How Much is the Value of Genomic Test Information? Evidence from Post-Cardiac-Stent Care Decisions

Posted: 7 Nov 2017 Last revised: 7 Dec 2017

Kellas Cameron

Boston University - Department of Operations and Technology Management

Nachiketa Sahoo

Boston University - Questrom School of Business

Nitin Joglekar

Boston University - Questrom School of Business

Jugnu Jain

Sapien Biosciences

Date Written: October 31, 2017

Abstract

Personalized medicine aided by new genomic and molecular diagnostic technologies can improve the quality of care. However, these new technologies are often expensive and the value they offer to any individual patient are uncertain. We propose a data-driven approach to identify patients who would benefit the most from these new diagnostic technologies in the specific context of cardiac stent surgery. Our approach is based on a structural econometric model of how physicians choose medication by balancing various risk factors. We estimate the proposed model from a dataset containing patient attributes, physicians’ choice of medications, and test results of 427 stent surgery patients, 175 of whom received a new genomic test. The estimated model reveals that patient’s medical and socioeconomic conditions play a significant role in the physician’s choice of medication after the surgery. Through out-of-sample prediction on a set of matched parallel patient groups — one receiving genomic testing and the other not — we show that our proposed model can be used to estimate the value a patient will receive from such testing based on patient attributes more accurately than existing popular statistical models. Policy simulations show that identifying and testing of the patients likely to benefit the most can reduce the patient disutility by 7.6% and provide benefit from the test sooner to those who need it the most. Finally, we show that the model can be used to design a revenue-neutral subsidy for those at low socioeconomic status to further reduce the population disutility.

Keywords: Value of Information, Structural Econometric Model, Evidence Based Medicine, Genomic Testing, Personalized Medicine, Healthcare Information Systems, Predictive Models

Suggested Citation

Cameron, Kellas and Sahoo, Nachiketa and Joglekar, Nitin and Jain, Jugnu, How Much is the Value of Genomic Test Information? Evidence from Post-Cardiac-Stent Care Decisions (October 31, 2017). Available at SSRN: https://ssrn.com/abstract=3064518 or http://dx.doi.org/10.2139/ssrn.3064518

Kellas Cameron

Boston University - Department of Operations and Technology Management ( email )

United States

Nachiketa Sahoo (Contact Author)

Boston University - Questrom School of Business ( email )

595 Commonwealth Avenue
Boston, MA MA 02215
United States

HOME PAGE: http://people.bu.edu/nachi/

Nitin Joglekar

Boston University - Questrom School of Business ( email )

595 Commonwealth Ave
Boston, MA 02466
United States

Jugnu Jain

Sapien Biosciences ( email )

1st Floor, AIMSR Building
Hyderabad, Jubilee Hills 500 096
United States

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