Cardinal Analytx raises $22 million to predict high-cost health plan members
Palo Alto, California-based Cardinal Analytx Solutions, which develops and maintains predictive analytics software for health care payers and providers, today announced that it has secured $22 million in a series B round led by Kleiner Perkins chair John Doerr, with participation from strategic investors GuideWell Mutual Holding Corporation, Blue Shield California, and Premera Blue Cross. The capital infusion follows a $6.1 million series A round in 2017 and will enable the company to further invest in talent and technology, according to CEO Linda T. Hand.
“We take great pleasure in welcoming John Doerr to our board and are honored by the investments from his family fund, our strategic health plan partners, and other leading investors,” said Hand. “The new growth funding positions us to capitalize on our early commercial traction and robust pipeline.”
Cardinal Analytx, which was spun out of nonprofit accelerator StartX in 2013 by Stanford professors Arnie Milstein and Nigam Shah in partnership with Cardinal Partners, sells a system called Cost Bloom that taps AI and machine learning to identify high-cost members of health networks before they experience a high-cost event. To that end, it takes into account individuals’ clinical histories to generate likely trajectories and steer them toward better outcomes, all while optionally predicting specific types of high-cost, high-acuity events. On the provider side of the equation, Cost Bloom shows the likelihood a patient will benefit from an intervention and recommends action plans to care managers and clinical teams.
Hand said the goal is to focus clinicians’ attention on strong candidates for cost-containing preventative treatment, which she says can result in upwards of 15% savings over two years. This has historically been easier said than done — an estimated 60% of high-spend members in any given year weren’t high-cost the prior year. Separately, Shah’s and colleagues’ research found that 10% of health insurance enrollees account for approximately 70% of spending and that 40% are persistent high-cost members.
“We expect to quickly extend our leadership in the use of AI to accurately predict rising risk and future costs and deliver actionable insights,” Hand added.
In a pilot program with Premera, Cardinal Analytx analyzed data from 1.4 million members to forecast new high-cost members in the subsequent year. Around 67% of these members — most of whom did become high-cost members — weren’t identified by Premera’s existing systems, Cardinal Analytx claims.
Premera formalized its partnership with the startup in February, and it deployed Cost Bloom in production that same month, along with additional custom-designed risk prediction models. “We were an early investor [in Cardinal Analytx],” said Premera Blue Cross CEO Jeff Roe, “and [we] continue to invest and co-design [with the company] because the AI and predictive analytics that they offer enable us to deliver better health outcomes for our customers while lowering the total cost of care.”
Cardinal Analytx also today announced that Doerr and Shah will join its board of directors.
Source: VentureBeat
