{"id":31319,"date":"2018-11-14T10:25:16","date_gmt":"2018-11-14T15:25:16","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/making-the-leap-can-machine-learning-take-root-in-animal-healthcare\/"},"modified":"2018-11-14T10:25:16","modified_gmt":"2018-11-14T15:25:16","slug":"making-the-leap-can-machine-learning-take-root-in-animal-healthcare","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/making-the-leap-can-machine-learning-take-root-in-animal-healthcare\/","title":{"rendered":"Making the Leap: Can Machine Learning Take Root in Animal Healthcare?"},"content":{"rendered":"

Companion animals are firmly established as full-fledged members of today\u2019s modern family.\u00a0 As a result, veterinary and related services spending has grown tremendously (9.0% CAGR from 1980-2017 for veterinary-related spending relative to 5.6% for broader personal consumption) and the standard of care available to our four-legged friends has made tremendous improvements in beginning to narrow the gap between human and animal medicine.[1]<\/a>\u00a0 Artificial intelligence research and associated product developments have become mainstays in human healthcare.[2]<\/a>\u00a0 Now, IDEXX Laboratories is making the first move in the animal healthcare field to deploy machine learning with its new in-house urinalysis machine, SediVue Dx.\u00a0 The potential for future product development incorporating machine learning is enormous; however, the jury is out as to whether veterinarians and pet owners will embrace the big data revolution.<\/p>\n

Research and development is a cornerstone of IDEXX\u2019s strategy \u2013 the firm spends over 80% of the identifiable R&D dollars in the animal healthcare diagnostics industry.[3]<\/a>\u00a0 IDEXX boasts an expansive network of reference labs, owns one of the leading practice management software packages, and develops in-house diagnostic machines that are fully integrated into the workflow of its client clinics.[4]<\/a>\u00a0 With its launch of SediVue Dx in early 2016, IDEXX gambled that the industry is ready to embrace machine learning from a clinical and economic standpoint.\u00a0 Sedivue Dx is a machine that analyzes urine specimens using IDEXX\u2019s proprietary \u201cNeural Network 3.0\u201d technology<\/a>.[5]<\/a>\u00a0 By utilizing machine learning software, SediVue Dx evaluates multiple images of a urine specimen for abnormalities such as the presence of blood cells, epithelial cells, bacteria, casts, and crystals.\u00a0 Comparing each image against a database of millions of other specimens that have already been analyzed and categorized, SediVue Dx returns images from the original specimen that are annotated with text and graphics that identify specific abnormalities.[6]<\/a><\/p>\n

Last year, I led a pilot at the largest private owner of animal hospitals in North America to determine whether adopting the SediVue Dx into our clinics would add value clinically and financially.\u00a0 Our pilot illustrated both the promise of the technology and the limitations currently causing initial adoption to be somewhat muted.\u00a0 First, the machines and associated consumables are dramatically more expensive than sending the specimens to IDEXX\u2019s reference lab for review or evaluating specimen in-house using a centrifuge and microscope.\u00a0 Additionally, the image outputted by the SediVue Dx requires the veterinarian to interpret the results to determine a course of action and many clinicians required refresher training given that the last time they had analyzed a urine specimen was back in veterinary school.\u00a0 The product itself continues to advance as its algorithms improve the accuracy with which it can identify abnormalities in the specimens, but versions 1.0 and 2.0 of the Neural Network technology were plagued by errors.<\/p>\n

IDEXX\u2019s commitment to deploying machine learning in animal healthcare should be heralded, but it must take dramatic action in the short and medium term to regain momentum to ensure that incremental product developments and new product launches incorporating the technology are well received.\u00a0 In the short run, IDEXX must continue to refine its Neural Network technology to ensure that SediVue Dx continues to improve its clinical accuracy and offer even more training to veterinarians and clinicians about how to evaluate the annotated output images.\u00a0 From an economic standpoint, much more work needs to be done to prove that shifting urinalysis volume from the reference lab to SediVue Dx in-house will lead to incremental treatments that will justify the higher relative costs.<\/p>\n

Over the medium term, IDEXX has a tremendous opportunity to take its learnings from its initial machine learning launch and apply the technology to its existing portfolio of in-house diagnostics.\u00a0 IDEXX has tremendous amounts of clinical data from its reference labs and should investigate using machine learning to identify potential gaps in the industry\u2019s current product.<\/p>\n

As the company looks to the future, key questions remain.\u00a0 Do its investments in machine learning make financial sense given its position as one of the two dominant players in an industry that is essentially a duopoly?\u00a0 Can it recoup its significant R&D expenditures related to SediVue Dx and future machine learning products by charging higher prices to animal hospitals who may be warry of passing on these prices to pet?<\/p>\n

(Word Count 800)<\/p>\n

[1]<\/a> Credit Suisse, \u201cIDEXX Laboratories: The 2018 Maine Event,\u201d August 17, 2008, via Thomson Reuters\/Investext, accessed November 2018, 5.<\/p>\n

[2]<\/a> Yu, K., Beam, A. and Kohane, I. (2018). Artificial intelligence in healthcare.\u00a0Nature Biomedical Engineering<\/em>, 2(10), pp. 719-731.<\/p>\n

[3]<\/a> \u201cIDEXX Growth Strategy\u201d (PDF file), downloaded from IDEXX website, https:\/\/idexxcom-live-b02da1e51e754c9cb292133b-9c56c33.aldryn-media.com\/filer_public\/bf\/b7\/bfb75df1-2586-4f92-a017-100353d4492d\/20180815-idexx-investor-day.pdf<\/a>, accessed November 13, 2018, 17.<\/p>\n

[4]<\/a> IDEXX Laboratories, 2017 Annual Report, p. 6, https:\/\/idexxcom-live-b02da1e51e754c9cb292133b-9c56c33.aldryn-media.com\/filer_public\/03\/ae\/03ae8315-1723-4639-9a3c-e9d3606f941e\/2017-10k.pdf<\/a>, accessed November 2018<\/p>\n

[5]<\/a> \u201cIDEXX Advances Power of SediVue Dx with Latest Software Update,\u201d press release, February 5, 2018, on IDEXX website, https:\/\/www.idexx.com\/en\/about-idexx\/news\/idexx-advances-power-sedivue-dx-latest-software-update\/<\/a>, accessed November 2018, 1.<\/p>\n

[6]<\/a> IDEXX Laboratories, \u201cSediVue Dx Urine Sediment Analyzer,\u201d https:\/\/www.idexx.com\/en\/veterinary\/analyzers\/sedivue-dx-analyzer\/<\/a>, accessed November 2018.<\/p>\n","protected":false},"excerpt":{"rendered":"

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