Prediction Markets In Health Care

George R. Neumann

Iowa Electronic health Markets

Markets In Health Care

The IEhM has worked on 3 different types of health markets

Seasonal Influenza

Avian Influenza

Syphilis

I will discuss what we have learned from these markets

Markets In Health Care

Why are Prediction Markets Important in Health Care?

Markets In Health Care

Why are Prediction Markets Important in Health Care?

o Cost savings with greater forecast accuracyo Influenza causes:

36,000 deaths annually in the U. S.

120,000 hospital admissions

Medical treatment can be adjusted if an outbreak of flu is anticipated

o Prophylaxis of nursing homeso A vaccine is available as are several medications

Markets In Health Care

Vaccine effectiveness depends on timing as well as predictions about which strains to put in the vaccine. It takes about 2 weeks for the vaccine to become effective.

Antiviral medicines such as Oseltamvir (Tamiflu) require 48 hour advance treatment

INFLUENZA MEASURES

CDC COLOR DEFINITIONS

  WIDESPREAD

  REGIONAL

  LOCAL

  SPORADIC

  NO ACTIVITY

  DATA MISSING

Markets In Health Care

The prediction problem with influenzaIOWA 2007-2008 2006-2007 2005-2006 2004-2005 2003-2004 2002-2003 2001-2002 2000-2001 1999-2000

WEEK COLOR COLOR COLOR COLOR COLOR COLOR COLOR COLOR COLOR40 Y Y Y Y Y Y Y Y Y41 Y Y Y Y Y Y Y Y B42 Y G Y Y Y Y Y Y Y43 Y Y Y Y Y Y Y Y Y44 Y G Y Y Y Y Y Y G45 Y G Y Y Y Y Y Y G46 G G Y Y Y Y G Y B47 G G Y Y G Y G Y G48 G G Y Y B Y G G G49 G G G G R Y Y G G50 G B G G R Y G G G51 G B G P R Y G G R52 G B G B R Y G G R

1 P B B B R Y G G R2 P B B B R G G B R3 B R B B B G Y B R4 B R B R B G G R R5 R R B R P B B B G6 R R B R P R B B G7 R R B R G R G B G8 R R R R G R B R Y9 R R R B Y R B G Y

10 R B R B Y B B G Y11 R B R P Y G G Y Y12 R P B G Y G G G Y13 R P B G Y G G Y Y14 B G P G Y G G Y Y15 G G G G Y Y G Y Y16 G G G G Y G G Y Y17 Y G G Y Y G G Y Y18 Y Y Y Y Y Y G Y Y

Markets In Health Care

The epi Curve for Iowa

The Epi-Curve

0

1

2

3

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6

Flu Week

2007__Actual

7-Year Historical Average

Markets In Health Care

The CDC provides a state-by-state description of influenza activity but it is two weeks out of date before it becomes available.

Markets In Health Care

We have run markets in Iowa, North Carolina, and Nebraska Markets by Year and State.

Year State Number of Markets 2007-2008

Iowa 31 Nebraska 31 North Carolina 31

2006-2007 Iowa 29 North Carolina 27

2005-2006 Iowa 29

2004-2005 Iowa 14

Total 192

Markets In Health Care

Who participates?

Trader Characteristics in Iowa-2006-2007 Occupation Freq. Percent Cumulative %. -- 1 1.12 1.12 Administrator 3 3.37 4.49 Microbiologist 14 15.73 20.22 Nurse 15 16.85 37.08 Other 21 23.60 60.67 Pharmacist 8 8.99 69.66 Physician 20 22.47 92.13 epidemiologist 7 7.87 100.00 Total 89 100.00

Markets In Health Care

What did we learn?Trader heterogeneity can be a curseSoftware and training materials have to be adapted to the knowledge and inclinations of the audience. This is hard to do when the audience differs in background. It is essential to do if members have different amounts and types of information. E.g. microbiologists vs. school nurses.PM’s work well, even with heterogeneous traders

FORECAST ACCURACY- IOWA2004-2008

0.25

0.30

0.35

0.40

0.45

0.50

0.55

0.60

0.65

0.70

0.75

1 2 3 4 5WEEKS IN ADVANCE

% E

xact

ly C

orr

ect

IA_MKT

IA_HIST

IA_MARKOV

Forecast Success% Correct

Method 5 weeks 3 weeks 1 week

Markets 59% 63% 68%

History 49% 49% 49%

Markov 30% 43% 57%

Forecast Success% Δ in No. Correct

State 5 weeks 3 weeks 1 week

IA 106% 146% 136%

NC 78% 125% 150%

Avian Flu

We partnered with PROMED to recruit traders from around the world.

There are about 20,000 members of the International Society for Infectious Disease, located in 155 countries.

Promed-mail is their major way to communicate daily.

Avian Flu: Trader Locations

Avian Flu

Contracts typically were about how many cases of Avian H5N1 would occur in a specific region in a specific time period (6 months).

Contracts were also traded on whether there would be human to human transmission of Avian Flu in a specific time period.

Q.: Will there be human to human transmission of H5N1 in the EU by 12/31/2008

Q: Will the World-wide # of deaths from Avian Flu exceed xxx

Seasonal and Avian Flu

Finding the right audience for a PM can make the job easier.

Emphasis on graphical display helps a lot with medical types.

Future projects: Virus strain prediction, Vaccine Effectiveness

Animal infections

Syphilis Markets

There are two significant features of syphilis: quantity of cases and gender mix

Total New Syphilis Cases-Nationwide1984-2006

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10000

20000

30000

40000

50000

60000

1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Syphilis — Reported cases : United States, 1941–2007

Cases (in thousands)

P&SEarly LatentTotal Syphilis

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120

240

360

480

600

1941 46 51 56 61 66 71 76 81 86 91 96 2001 06

Fraction of New Syphilis Cases That Are Female1984-2006

0%

10%

20%

30%

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50%

60%

Year

%

Syphilis Markets

No results so far –markets go operational in May. But lots of enthusiasm at the CDC.

Check it out athttp://iehm.uiowa.edu/iehm/index.html