Healthcare and Data Incentives

January 23, 2012
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A few weeks ago, I wrote about the outsourcing of data analysis and discovery through a site called Kaggle. Today, I’d like to go deeper.

A few weeks ago, I wrote about the outsourcing of data analysis and discovery through a site called Kaggle. Today, I’d like to go deeper.

A look at the site reveals a number of fascinating data contests, including one that offers $3 million (USD) for identifying patients who will be admitted to a hospital within the next year, using historical claims data. For a look at the data, data dictionary, and the like, click here.

How, you ask, can an organization such a large prize? It’s actually not that hard to understand. From the site:

More than 71 million individuals in the United States are admitted to hospitals each year, according to the latest survey from the American Hospital Association. Studies have concluded that in 2006 well over $30 billion was spent on unnecessary hospital admissions. Is there a better way? Can we identify earlier those most at risk and ensure they get the treatment they need? The Heritage Provider Network (HPN) believes that the answer is “yes”.

Do the math. $3 million is one-hundredth of one percent of $30 billion. One could even argue that the prize for that kind of savings should be ten times higher than what is currently offered, but the current bounty is clearly not holding people back. At the time I wrote this post, 734 teams or individuals or companies had entered to win the $3 million prize.

Mutually Beneficial

Why are so many people competing? To quote Gordon Gekko, “It’s all about bucks, kid.” $3 million is clearly a great deal of incentive–and that doesn’t include the invariable PR benefit of winning the prize.

In a way, the mere fact that this type of project has to be outsourced is, quite frankly, sad. Think about it. With more than $1 trillion wasted on healthcare in the United States, even moving the needle a little bit can result in massive savings. Yet, clearly something isn’t working.

Healthcare is just one of many industries has become complacent and utterly incapable of fixing its own problems. (Of course, there are many others, as Jeff Jarvis’ wonderful book What Would Google Do? [affiliate link] points out.)

Simon Says

This is the beauty of the Internet. It has brought with it increased transparency, opportunity, and tools. No longer do people and organizations need to sit idly by on the sidelines as opportunities are squandered and poor practices are ossified. No, creative and/or frustrated folks can take their data or their causes online and circumvent traditional gatekeepers.

Now, no one is saying that developing this type of predictive algorithm is easy. It can’t be. But that’s a far cry from impossible. Perhaps the current level of waste is simply an example of a market failure.

In any event, the Kaggle example demonstrates how poorly many–if not most–large organizations treat the topic of information management. Maybe if organizations awarded major bonuses to individuals, teams, and departments for (one could argue) doing their jobs, they wouldn’t have to go elsewhere.

Then again, maybe more of them should.

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What say you?

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