C. Engdahl reporting from FEI2010
FEI2010 Presenter: Tina Brown-Stevenson, Ingenix (a UnitedHealth Group Company)
In a solid FEI Champions presentation to complement James Surowiecki's keynote address, practitioner Tina Brown-Stevenson, Sr. VP Innovation and Information Group at Ingenix, talked through the implementation of a prediction market at Ingenix. As a lead-in to the details of the specific practical application developed at Ingenix, Ms. Brown-Stevenson drew upon examples from Mr. Surowiecki's book The Wisdom of Crowds to outline the foundational philosophical elements for Ingenix's overall approach. Examples included the circumstances and decisions made prior to the Columbia Space shuttle disaster and the Iowa Electronic Market. You can read about the details for both of these examples in the book The Wisdom of Crowds.
The criteria for success when harnessing 'the wisdom of crowds', as outlined in Jame's Surowiecki's book of the same name include 1) a crowd with a diversity of opinion, 2) an independent crowd of individuals whose opinions aren't shaped by those around them, 3) decentralization that allows individuals to draw upon local knowledge, and 4) a mechanism to aggregate information that turns private judgments into collective decisions. It was these principles that shaped the development of the Ingenix Prediction Market.
Launched on July 7, 2009, the Ingenix Predication Market is a public application focused on the health care industry. Examples of general categories predicted in the market include 'Health Care Reform Legislation', 'Health Reform Impact', and 'Health Reform Cost'.
As with any new application or organizational change, "there will be challenges" Ms. Brown-Stevenson points out. Ingenix has had its share. In addition to the usual keys to success for addressing such challenges ' which include executive sponsorship, solid requirements definitions, starting small with a core group of people, initially staying under the radar, and involving legal and IT early in the process ' the most interesting insight from the Ingenix experience seemed less obvious to me, but made perfect sense when revealed. The analogy of the Prediction Market as a sort of 'stock market' was a barrier to success. People didn't quite understand how the stock market applied to ideas. The prediction of ideas and information needed to be simpler than actual stock trading.
Even with its current relatively small amount of data and participation, the prediction market at Ingenix is a relative success and has already revealed insights for the company. As Ingenix moves to further develop the prediction market - which will include using it in conjunction with market research initiatives, and providing stand-alone prediction market advisory services - Ingenix will remain focused. As Ms. Brown- Stevenson says, we will keep our 'eye on the goal' ' another key to their success.