Recently Entreprov had the opportunity to start hosting a monthly meetup focused on how Data Analysis can solve business problems. We were able to feature Ben Rogojan, the founder of The Seattle Data Guy. His talk on Fraud Detection was eye-opening to the challenges the medical industry faces with fraud. In this article, we will give a summary of his talk and how Statistical Modeling impacts the industry.

How Big is Fraud in the Medical Insurance Industry?

Insurance fraud costs us more than what most people would expect in the United States. Ben states in the beginning of the talk that fraud costs the US $68 billion dollars annually. These statistics made me think about the number of trips to the doctor and the probability of being a victim of fraudulent practices. With billions of dollars being wasted and monumental amounts of data collected, this is a prime industry for data science to be tested.

Challenges Faced By Data Scientist in The Industry

Although tons of data exist in the industry, there are several major challenges to building successful models. Lacking access to data was one of the major challenges Ben discussed during his talk. Some forms of data have restrictions on who can have access. Another challenge was weighing the ROI on investigating certain fraudulent data versus other data.

Developing Statistical Models To Detect Fraud

Although the medical insurance industry will continue to have fraud cases for years to come due to its size, the data science world has started to chip away at the problem. Ben suggest focusing on one category at a time to develop focus. Once you’ve identified a single category, seek out industry experts to gain an understanding how the industry operates. In conclusion to seeking field related professionals, you will speed up your learning curve and start developing niche-specific questions. After you have a solid understanding of the business problem, choosing a model comes next on the list of objectives.

Ben has spent his career focused on all forms of data. He has focused on developing algorithms to detect fraud, reduce patient readmission and redesign insurance provider policy to help reduce the overall cost of healthcare. To learn more about Ben, check out his company


Alex Brooks is the founder and CEO of AE Brooks, LLC (d/b/a, Entreprov), a Seattle-based firm that builds custom predictive analytics and automation tools to enhance a company’s performance and decision making.