians and all scientists. It will take a massive effort to make all the information that the Precision Medicine Initiative wants to create presentable to all researchers and health care providers desiring to access it.

In addition, keeping the personal health information present in the system confidential and safe from hackers will require a full-time staff of IT security specialists. So many physicians and research staff will need access to the data that the likelihood of a breach is high.iv

Precision Medicine and the Affordable Care Act

Currently, precision medicine is costly. Annual costs of treating cancer patients with targeted therapies generally exceed 100,000 dollars and most extend the patient’s life by months.v

The Patient Protection and Affordable Care Act (PPACA) is attempting to hold medical spending down and make reimbursement for health care based on value rather than fee-for-service.

The government is pushing for alternative payment methods (APMs) to provide the public with medical care. Three APMs are at the forefront: accountable care organizations, patient-centered medical homes, and bundled payment systems. The regulatory and financial systems that support precision medicine in APMs are not formulated. There must be care payment structuring and delivery methods recognizing the importance of precision medicine to make sure patients have access to it, and investors are capable of funding any development.

Alternative Payment Methods

The PPACA has a goal of making 30 percent of traditional fee-for-service payments in Medicare attached to quality or value APMs by the end of 2016 and 50 percent of payments via APMs by the end of 2018.

APMs, if set up correctly, could improve health care coordination and outcomes while controlling costs. However, if structured inappropriately, APMs could cause unintended measures that would limit access to necessary services and medicines. Policymakers and stakeholders (physicians) of APMs will likely confront a crossroad between the new payment systems and evolving clinical changes that precision medicine will bring.

The most prominent APMs are:

  • Accountable care organizations (ACOs): a group of physicians contract together to utilize shared saving’s incentives for an assigned group of the population.

  • Bundled payments: the insurer pays all the providers (hospitals and doctors) a set, known amount for a specific condition or procedure.

  • Medical homes: care coordination by a primary care practice.

Accountable Care Organizations

There is governance from a variety of physicians who manage and coordinate care for a specified group of patients. Providers form legal entities with other providers and are held accountable for the quality and cost of medical care for that group of patients. The ACO is given a target spending benchmark based on the historical cost of their Medicare population. The providers can earn “shared savings” based on the amount of health care spending below the benchmark they attained for that Policymakers want to make the ultimate goal for ACOs to receive a set payment for each patient rather than fee-for-service (full capitation). This payment is an assigned dollar amount per patient no matter how much medical care that patient received that year.

Under this system, it is easy to envision a possible conflict of interest. Personalized medicine is expensive and, although the possibility of higher quality of care exists, the ACO model could limit access to the new treatment programs. Such makes quality measurement crucial as a safeguard for patients, a guiding light for providers, and an essential factor for policymakers and bean counters.

There are quality benchmarks in Medicare ACOs. If an ACO failed to meet these quality standards, then the ACO cannot earn any shared savings for that year. However, if the precision medicine treatment is not included in the quality measurements, how much guarantee that the composition of quality benchmarks is enough to overcome the financial incentives of not enrolling the patient in personalized medicine? Precision medicine technologies without overwhelming evidence and years of use are less likely to be utilized by providers.

Bundled Payments

A bundled payment is a single payment to hospitals and doctors (jointly to both) to treat a given condition or provide a specific treatment or procedure. It is limited to one episode of care to an individual patient.

If costs of the episode are less than the bundled payment, the providers keep the savings. On the other side, if the cost goes over the bundled payment amount, the providers are accountable for the loss.vii

In February 2015, Medicare started a new initiative called the Oncology Care Model (OCM). Its goal is to deliver better cancer outcomes at a lower cost. OCM is an episode-based bundled payment for six months following the patient’s start with receiving chemotherapy.

OCM highlights the role of clinical guidelines in APMs. OCM asks the physician to follow National Comprehensive Cancer Network or American Society of Clinical Oncology (ASCO) guidelines. These guidelines do not account for the patient’s unique characteristics and are one-size-fits-all. Changing incentives cause provider behavior to lean towards lower cost pathways.

Treatments are constantly changing and developing. This system makes change, including precision medicine technologies, less flexible when utilizing clinical protocols. Bundled payments rarely contemplate costs beyond a 30 to the 90-day period. In determining the value in significantly reducing the recurrence of cancer in the patient, the cost savings may be over years. Precision medicine that changes the paradigm is suited to be measured over a long time frame.

In summary, hoping to develop a more patient-centered health care system, employing a payment model of one-size-fits-all could have very limiting effects on the delivery of innovated treatments that precision medicine makes up.

