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Running head: EFFECTS OF GENETIC TESTING TO FIXED AND VARIABLE

Effects of Genetic Testing to Fixed and Variable Hospital Costs
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EFFECTS OF GENETIC TESTING TO FIXED AND VARIABLE

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Effects of Genetic Testing to Fixed and Variable Hospital Costs
The clinical utilization of genetic testing is expected to change medical and cost
management systems in healthcare centers. The operation of various healthcare activities will
undergo a lot of alterations to fit into the new dynamics. Carrying out diagnosis, medication, and
treatment of predicted conditions will take a new route. In the healthcare sector, there are two
types of costs; fixed and variable. Usually, at least 80 percent of a hospital’s expenses are fixed,
for example, remunerations, equipment, buildings, and other related costs. Non-variable
expenses are always constant regardless of the number of patients that visit a hospital annually.
On the contrary, variable costs include the following; drugs and supplies that keep on changing
based on the number of individuals received. Hospitals have a challenge of altering fixed costs
unlike other forms of businesses. Usage of genetic testing to explore medical risks among people
is likely to influence costs in both healthcare centers and patients positively.
Currently, there has been a steady increase in the number of firms offering genetic testing
services, for example, 23andMe. It is a biotechnology and genomics organization that was started
in April 2006 by Anne Wojcicki, Linda Avey, and Paul Cusenza. It is headquartered at Mountain
View, California, United States. The company conducts genetic testing at $99 and carries out
medical coaching and consultations at $199. Visitors are undertaken through an exhaustive
discussion process and required to fill a questionnaire before their saliva or blood is harvested for
DNA examination. After receiving the outcome, the information therein is interpreted to the
client and various lifestyle options and suggestions recommended. The personalized advice
offered to customers helps them to choose the most appropriate diet and engage in effective
exercises.

EFFECTS OF GENETIC TESTING TO FIXED AND VARIABLE

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Based on 23andMe company case study, it implies that it is not easy to predict the cost
consequences of genetic testing on hospital costs because a big percentage of these examinations
are conducted by external firms that are not attached to a specific healthcare center. Thus, no
general description can be pegged on the impact of genetic testing on hospital costs. However,
each test leads to different expenses that can increase on the side of the client and health center
or decrease in both cases. In case, genetic testing is conducted in the high-risk population; then
there is an expected increase in the expenses incurred by clients. Equally, many people are likely
to emerge with potential issues, which will require the intervention of physicians. When more
individuals visit health centers for consultation, prevention, or treatment, hospitals generate more
income that helps them handle their expenses.
Equally, there will be an expected increase in varia...