Machine Learning Based Program to Prevent Hospitalizations and Reduce Costs in the Colombian Statutory Health Care System

Health-care systems that rely on hospitalization for early patient treatment pose a financial concern for governments. In this article, the author suggests a hospitalization prevention program in which the decision of whether to intervene on a patient depends on a simple decision model and the prediction of the patient risk of an annual length-of-stay using machine learning techniques. These results show that the prevention program achieves significant cost savings relative to several base scenarios for program efficacies greater than or equal to 40% and intervention costs per patient of 100,000 to 700,000 Colombian pesos (i.e., approximately 14% to 100% of the average cost per patient in Colombia statuary health care system). This article also shows how tree-based methods outperform linear regressions when predicting an annual length-of-stay and the final model achieves a lower out-of-sample error compared to those of the Heritage Health Prize.