Will You take Your Medicine? FICO says it can tell.

Fair Isaac Corp and its FICO credit score can already predict what consumers will do when they open their wallets. Now, the company is betting it can predict what they’ll do when they open their medicine cabinets.

Minneapolis-based Fair Isaac (NYSE: FICO) is launching a product that health insurers and benefits managers can use to determine whether a patient will likely take his or her medication.

The company mined data provided by a pharmacy-benefits manager to create the so-called “medication adherence” score. To generate a particular person’s score, the firm can rely on data unrelated to health claims, such as driving records, history of paying rent and utility bills, and length of time living at a particular address.

“There are many indicators of whether you’re going to take your medication [that] have nothing to do with medicine,” said Fair Isaac CEO Mark Greene at a recent investor conference. “Many of these indicators speak to your stability and predictability as a patient.”

Fair Isaac is using public data, and won’t violate patient-privacy regulations, Greene said at the conference.

The company’s sales teams are already marketing the score, a spokesman said. The firm expects the FICO medication score will be assigned to about 10 million patients over the next year, and already is working on deals with potential customers, according to a New York Times blog post (which also includes some "risk factors" according to the data). The company has posted descriptions of the product here.

The medication score isn’t Fair Isaac’s first foray into the healthcare market, though predicting patient behavior is far removed from the firm’s roots in the financial-services sector. Its other health care products are more finance-related, focusing on flagging fraudulent health claims.

Cost of care

Health providers and payers care about whether patients take their medications for a range of reasons. It not only affects patients’ health, but also the cost of caring for them, said Patrick Gleason, director of clinical outcomes assessment for Prime TherapeuticsbizWatch, a Bloomington-based pharmacy benefits manager who has researched medication adherence.

For instance, a study conducted by Prime Therapeutics found that diabetes patients who don’t take their medication cost the health system about $1,000 more per year than those who do. Medication adherence is particularly important for patients who suffer from chronic conditions such as diabetes and heart disease, said Gleason, who also is an adjunct professor of pharmacy at the University of MinnesotabizWatch .

Overall, between one-third and half of U.S. patients don’t take prescribed medications, according to a report from the New England Healthcare Institute.

It’s not easy for physicians to determine up-front whether a patient is likely to take a prescribed medication. It depends a lot on the specific drug and whether a patient believes he or she will benefit from the treatment, Gleason said. “There’s not a personality trait that we can point to and say this person is not going to take all their medications.”

However, many payers are keenly interested in medication-adherence data, and large firms often mine their own data to pick out patients who they want to encourage to take their medicine.

Fair Isaac expects health insurers and providers won’t be the only organizations interested in the score. The company also is marketing it to pharmaceutical companies, which can use the information to craft marketing campaigns that encourage patients to take prescribed meds.

The pharma industry loses out on about $35 billion in revenue annually due to patients not taking their drugs, wrote Eric Newmark, a program director for research firm IDC Health Insights, in a blog post about Fair Isaac’s score. Pharma companies could use the information for a range of purposes, such as sending more sales people into regions where patients are more likely to take meds, he wrote.

Healthcare overall is still a relatively small part of Fair Isaac’s business. The company doesn’t disclose how much revenue it generates from the sector. For its fiscal 2010 year, about 76 percent of its $606 million in sales came from the banking, consumer-credit and insurance sectors, with the remainder largely coming from the retail and health industries.

Overall, it’s too early to say how lucrative the medication-adherence product will be for Fair Isaac, said Carter Malloy, an analyst with Little Rock, Ark.-based investment bank Stephens Inc. who follows the company.

“Each one of their newer scores is an interesting opportunity. It’s difficult to gauge the size of the market for any particular score, but clearly there is a sizable market,” he said.

The firm’s entry into the health sector also hasn’t come without controversy. In 2007, the firm riled patient-privacy advocates when it and Tenet Healthcare Corp.bizWatch invested in Health Analytics Inc. The startup planned to launch a scoring system that would predict how likely patients were to pay their medical bills.

Fair Isaac did not itself launch such a score, though Health Analytics, now named Connance, markets analytics software that hospitals use to monitor accounts turned over to collections agencies.

Source: Minneapolis/St. Paul Business Journal