Genetic Testing Potential Impact on HR

By Andrew R. McIlvaine

Last summer, scientists at the National Human Genome Research Institute grabbed the world's attention by announcing they'd completed a "rough map" of the human genome.
This meant that after spending years in research and tens of millions of dollars in federal and private-sector money, they were now close to finally unlocking the secrets stored within the 23 pairs of human chromosomes, thereby gaining a working understanding of the basic blueprint of all human beings. They were also on the verge of identifying the genes responsible for diseases such as Alzheimer's, heart and respiratory problems and other common afflictions.

How the completion of the Human Genome Project eventually impacts medical science remains to be seen. The possibilities are huge, according to experts, who list among them the eradication of all diseases through the early detection of their genetic causes and the secrets of life revealed.
In the business world, the breakthrough leaves a different, more tenuous set of unknowns: How will this groundbreaking discovery affect employers, and what will its impact be on rising health-care costs?

To date, no firm answers are available. But speculation is rife. At least one health-care consultant predicts that genetic testing will lead to a dramatic increase in medical costs. Meanwhile, a large number of states have sharply restricted the availability of genetic information to employers, while moves are afoot in Congress to extend such restrictions to the national level. In effect, while the field of genetic testing may appear to be a blessing for society at large, it could prove to be more of a curse for employers.

Guarding Information
Despite the potential of genetic testing to identify and prevent diseases, many people remain uneasy about the concept.

"Biological innovation is supposed to be the next revolution of this millennium, but many people are scared of it," says Jeremy Gruber, a legal expert with the National Workrights Institute, a nonprofit organization based in Princeton, N.J. "If we don't see adequate protections put into place, we're not going to see the biological revolution we've been promised because people will be afraid to participate."

Recent polls support Gruber's assertion. A CNN/Time magazine survey conducted last summer found that almost half the respondents said the mapping of the human genome will have negative consequences, while 80 percent said insurance companies should not have access to genetic information. The Journal of the American Medical Association has reported that 57 percent of women whose family history suggested they may be at risk for breast or ovarian cancer refused to take a genetic test because they feared reprisals from their insurance companies or their employers.

Such fears are not entirely unfounded. According to a 1996 Georgetown University study of 332 families belonging to genetic-disease support groups, 22 percent said they had been refused health insurance, and 13 percent said they had been fired from their jobs due to their genetic status.
Mark Rothstein, director of the Health Law and Policy Institute at the University of Houston, says such discrimination is not only unfair, it is often pointless because genetic tests reveal only a person's predisposition to contract a certain disease, not the actual presence of the disease itself.
"Having a genetic 'marker' for a disease does not mean you are going to get the disease, it only means you're at an increased risk of getting it, which means many of the people denied jobs or insurance because of it will never actually get sick," he says.

Discrimination on the basis of genetic information hurts society as well as individuals, says Rothstein.
"If someone is discriminated against because they're predisposed to contracting a certain disease, society is still going to have to pick up the costs of their illness, whether through Medicaid or some other form of government aid; yet we will have lost the productivity and capacity of all these people who are being screened out," he says. "That seems to me like a terrible waste of human resources."
As of now, very few employers make hiring decisions based on genetic information. Most of the employers that require job applicants to undergo genetic testing are in fields such as chemical processing or oil refining, where exposure to various toxins or solvents could prove harmful or fatal to people who are genetically predisposed to certain diseases.

Nevertheless, legislatures in 22 states have enacted laws that ban the use of genetic testing for employment purposes (see sidebar) and for denying insurance coverage. Michigan and Massachusetts became the most recent states to enact such legislation.
The WRI's Gruber thinks that federal protection is needed, however.

"There's absolutely no uniformity among the state laws," he says. "Only about half of the states have laws addressing employment discrimination. Of those laws, many only pertain to certain diseases, while others specifically ban genetic testing but they don't address genetic information."
Genetic testing is only one method of collecting genetic information, says Gruber, and banning employers from collecting the data in such a manner won't necessarily stop the practice of genetic discrimination.

"We've heard a lot of anecdotal information about employees who've been fired because their employer found out about their family's genetic history," he says. "Often, an employee will get tested for a disease that's fairly common in his or her family, the employer finds out about it through the employee's health insurance claim and it fires the employee. Or, many times employees simply tell their supervisors or someone in the office that they've been tested, and they find themselves let go from their job.

