Baseball Analytics Legend, Billy Beane, Speaking at Healthcare Analytics Summit™ 2014
The story of Billy Beane’s pursuit of baseball dominance using less money and more data-driven analytics is an inspirational one. I am very excited that he will be speaking at the Healthcare Analytics Summit in September 2014 because healthcare could take some lessons from baseball in this case.
Beane, General Manager for the Oakland Athletics, upended the baseball industry using a revolutionary, data-driven way of picking prospects. The traditional way of evaluating baseball players involved basic statistics, like batting averages and speed, and the subjective judgment of scouts and executives. Picking new players was more of an art than a science. It was an expensive science. The players who had the best of these traditional numbers and who looked the best to scouts could demand higher-paid contracts. There had to be a way to find under-valued players; those players who could get wins at a fraction of the cost.
As documented in the book, Moneyball, by Michael Lewis, Beane, his former Assistant General Manager Paul DePodesta, and their team used statistical analysis to find the top baseball players available for the least amount of money. They believed that the most efficient players could be found using new data and new methodologies for analyzing that data. For instance, a player’s slugging percentage, along with his on-base percentage combine to form a reliable measure his overall offensive production. It’s a better predictor than the traditional Triple Crown stats (batting average, home runs, and runs batted in). Since everyone else was paying big bucks to the guys with the highest batting averages or the most home runs, the players with the highest slugging and on-base percentages could be picked up for relatively cheap. It’s called “Moneyball.”
Beane’s Oakland Athletics competed with teams that had much larger payrolls. His team’s payroll for the 2002 season was $41 million; the New York Yankees, by contrast, spent over $125 million in payroll that same year. Yet, the Athletics made it to the playoffs in both 2002 and 2003, proving that you don’t need to spend the most to play with the best. It’s an incredibly efficient way to form a winning baseball team. So efficient in fact that today, most teams use Moneyball-like methods to pick their players, and the Athletics no longer have an advantage, according to a 2011 interview Lewis did with the San Francisco Chronicle.
There are many lessons for healthcare in this story. As a data-heavy industry traditionally driven by the “art of medicine” (rather than the science of medicine), healthcare can be inefficient and full of waste. Beane and the Athletics front office set out to reduce the art and subjectivity of their decision-making, creating a more efficient way to do business. At his speech in September, Moneyball: Lessons for Life And Business, Beane will show us the parallel between his approach in baseball and the potential for healthcare analytics.
Beane is just one of the speakers scheduled for the Healthcare Analytics Summit on September 24 and 25. Please plan on joining us for an in-depth look at how analytics can enable healthcare transformation for every organization. Sign up soon because registrations are running three times above our best-case scenarios. At this pace, we know we will run out of room early, even as early as late July or beginning of August.