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The Actuary The magazine of the Institute & Faculty of Actuaries

AI and health: Prevention is better than cure

Paloma Valdés examines how artificial intelligence  (AI) is boosting value for healthcare companies by aligning the interests of patient and provider



Historically, Chinese medicine practitioners were paid a retainer to keep their patients healthy. As long as the patient was pain and disease-free, the practioner would receive the payment. When the patient became ill, payment would stop until the practitioner restored their health. This approach gave practitioners a different motivation to modern healthcare providers; the former were focused on prevention, whereas the latter stress finding a cure when illness arises. Is the ancient Chinese model what the coming value-based healthcare (VBHC) trend is about?

The healthcare industry is currently experiencing a transformation, moving from a reimbursement payment model towards a value-based one. While a fee for service has become common practice, payments are based on the services provided; VBHC, in contrast, uses patient outcomes to determine payment.

This new ‘value over volume’ approach to making healthcare spending more efficient comes at a time of great need. Government healthcare spending is rising faster than economic development globally, with the US, France and Japan spending more than 10% of their GDP on healthcare.

In the US, the fee for service model is fading faster than was predicted in past studies; by 2020, 59% of healthcare payments are projected to be value-based. Austerity budgets, stagnant economic growth and new demographic challenges, such as increased life expectancy and ageing populations, are some of the forces driving VBHC to dominance in European countries as well. 

VBHC aligns the interests of all stakeholders: patients, providers and payers (including governments and insurance companies). This shifts the focus towards a more sustainable, efficient and outcome-oriented model. So, how should healthcare companies prepare for the transformation?

Unbiased outcome measurement method

Healthcare providers need to monitor patients in the recovery phase after therapy, to ensure treatment was successful. This contributes to early detection and resolution of any complications, assuring a positive health outcome and patient satisfaction.

Innovative technologies are driving this process, generating the evidence providers need to show they are providing value to patients. The technology allows providers to check up on patients until they are completely recovered, creating a direct communication channel between patient and provider.

Prevention focus

Healthcare providers’ ability to use big data to evaluate the value of therapies, identify patterns and predict future needs will determine the success of the VBHC approach. The ancient Chinese philosophy is being readopted – but with a lot more information to drive decisions. This is where data analytics and AI will play a role.

The British company FollowApp.Care, in collaboration with the University of California, San Francisco, is currently assessing, under a US National Institute of Health grant, the capacity of technology to:

  • Accurately capture patient-reported outcomes
  • Impact on health outcomes 
  • Impact on provider performance.


There are two simple concepts underpinning this technology. The first is to take care of patients after treatment – asking treatment-targeted key questions via email or SMS to track the evolution and early detection of complications. The second is to bring patients back to the clinic more often for preventative care – using data analytics to identify patterns and predict future needs, and AI algorithms to deliver personalised health content to each patient.

The results obtained over the course of a year in the first case study – a dental platform with 83 clinics – are promising:  

  • A 70% increase in regularly returning patients
  • A 165% increase in patient engagement
  • Return on investment over 1,500%
  • A 44.5% monthly revenue increase.


While this technology is in commercial use and trusted by more than 600 clinics, we are still at least two years away from fully understanding the final results of the research. However, preliminary findings reinforce the idea that moving from emergency to preventative healthcare adds value for patients and providers, and is a good starting point for the VBHC revolution.

Paloma Valdés is an engineer and pharmacist and COO at FollowApp.Care