“During my Wall Street days, the individual was never talked about.” (For example, patients often don’t know how much a procedure at a doctor’s office costs ahead of time.) “That’s why I felt we had to drive this revolution where an individual had more of a say in health care.” , Anne Wojcicki, CEO, 23andMe

“Krugman’s anti private markets views on healthcare are completely wrong. Marketplaces like healthcare have become so “screwed up” precisely because they are not organized as free and competitive markets, where customers negotiate (transparent) fees for the services provided among lots of capable and competing providers. Because healthcare can have a catastrophic financial risk to consumers and because we want to provide lower-income individuals with subsidized health care, a free market for healthcare services has been horribly distorted by health insurance (both public and private). While consumer health insurance is a tremendous innovation and protection for all Americans, it has an important negative side-effect. The consumers of healthcare services don’t negotiate prices and make few healthcare payments that correspond (in any direct, material way) to the services received. In other words, because of the un-intended consequences of health insurance (both public and private), healthcare services in America are not a free and competitive marketplace.  The solution, in my view, is to continue to provide subsidized coverage to the poor and lower-income individuals and families (probably more directly and not “buried” in insurance rates, which distorts economic decisions) and catastrophic coverage to the rest, yet institute more of a free market system; where we inform consumers and they (or smaller groups of them) negotiate for their services and pay a percent of the cost (probably based on income and net worth) of the services they use. If we want cost-efficient, quality healthcare our government should be encouraging lot of private market competition and innovation. Startups (and other private firms) like 23andMe should be embraced. Yet today, firms like 23andMe are stifled by government bureaucrats and often unnecessary regulations.”, Mike Perry, former Chairman and CEO, IndyMac Bank

Weekend Confidential

Anne Wojcicki’s Quest for Better Health Care

The 23andMe CEO on the promise of genetics and the future of health care

By Alexandra Wolfe

Anne Wojcicki Winni Wintermeyer for The Wall Street Journal

Anne Wojcicki, chief executive of 23andMe, is determined to overturn the way traditional health care works in the U.S. It hasn’t been easy. Last year, the Food and Drug Administration shut down sales of her genetics company’s personalized health reports—one of its main sources of revenue. But Ms. Wojcicki (pronounced wo-JIT-ski) isn’t backing down.

It has been more than six years since 23andMe’s splashy appearance at the World Economic Forum in Davos, Switzerland. On their way out of the annual Google party at 3 a.m., heads of state and CEOs stumbled down the hallways of the Steigenberger Belvédère Hotel to be greeted by lines of 23andMe’s “spit coaches.” (The coaches got them salivating by asking them to imagine favorite foods: “Think of pizza, chocolate, french fries!”) In return, participants later got their own reports, with details like their genetic risk for heart disease and melanoma. Before the FDA stepped in last November, the company offered those reports to consumers for $99.

The FDA contended that genetic results aren’t always accurate and can mislead consumers. Officials feared that, without the supervision of a physician, users of the service might have unnecessary elective surgery based on inconclusive genetic information. 23andMe can still send ancestry information and raw data—lists of genetic codes that are indecipherable to nonscientists but could be sent for analysis to other health information providers.

Today, toned and tan and wearing a form-fitting gray dress, the 40-year-old Ms. Wojcicki is the picture of health. She’s adjusted her own lifestyle based on what she’s found in her genes. She says that she has a higher risk for breast cancer, so she doesn’t drink much alcohol, which could add to her risk, according to well-established research.

She knows that she’s a carrier for a rare disorder called Bloom’s syndrome—though her husband, Google co-founder Sergey Brin, isn’t, so their 5-year-old son and 2-year-old daughter didn’t inherit it. (The couple separated last year but have remained friends and see each other often with their children.) She also has a gene that makes her more susceptible to heroin addiction.

Her company is working with the FDA on getting its reports approved for direct delivery to consumers. Before the FDA’s warning letter, 23andMe had 550,000 customers. Now it has 700,000, though growth has slowed. Based in Mountain View, Calif., the 140-employee company has raised a total of $126 million from investors, including $50 million in the latest installment in December 2012.

Ms. Wojcicki’s ultimate goal is for people to be in control of their own health care. Part of that agenda entails getting more studies done on the connection between health and genetics. Motion sickness, for example, seems to run in families, she says, but there isn’t much research about it.

To that end, the company uses its genetic data (with customers’ consent) for research. It has published 16 studies in the past three years on its website, on topics ranging from Parkinson’s disease to allergies to nearsightedness. In 2012, 23andMe published a paper in the peer-reviewed journal BMC Medical Genetics showing that women with larger breasts had an increased risk for breast cancer. Ms. Wojcicki says knowing this kind of information will help consumers prevent disease.

Born in San Mateo County, Calif., Ms. Wojcicki became interested in science at a young age. Her father was a physics professor at Stanford University, and her mother was a schoolteacher. She graduated from Yale University, where she majored in biology, and worked on Wall Street investing in health-care companies for 10 years. She came up with the idea for 23andMe in 2006, a year before she married Mr. Brin.

“Biotech companies were always failing, so we did a lot of shorting of biotech,” she says of her days as an investor. At the time, she had been pessimistic about the state of health care until she started hearing about the growing field of genetics.

“I kept hearing about how robust the technology was and how cheap it was getting,” she remembers. “For the first time, we were actually going to be able to unlock all our genetic information at a massive scale.” Though deciphering the first human genome cost $3 billion, the price fell quickly and dramatically.

Yet the system was still geared toward institutions. “During my Wall Street days, the individual was never talked about,” she says. For example, patients often don’t know how much a procedure at a doctor’s office costs ahead of time. “That’s why I felt we had to drive this revolution where an individual had more of a say in health care.”

The field is starting to change, as evidenced by the rise of personal health trackers like Fitbit. Still, Ms. Wojcicki worries that patients don’t realize that they own their own data. “You own your tumor,” she says. “Part of our goal was to circumvent the whole system and say you actually own all the information, and you should make choices.” Knowing personal genetic risks for problems ranging from lactose intolerance to cancer will make it possible, she argues, for individuals to take more effective action.

Another problem, Ms. Wojcicki says, is that conducting studies aimed at prevention isn’t in the interest of the health-care industry. “The reality is [that] if you become diabetic, I can make money lots of different ways, but if you don’t become diabetic, I don’t make money off you,” she says, from the point of view of a pharmaceuticals company. “So who’s working on nobody becoming diabetic?” She says there is a disconnect between what the health-care system offers and what the individual wants. As a patient herself, “I found people making decisions for me hugely insulting,” she says. “I guess I’m just fiercely independent.”

Ms. Wojcicki remains optimistic about the future of the industry. “If we had all the data in the world, it would just totally revolutionize health care,” she says. “If the tech is actually cheap enough and electronic medical records are ubiquitous, you could see why you could just marry that.” Going forward, she thinks that this “explosion of information” will spur a growth in personalized medicine as patients and their doctors learn more about which therapies and drugs might work best for them.

She is heartened by the way the retail industry has begun to cater to consumers’ health, such as Wal-Mart adding health-care clinics to some of their stores. And when it comes to understanding genetics, “it would be an amazing thing if you went to the doctor, and the doctor was like, ‘Hey, you might be five years away from having diabetes or these other problems.’ ”

As Ms. Wojcicki wades through the FDA’s approval process, she’s focusing on new genetic research and getting her business back on track. “Our mission as a company has not changed,” she says. “Actually, we’re doubling down on it.”

Posted on June 30, 2014, in Postings. Bookmark the permalink. Leave a comment.

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