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Research Spotlight: Stephen Parente

Health economist and professor.
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Stephen Parente. (Photo: Ackerman + Gruber)

Stephen Parente. (Photo: Ackerman + Gruber)

When it comes to data, Stephen Parente’s motto is simple: bigger is better. The economist reached this position over the course of a long career in health information technology—both in and outside of academia. Recently, his health-economics consultancy was tapped to advise the Centers for Medicare and Medicaid Services, in charge of implementing Medicare fraud-mitigation practices.

“Double down on Big Data,” Parente says. “I understand that people have issues with privacy, but if they understood that having this data be shared—which most people are OK with; their data is being shared when they shop online—then they will be hassled less and the system will be made whole.”

In this issue’s feature on Medicare fraud, writer Joe Eaton notes that research by Parente predicted that, if implemented correctly, credit card-style predictive analytics could stop $18 billion of the $60 billion in fraudulent Medicare payments every year.

“If you really want to make the system better, what you have to do is get more data to merge into the analysis,” Parente says. “If you have more data, you can kind of triangulate what you need to predict fraud.”

For example, whether you’re using a social app like Foursquare to “check in” to a destination or opening Google Maps for directions, your smartphone is constantly collecting location data. This, Parente says, could be used to better regulate false Medicare claims.

“If a claim says a person is in one place and they’re really not, the transaction information that’s married up with that can basically say there’s no way that could have ever happened,” Parente says.

The benefits of sharing and utilizing more data are multifold. It will help detect more fraudulent claims, which financially benefits both patient and provider, and shared medical information could also quickly increase the quality of genomic testing and personalized medicine; more information available to doctors and scientists makes for higher-quality research.

But Big Data is a loaded term, bringing to mind images of corporate vultures looking to sell your privacy for profit. “It’s cultural—people are obsessed with privacy in the United States,” says Parente, who also teaches in Sweden and is struck by that country’s openness. “‘We share all our data down to our Social Security number—we don’t care. We see the benefits are valuable,’” Parente says one Swedish student told him.

Parente hopes that his research will act as a metaphorical Trojan horse for Big Data in the U.S.—once people see the benefits it can bring, he says, there will be more of an effort to have data collection integrated in a more structured way.


  • Affiliation: University of Minnesota
  • Titles: Professor, Department of Finance; Minnesota Insurance Industry Chair of Health Finance, Carlson School of Management; Director, Medical Industry Leadership Institute
  • Education: BA, 1987, Health and Society; MS, 1988, Public Policy Analysis; MPH, 1989, Health Economics; Ph.D., 1995, Health Finance and Organization
  • Areas of Focus: Health economics, health insurance, health information technology, medical technology
  • Work Outside Academia: Health policy adviser for Senator John McCain’s 2008 presidential campaign; legislative fellow in the office of Senator John D. Rockefeller IV; managing principal of Health Systems Innovation Network

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