Why a failing bookstore holds a key to the future of healthcare

October 27, 2014

Today, the use of predictive analytics by Internet retailers is ubiquitous. Amazon was one of the first to use it widely, creating algorithms to recommend books consumers might like based on their previous orders and ratings. Other bookstores, like Barnes & Noble, and other retailers have since widely adopted such technology for their e-commerce sites. Consumers, for the most part, have come to appreciate this technology. Who doesn’t love discovering a great new book that you never would have read without a virtual recommendation?

The technology is now so widely used that it’s easy to forget it didn’t always exist.

Two men that helped develop and implement this technology for leading retailers, including Barnes & Noble, have since set their sights on healthcare. What they have planned is exciting and groundbreaking.

Imagine receiving an email from your provider and clicking through to a secure portal where you’re alerted that you’re due for mammogram. The alert not only tells you when your last mammogram was, when the next available appointments are, but also exactly how much your insurer will cover and how much you’ll owe out of pocket. This won’t be a rough estimate, but the price you’ll pay based on your specific health plan information.

For those of us who know how difficult it has been to implement predictive analytics — let alone obtain transparent pricing information, this sort of scenario seems revolutionary. However, it’s exactly what Jeff Kaplan and Paul Bradley of MethodCare have in mind.

The two former classmates at the University of Wisconsin founded the company in September 2011 to bring the power of predictive analytics to healthcare. Previously, they worked together at digiMine, where they developed predictive analytics for leading retailers. Just last month, revenue cycle management company ZirMed acquired MethodCare, and the partnership means they will now have access to data from the 1.2 billion annual claims ZirMed touches, says Thomas Butts, CEO and chairman of ZirMed.

I met with Jeff and Tom at MethodCare’s Chicago office last week, which they’ll be leaving soon for a bigger space. They plan to develop a Healthcare Analytics Center of Excellence here in Chicago, where they’ll house some of the top IT talent in the country.

Jeff says the appetite for predictive analytics in healthcare has changed since launching the company, and it’s about time. When he and Paul first approached health system executives some two to three years ago, they couldn’t understand why someone who had done analytics for retailers like Barnes & Noble wanted to work with a hospital, he says. Today they are eagerly received. However, they realize the realm of healthcare is very different than retail.

“If you recommend the wrong book, big deal,” says Jeff. In healthcare, “the stakes are much higher.”

Many leading health systems have lauded their use of predictive analytics. However, most systems have thus far only engaged in small, one-off projects, such as using analytics to identify those patients most at risk for congestive heart failure. While this is a worthy endeavor, it only impacts a small subset of patients. What is possible in the near future is hundreds or thousands of simultaneous projects like this that result in automatic prompts to patients and providers suggesting appropriate interventions. Such a future could mean healthier patients while using fewer resources.

Thomas says the companies plan to release tools that allow for the “you’re due for a mammogram” scenario as early as next year.

So, while Barnes & Noble has ultimately struggled, it understood the power of the predictive analytics and the value their use brings to consumers. Discovering a new book is valuable, but the ability to predict which patients are about to get sicker, and intervening to help them maintain their health, is truly valuable. Jeff, Paul and Thomas have realized this for years, and we soon will.

Why a failing bookstore holds a key to the future of healthcare

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