I suppose that it wouldn’t come as much of a surprise that many doctors don’t necessarily make great actuaries. The medical profession and most health systems are, in fact, much more concerned with the most likely outcomes than they are with less likely outcomes that might cause greater pain and suffering to their patients.
This is strange because we buy insurance not against the things that are more likely to happen but to protect against the small possibility of a very unpleasant outcome. We insure, for example, against losing an engagement ring or getting badly injured while traveling precisely to prevent a small probability catastrophe from occurring.
Prenuvo was started 6 years ago because a very close friend of ours lost a battle with cancer that was diagnosed too late. What was most disturbing about what she went through is that she visited the doctor several times complaining of feeling fatigued. As a young mother of 4 children, the doctor advised her that it was most likely that she was tired because the small kids were wearing her out. It took a year for her colon cancer to be diagnosed, and by that stage it had become quite advanced and her treatment ultimately failed.
During our lifetimes, we all have just over a 50% chance of being diagnosed with cancer and yet almost half of those diagnoses happen when the patient reports to the emergency with acute symptoms of advanced cancer. Now, there are many reasons why we collectively fail to diagnose cancer early and this is a reoccuring theme at Prenuvo. These include the fact that many cancers just do not not cause symptoms at all or that we don’t listen to what our bodies are telling us.
But what is complicating early diagnosis the most is the fact that there are more conditions that you can be diagnosed with than there are symptoms. Thus, any one symptom might be the cause of a number of conditions. And almost always there is another condition that is more likely than cancer! Some cancer can even cause pain in completely unrelated parts of the body. So even trying to assess the possibility that a pain you are feeling might be cancer is almost an impossible task.
Here is a thought experiment. It costs around $2,000 a year to protect a $1,000,000 house from burning down. For the insurance industry to not go out of business, that means that the probability of your house burning down cannot be more than 0.2%. Not a very high probability, but most of us buy it. And we don’t spend a lot of time agonizing, thinking, is my carpet more flammable than others, or do my kids like to play more with matches than the average household? We recognize that the size of the calamity is such that the insurance is worth it, even if just for peace of mind.
At Prenuvo, on average we detect a life threatening condition in around 3 - 5% of patients who come for a preventative scan. And because we detect it earlier the chances of a successful treatment is, on average, 5-7 times greater than if it is caught late. You probably can figure where I am going with this. The cost of a Prenuvo scan starts at $999 (half the price of the insurance), and the possibility of a catastrophic outcome is around 15-25 times more likely. So if you care enough to insure your house you should care enough to insure yourself. That actually has quite a nice rhyme to it!
Unfortunately, doctors and health systems don’t often think this way. In fact they are almost designed to focus on the most likely outcome - be it for budgetary reasons or simply because there is not enough time to track down every possibility for every patient. So the burden of doing this fall on us. Or, on any forward-thinking person who works in the insurance industry and wants to build an insurance product around preventative MRI screening. We would be happy to talk!
To disrupting both the health AND insurance markets.
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