Clearances are run on the parent animals. In the case of hip displaysia, we have adult x-rays sent to OFA for grading - signs of the condition don't usually manifest until the dog is fully grown.

For pups, we have a refund/buyback policy for animals that do manifest such conditions. We have on occasion "adopted back" dogs that the owner could no longer care for, and we've never had a problem finding them a new home.

We did acquire one dog that received an OFA "Fair" hip rating (as opposed to "Good" or "Excellent"), and she simply didn't breed. She lived a long and happy life among the rest of the pack.

One way to do it would be to test each candidate parent dog for the problematic genetics and simply not breed the ones that do have the problems. That isn't any more ominous than breeding in general.

Where it is possible it will also be more effective than culling; it should lead to a population of animals that are free of the problem altogether.

Most likely you can only breed sufficiently healthy animals.