Medical Homes

Patient-centered medical homes (PCMH) are accountable for meeting the overwhelming majority of each patient’s health care needs. Such includes preventative, acute care and chronic care. The PCMH delivers services to patients through both in-office and remote mechanisms. Such includes 24/7 access to a member of the medical team, e-mail, and telephone care.viii

Although PCMHs are focused on case management and access to primary care, they might have a slight impact on precision medicine considering the role of the primary-care physician who is the gatekeeper of diagnostic tests that are performed.ix

Clinical Pathways

In APMs, clinical pathways are becoming more common. Certain pathways may incentivize doctors to choose one therapy over another based on its availability or one that is favored by the patient’s insurance coverage. Typically, preference for a clinical pathway is dependent upon evidence-based research. Precision-based pathways must regularly be updated and cost much more money. In addition, multiple studies of clinical pathways suggest they offer slowed cost growth, reduced the frequency of unnecessary treatments and avoid making outcomes worse. Precision medicine rocks the clinical pathway’s boat. In personalized medicine, only patients with a particular genomic profile will be the targeted population for one particular therapy, and the subset of patients will change as clinical evidence becomes available.

Clinical pathways focus on one-time savings. There are potential clinical pathways that could constrain the ability of patients and providers to enroll in the most recent targeted treatment options. Clinical pathways are based on broader population studies and risk missing opportunities to target treatment due to the patient’s genomic findings. The level of evidence required to justify the use of precision medicine is likely to take more effort and time.

Quality and Costs in Alternative Payment Methods

Precision medicine can represent life-altering improvements. However, the incentive to institute the personalized medicine paradigm is lacking when providers are evaluated or penalized for health care spending. The model of saving money in a particular time frame may be appropriate for services and procedures that have been around for a long time, but this model fails when new technologies and therapies exist that could drastically improve the quality of life for certain individuals.

In the ACO’s shared savings programs, providers are evaluated on clinical outcomes for conditions like heart failure and diabetes. Quality metrics is not in place for medical conditions that require costly treatment. With these diseases, ACOs may have incentives to strive for cost reductions without monitoring quality indicators.


Precision medicine is ideal. The ability to more accurately diagnose, prevent, and cure many diseases is laudable. Especially in cancer medicine, successful sequencing of the human genome has led to more targeted therapies for cancer patients. Currently, there are thousands of mutations associated with one form or the other type of cancer. Discovering which mutations are significant and which are not will require amounts of lab and clinical research.

Storage of such information will be massive. Working out an interoperable system allowing physicians and researchers easy access to the data must be developed. Confidentiality must be maintained.

With the PPACA pushing for more APMs and cost containment, policymakers will have to make choices in the coming years to embrace patient-centered health care. Will congressional budget constraints slow the ability to adopt new treatment innovations and technologies?

Precision medicine will not quickly lower the cost of medicine. Patient-centered health care is expensive, and the research needed will require extensive funding. Starting a precision medicine initiative now is starting on the ground floor. There are massive hurdles to jump and new technologies to be formulated.

The U.S. will spend upward towards 3 trillion dollars on health care this year. Allocating 215 million dollars for the project is a proverbial drop in the bucket.

Besides, the hypothesis behind precision medicine is by collecting an extensive data collection by assembling much genetic and clinical information on a cohort of patients, then employing high-tech analytics to examine this massive database, hoping certain subgroups will appear. Such is a hypothesis with little real evidence to support it.


i National Research Council. “Toward Precision Medicine Building a Knowledge Network for Biomedical Research and a new Taxonomy of Disease.” National Academies Press, Washington, DC.

ii Abrams J, Conley B, Mooney M, et al. “National Cancer Institute’s Precision Medicine Initiatives for the new National Clinical Trials Network.” Am Soc Clin Oncol Educ Book, pp. 71-76, 2014

iii De Bono J, Ashworth A. “Translating Cancer Research into Targeted Therapies.” Nature, 467:543-549, 2010.

iv Joyner M, Prendergast F. “Chasing Mendel: Five Questions for Personalized Medicine.” J Physiol, 592:2381-2388, 2014.

v Garraway L, Verweij J, Ballman, K. “Precision Oncology: An Overview.” J Clinical Oncology, 15: 1803-1805, 2013.

vi Emanuel E. “Why Accountable Care Organizations are not 1990s Managed Care Redux.” JAMA, 307(21): 2263, 2012.

vii Health Care Incentives Improvement Institute, “Bundled Payment Across the U.S. Today: Status of Implementation and Operational Findings.” retrieved August 5, 2015.

viii U.S. Department of Health and Human Services for Healthcare Research and Quality. “Defining the PCMH.” retrieved August 7, 2015.

ix Sprandio J. “Oncology Patient-Centered Medical Home.” Journal of Oncology Practice, 8(3): 47-49, 2012.