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The company uses AI to help payers and providers identify and manage high-risk individuals
For payers and providers, healthcare is all about risk. That means, basically, understandsing how likely are patients to get sick, how much will that cost and how can that best be prevented, so that they can price their solutions accordingly. It was hard enough to predict such things in a pre-COVID world; in a post-COVID world, where people may have long-term effects for the rest of their lives, it has become exponentially more difficult.
That's why Lumiata, a platform that uses artificial intelligence to help health plans and providers make more accurate predictions for underwriting and risk management, is seeing a huge uptick in the wake of COVID.
The company, which takes disparate healthcare-specific datasets and analyzes with them its AI algorithms in order to reduce costs and create better patient outcomes, announced a $14 million funding round on Thursday.
Identifying risk in the healthcare system
Lumiata's algorithms can identify underwriting risks, surface opportunities to reduce costs, and enable better care by providing reliable predictions to patient outcomes. The company sells those predictions to healthcare plans, as well as to providers, especially accountable care organizations, that are risk bearing health systems.
"If you're in the health plan world, what we're providing is essentially predictions. That's our output. For example, what is your future costs or anticipated medical expenses for 2022 or 2021? That information is used to underwrite a plan, and what the pricing should be for that plan and what kind of product should be offered with that plan,"Lumiata CEO Dilawar Syed explained to me.
"This is advanced, predictive analytics that the Lumiata platform delivers to these business users, their underwriters, their actuaries and business analysts. Those insights are used to underwrite a plan and make sure that they are providing a certain product that is a fit for the customer and at a price point that it would be competitive for them, and will retain the customer as well."
So far, the company has signed multiple, multi-year deals, it does not disclose the specific numbers of organizations it currently works with. Syed would say that, in terms of ROI, Lumiata has been able to identify hundreds of millions of dollars in risks on their customers’ books that they were previously unaware they had. In addition, its customers have seen a 7 to 10x ROI compared to their predictive costs.
In addition to saving its customers money, the algorithms can also be used to make sure that those patients are getting the best care.
"We have more than 40 disease models, so we can then define what are the likely patients who are going to have a certain progression of disease, who is likely to return to the ER and how to do proactive care to prevent that from happening. We can make sure that they are provided at home care, they’re taking their medications appropriately and so forth," said Syed.
"So, in the case of a hospital system that is an accountable care organization, that scenario of care management is how we're benefiting an end consumer and an outpatient."
The COVID effect
As COVID has been taking its toll on the healthcare system over the past year, that has actually turned to be a benefit for Lumiata, which has been seeing a rapid pickup in demand, especially from the health plan side, because many of these buyers are struggling to manage risk in a post-COVID world.
"Pre-COVID, it was a always challenge with value based care becoming a phenomena. After COVIDm there is even a clamor now for more advanced data support as new data about COVID is coming in and folks don't know how to make use of it, and how to think about risk in this new world," Syed explained.
"The conversations we were having with actuaries and underwriters and executives, as well as care managers, became all the more important. I mean folks didn't know, we heard this repeatedly, 'we don't even know how to think about 2021, how to manage risk, how to take care of all these millions of people in our country who are going to have preexisting conditions for the rest of their lives.' And those numbers, by the way, even the worst estimates that have now been crossed. So, the impact on near-term and longer term is quite substantial."
Even more important than the increased demand, though, is the speed at which organizations are starting to make decisions thanks to the pandemic, resulting in AI becoming an even more critical part of their operations than it was even just a year ago.
"If you'd asked me, even like a year and a half ago, what people think of data science and AI for some of these use cases, I would have said to you, 'It is still somewhat futuristic thinking for them.' Now, they expect to adopt new technologies," Syed told me.
"Much like after 9/11 on the software side how the cloud became much more acceptable, after this pandemic we are projecting that the data science and AI for models, it's going to become almost like an expectation that you have them as part of your infrastructure to deliver service, to deliver products."
Building a new category
That rapid change is why Lumiata decided to raise it's new round of funding, which was led by Defy.vc and AllegisNL Capital along with existing investors Khosla Ventures and Blue Venture Fund. This brings the company's funding to roughly $50 million.
"One of the reasons we raised funding at the end of last year was to be able to go-to-market, be able to accelerate our footprint and be able to address this newfound need for a more advanced analytics technology to manage risk, because legacy methods that were built 50 years ago, or consulting firms, and companies that try to do data science, that's not going to cut in this new world. We are dealing with a once in a generation phenomenon in terms of very high volatility," said Syed.
The company plans to use the new money to build out its enterprise platform and expand its footprint on the go-to-market side, with the ultimate goal of increasing adoption. The company also plans to open its platform as a service for data science teams within healthcare, in addition to delivering applications for underwriters and actuaries and care manager.
In addition, the funding will also go toward opening an office in Guadalajara, Mexico, which Syed says is "considered the MIT of Mexico."
"It's a phenomenal place. It’s a tech hub emerging in the region, and it's just great to tap into that market and for us to have that talent. So, a lot of our software engineering functions will be there, but we’re also using sales and marketing talent as well in that market."
Ultimately, though, the company's mission is to lead the charge for democratizing AI and data science, to help lower the cost of care, and drive better health outcomes.
"We're building a new category here as a company and we were also addressing problems that are very essential to healthcare in this country, and even globally. Some of the problems haven't been solved before, quite frankly, in the manner that we are tending to solve them. So, we're building new technology," said Syed.
"We're also addressing a whole set of new challenges that haven't been addressed before. The combination of that makes for a company that is doing something pretty special. And while we are small and we're growing fast, this is a company that's going to break new ground in terms of how we deploy a new product in a new category to address some of the challenges that haven't been addressed effectively in recent years and decades."
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Lumiata is a data science company that is transforming healthcare by enabling hospital networks, health insurance companies and risk bearing entities to become predictive-first: Continuously able to predict the health, risk and cost of individuals and populations in real time and at scale.
Lumiata combines the analytical power of big data and data science with the brilliance of physicians and medical science to deliver hyper-personalized, actionable analytics that enable the entire care team to continuously know what to do, for whom, when and why.
Lumiata is a venture-backed company based in Silicon Valley, comprised of clinicians, data scientists, engineers and experts in care delivery.