Some of Silicon Valley's largest venture capital (VC) firms have been pouring money into Clover Health, a health insurance company that leverages mammoth amounts of data in an effort to pinpoint healthcare issues before they take place and therefore reduce medical costs. The company has raised close to $300 million since 2015, according to Bloomberg. (See also: Who are Venture Capitalists? - Video.)

Generous VC Funding

Mike Dixon, a Sequoia Capital partner who now sits on Clover Health's board, has stated that the health insurance company's efforts to use big data resources could help Clover Health significantly reduce U.S. annual healthcare expenses, which totaled roughly $3.2 trillion in 2015.

Sequoia along with First Round Capital, AME Cloud Ventures and Spark Capital all participated in a Series C funding round  earlier this year that provided Clover Health with $160 million. Sequoia Capital, a firm that has made a name for itself by investing in technology giants such as Google and Apple Inc. (AAPL), has been particularly vocal about Clover Health's prospects.

Big Data on Patients

By leveraging big data,  "We're building a learning machine, and we're using it for health." Vivek Garipalli, co-founder and CEO of Clover, told Bloomberg.

The company's algorithms leverage data analysis to determine which patients need help so Clover Health's nurse practitioners can get involved in their case, according to Fortune. By taking this proactive approach, the health insurance company can reduce healthcare expenses for both patients and insurers. (See also: How Big Data Has Changed Healthcare)

Clover Health pays all the bills for its 19,000 members, which gives the company the ability to constantly gather data on these individuals, including their prescriptions and lab results. Armed with this information, Clover Health can develop continually updating patient profiles. The company has developed its software to sift through this sea of data and pick out abnormalities such as prescriptions that were not picked up, missed doctor's appointments and visits to the emergency room. 

 

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