May 25, 2012

Is it worth $61 per year?

The price tag attached to sequencing a human genome is likely to decrease to a level comparable to other complex clinical tests such as computed tomography (CT) scans, which cost around $1,000.

In an excellent article appearing together with the publication I discussed last week, Isaac Kohane and Jay Shendure argue that the cost of whole genome sequencing per year is only $13, and that any health benefits derived from it that are worth more than $13 per year would therefore make sequencing a good investment. They arrive at $13 by dividing the $1,000 that sequencing someone may cost by the life expectancy of the average American, which is 78 years.


However, this does not take into account all the other things you could do with the $1,000 you spend on sequencing, like investing it. Corrected for that, the real cost is more like $61 per year.

It is not at all obvious that for most people, and for the foreseeable future, the best way to spend $61 a year will be to get sequenced. For the same money, you could get a lot of other regular checkups that have a greater utility.

In any case, my calculation may be besides the point: Right now, it is unclear whether having your genome sequenced and analysed will eventually cost the same than a CT scan, or a multiple, or a fraction of that.

How do I arrive at $61 per year?

Like Kohane and Shendure, I assume that having your genome sequenced and analysed in a meaningful way will be around $1,000. Investing this money at a conservative rate of 6% after inflation for 78 years, which is the life expectancy of an average American, means that the equivalent of $1,000 now is $61 (plus inflation adjustments) for the next 78 years, and not $13.

2 comments:

  1. For $61 you can get "a lot of regular checkups"? Really? I've switched to a high deductible plan coupled with an HSA. One of the advantages (at least from my point of view) is that I can see what healthcare really costs. I don't think I've run across anything (including simple blood tests) that costs as little as $61. It may be cheaper if you have insurance with a low copay, but that's not the 'real' cost - you're paying for it in higher insurance costs.

    That said, sequencing may not yet be that economical. Plus, just because you get sequenced once for $1000 (and hopefully considerably less in the future), the interpretation will still cost something extra on top of that. But I bet it won't take long (<10 years is my guess) before this is a no-brainer.

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  2. Hi Shawn,

    Thank you for your comment.

    I don't have a lot of examples of checkups that you can get for $61.

    However, in Europe at least, there are simple medical examinations (e.g. inspection of suspicious moles) that cost less than that when you pay for them privately.

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