"There are still a lot of people who think being honest with your employer is the best way to conduct yourself," Gruber continues. "Unfortunately, that's not always the smartest thing to do."
Only federal legislation will provide the necessary level of protection for employees, he says.
Toward that end, a number of bills have been introduced in Congress that would ban insurers from using genetic test information as a basis for denying coverage and ban companies from making hiring decisions on the basis of genetic information, including family histories. Two recent bills, S. 1322, introduced by Sen. Thomas Daschle, D-S.D., and H.R. 2457, introduced in the House by Rep. Louise Slaughter, D-N.Y., would prohibit employers from requiring, requesting, collecting or purchasing genetic information for hiring, promotion or compensation decisions. Both bills were still in committee at press time. Gruber says opposition to these bills mainly concerns the level of punitive damages to be awarded and the reluctance of many conservative lawmakers to add more regulations to the workplace.

However, even if new federal legislation governing genetic information isn't passed soon, existing laws may already provide some protection against genetic discrimination. A position paper on genetic testing from the Society for Human Resource Management notes that because members of some racial and ethnic groups are more prone than others to suffer from certain genetic diseases, such as sickle-cell anemia among blacks and breast cancer among women of Ashkenazi Jewish descent, a genetic discrimination charge could potentially fall under the auspices of Title VII of the Civil Rights Act of 1964.

The Americans with Disabilities Act may also offer some protection against genetic discrimination, according to the paper.

Meanwhile, President Clinton signed last fall an executive order prohibiting federal agencies from obtaining or using genetic information for any employment-related decisions, including hiring, firing or promotions. The ban extends to family related genetic information as well. Exceptions are granted in cases in which such information would ensure workplace health or safety or if a genetic condition could prevent an employee from performing essential job duties.

Health Crunch
On the health-care side, genetic testing offers hope for millions. For example, people suffering from hemachromatosis - a disease that causes excessive levels of iron in the blood - often died because the only way to detect the disease was through a liver biopsy, says Rothstein. Thanks to genetic testing, the disease is easily detected today and the treatment, which is relatively painless and inexpensive, involves donating blood once every week or so to remove the excess iron, he says.
Many other diseases, such as colon cancer, can also be detected and treated much earlier - usually well before they occur - thanks to genetic testing, Rothstein says.
However, these advances will also lead to higher health-care costs, says

Mark Spiro, a health-care consultant with Towers Perrin in Boston.

"For many employers, the question regarding genetic testing shouldn't be, 'What's in it for me?' but rather, 'What's it going to cost me?' " he says.

For starters, says Spiro, the tests themselves are not cheap: A BRCA1 screening test for breast cancer, for example, cost $1,000 until recently, he says.

"These are expensive tests, and if you are considering using them in a screening capacity, as many people are, that puts a tremendous burden on health-care costs," he says.

The ability to detect diseases well before their onset will prove to be a bonanza for pharmaceutical companies - and another cost burden for employers, predicts Spiro.

"I go to a briefing conducted by the Human Genome Project at least once a year, and every year, the heads of research at Merck, SmithKline Beecham, all the major drug companies, are sitting right there beside me," he says. "Why are they there? They are developing drugs for diseases that do not yet exist.

"Let's say that an employee at age 30 has gotten a test saying that at age 50 he's at a serious risk of developing prostate cancer, but if he takes this drug developed by Merck for the next 20 years, he won't get it," Spiro continues. "Then extend that to the general employee population. The majority of employees are, by and large, healthy. Up to 80 percent of them rarely use their health insurance. But thanks to genetic screening, they'll now have a reason to start spending money on their health to prevent these diseases they hadn't known they were susceptible to before. That's going to put tremendous pressure on self-funded plans."

Spiro says these trends may lead more employers to adopt a defined contribution form of health benefit, or to drop health benefits altogether.

Joe Luchok, communications manager for the Health Insurance Association of America in Washington, says it's "all speculation at this point."

"It's possible genetic testing could lead to increased health-care costs, but from what we've seen so far, there's no evidence to suggest it's going to go that way," he says.
Rothstein is also skeptical.

"Medical technologies, with some exceptions, do tend to push up costs, although some scientists will tell you they save money in the long run," he says. "But the tests themselves are already getting much cheaper. [In short,] we don't yet know how genetic testing will affect health-care costs. It's a matter of some dispute."