How AI Plays Its Tricks: Interpreting the Superior Performance of Deep Learning-Based Approach in Predicting Healthcare Costs

17 Pages Posted: 18 Nov 2018

See all articles by Weiguang Wang

Weiguang Wang

University of Maryland, Robert H. Smith School of Business

Margret Bjarnadottir

University of Maryland - Robert H. Smith School of Business

Guodong (Gordon) Gao

University of Maryland - R.H. Smith School of Business

Date Written: October 28, 2018

Abstract

Artificial Intelligence, especially deep learning based approaches, has been criticized for its \black-box" approach in recent years. The lack of interpretability of their performance makes people uncomfortable when applying these models in critical situations. In this study, we aim to contribute to the interpretability of the deep learning model in predicting healthcare costs. We propose to use long short-term memory based recurrent neural network to incorporate the sequential information for more accurate healthcare cost predictions. We first compare the performance of our deep learning approach with traditional machine learning methods including linear regression, lasso regression, ridge regression, and random forest. Among all the methods, deep learning shows the best performance. The superior performance of the deep learning model is further confirmed in subgroup analyses of patients. We then propose a novel interpretation method to examine how the deep learning model performs differently from other methods when facing fluctuations in the monthly costs. We find that while most traditional prediction models are getting worse with greater fluctuation in the data, the deep learning model can incorporate the fluctuation information and gain in prediction accuracy. Our work makes important contributions to the interpretability of deep learning models for more accurate prediction of healthcare costs.

Keywords: Deep Learning; Interpretability; Health Care; Cost Prediction

Suggested Citation

Wang, Weiguang and Bjarnadottir, Margret and Gao, Guodong (Gordon), How AI Plays Its Tricks: Interpreting the Superior Performance of Deep Learning-Based Approach in Predicting Healthcare Costs (October 28, 2018). Available at SSRN: https://ssrn.com/abstract=3274094 or http://dx.doi.org/10.2139/ssrn.3274094

Weiguang Wang (Contact Author)

University of Maryland, Robert H. Smith School of Business ( email )

College Park, MD
United States

Margret Bjarnadottir

University of Maryland - Robert H. Smith School of Business ( email )

College Park, MD 20742-1815
United States

Guodong (Gordon) Gao

University of Maryland - R.H. Smith School of Business ( email )

4325 Van Munching Hall
College Park, MD 20742
United States

HOME PAGE: http://www.rhsmith.umd.edu/faculty/ggao/

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