PALO ALTO, CA--(Marketwired - Sep 27, 2017) - Cardinal Analytx Solutions, a developer of advanced machine learning solutions for improving healthcare by predicting impending costs, today announced a $6.1 million Series A round led by Cardinal Partners. Other investors in the round included Premera Blue Cross, which participated in a pilot program that validated the company's technology, and the Stanford-StartX Fund, which was co-founded by the StartX accelerator, Stanford University and Stanford Health Care.

Stanford professors Drs. Arnie Milstein and Nigam Shah created Cardinal Analytx with Cardinal Partners. Dr. Milstein is a nationally recognized managed care expert who directs the Clinical Excellence Research Center and teaches at the Stanford University School of Medicine. Dr. Shah, a Stanford professor of medicine and biomedical data science, is an expert on applying machine learning to healthcare problems and co-directs Stanford's Center for Biomedical Informatics Research.

Across the U.S. healthcare system, 10 percent of health insurance enrollees account for approximately 70 percent of healthcare spending. Dr. Shah's research found that 60 percent of highest cost members are new and were not high-cost in the previous year, while 40 percent are persistent high-cost members. 

Designed for health plans, at-risk providers and self-insured employers, Cardinal Analytx's solution combines predictive modeling and targeted intervention recommendations using artificial intelligence (AI) technologies to identify potential new high-cost members and to provide individualized medical recommendations. Using this guidance, care managers and clinical teams can take proactive measures to avoid serious events and associated costs, such as a major surgery or a lengthy hospital stay. The results are better healthcare and quality of life for members, as well as reduced costs for insurers, employers and enrollees.

"Unexpected increases in healthcare costs that result from potentially dangerous and expensive medical conditions can have a lasting effect," said Thomas McKinley, Cardinal Analytx's CEO. "Conventional analytic approaches have identified existing high-cost enrollees, but that's already too late and does not effectively address prevention. Cardinal Analytx's approach looks for members who are likely to have serious medical events before they occur and then outlines a clinical intervention plan to mitigate escalating health concerns before the onset."

The Series A funding will enable Cardinal Analytx to continue advancing its technology with the addition of data science, engineering and clinical capabilities.

Premera Pilot Project Paves Way for Predictive Healthcare Solution

To demonstrate the value of its solution, Cardinal Analytx entered into a pilot program with Premera Blue Cross, analyzing data from 1.4 million members to predict new high-cost members in the subsequent year.

"Premera was a logical strategic partner given our shared fundamental goal of enhancing access to better and more affordable care through innovation," said McKinley.

Sixty-seven percent of the members identified by Cardinal Analytx's solution as people whose costs would increase in the subsequent plan year - most of whom did in fact become high-cost members - were not singled out by existing approaches used to find individuals whose costs would rise.

"Cardinal Analytx enabled us to better predict which members could benefit from early interventions and provide effective recommendations to engage them in healthier behaviors," said Dr. John Espinola, Premera Blue Cross's executive vice president of healthcare services. "The pilot results were outstanding, compelling us to invest in a team and company that is on the cusp of transforming how we help patients who need it the most."

"We are at an early stage of practical medical informatics, and the best results will hinge on a careful blend of machine and clinician intelligence. The team at Cardinal Analytx illustrates such a blend in support of care managers serving health insurers and accountable healthcare organizations," said Dr. Milstein. "The resulting prediction and prevention of health crises reflect the street wisdom of 'clinician black belts' in care management and cutting-edge methods of elite data scientists."

"Our goal is to bring precision to the practice of medicine by coupling a machine's accuracy with a human's judgment and intuition," added Dr. Shah, who will represent Cardinal Analytx in a discussion on transforming care and insights through data and analytics at the Health 2.0 conference in Santa Clara, Calif., on October 2.

About Cardinal Analytx Solutions
Based in Palo Alto, Calif., Cardinal Analytx Solutions is an early-stage predictive analytics company that leverages machine learning and AI technology to identify potential high-expense health plan enrollees and provide targeted clinical recommendations designed to improve patient outcomes and contain costs. The company, which was spun out of Stanford University-affiliated StartX startup accelerator, is backed by Cardinal Partners, Premera Blue Cross and the Stanford-StartX Fund. Founded by two Stanford industry luminaries in medicine and biomedical data science, Drs. Arnie Milstein and Nigam Shah, Cardinal Analytx is committed to transforming patient lives by combining machine learning with clinical excellence. For more information, visit www.cardinalanalytx.com or email info@cardinalanalytx.com.

About Cardinal Partners
Since 1996, Cardinal Partners has been one of the leading venture capital partnerships focused exclusively on healthcare investing. Cardinal specializes in early stage financing rounds, usually as the lead investor in the initial financing round of a growth company. Cardinal is committed to the belief that innovation and excellence in healthcare will simultaneously improve the lives of millions, while also rewarding investors with extraordinary returns. Over the course of their careers, the Cardinal Partners team has invested in more than 100 growth-stage companies. For more information, visit www.cardinalpartners.com.

About Premera Blue Cross
Premera Blue Cross is a leading health plan in the Pacific Northwest, providing comprehensive health benefits and tailored services to approximately 1.9 million people, from individuals to Fortune 100 companies. The company offers innovative health and wellness solutions focused on quality outcomes for patients and controlling costs. Premera Blue Cross, which has operated in Washington since 1933, is a nonprofit, independent licensee of the Blue Cross Blue Shield Association. Premera Blue Cross is a member of a family of companies based in Mountlake Terrace, Wash., providing health, life, vision, dental, stop-loss, disability, workforce wellness, and other related products and services. The family of companies employs over 3,600 people and provides healthcare coverage and related services to over 2.1 million members. For more information, visit www.premera.com.