For the exclusive use of P. FCSH, 2022.

BAB266
OCTOBER 2014

Fargo Health Group:

Managing the Demand for Medical Examinations
Using Predictive Analytics
The Fargo Health Group Case
The history of Fargo Health Group dates back to 1916, when Dr. Nathaniel Scott Fargo
settled in Birmingham, Alabama, and opened his gastroenterological health clinic under the
name Birmingham Gastro. His ambitions and dedication to medicine were passed on to his
sons, Drs. Daniel Paul Fargo and Charles Anthony Fargo. The two joined their father’s practice
in 1932 and 1936, respectively. In the 1940s, the reputation of the clinic was burgeoning and the
quality of the health care it provided to its patients was no longer a secret. The Fargo family
decided to extend the healthcare services provided by their practice by inviting other doctors
and scientific researchers to join them. Within a few years, the practice was already providing a
wide spectrum of healthcare services, from podiatric medicine to audiology. In 1952, the practice
was renamed Fargo Health Group.

Fargo Health Group initially struck some traditional health care practitioners as
unorthodox due to its dedication to practicing medicine through teamwork. Over the years,
however, as the name of the organization was becoming a brand among patients and as Fargo’s
medical success stories were spreading by word of mouth, public acceptance was inevitable. The
key to Fargo’s success was the new model of medicine in which the knowledge and skills of
physicians from various specializations were “pooled” together for the benefit of their patients
and the quality of healthcare. Today, Fargo operates through 34 clinics across the United States.

This case was prepared by Davit Khachatryan, Assistant Professor of Statistics & Analytics at Babson College, based
on published sources. It was developed as a basis for class discussion rather than to illustrate effective or ineffective
handling of an administrative situation. It is not intended to serve as an endorsement, source of primary data or
illustration of effective or ineffective management.

Copyright © 2014 Babson College and licensed for publication to Harvard Business Publishing All rights reserved.
No part of this publication can be reproduced, stored or transmitted in any form or by any means without prior
written permission of Babson College.

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 For the exclusive use of P. FCSH, 2022.
BAB266
OCTOBER 2014
Fargo Health Group: Managing the Demand for Medical Examinations Using Predictive Analytics

Among its current services, Fargo provides disability compensation benefits to thousands of
patients every year. The total compensation paid to patients in 2013 reached $2.25 million. The
Quality Assessment Office (QAO) of Fargo is responsible for the collection of disability
examination data from the 34 clinics and the subsequent analysis of that information. The QAO
serves as a think-tank that oversees the disability examination process throughout the entire
country and consults individual clinics on how to improve the quality of health care and how to
enhance customer satisfaction with the disability examination process.

The disability examination process starts with the patient submitting a request for disability
compensation to one of the organization’s 34 Local Offices (LOs). A customer representative
from the LO subsequently assists the patient in the evaluation of the request, and either self-
adjudicates it on the basis of the relevant information already available at the LO or, as is often
the case, forwards the request to one of Fargo’s 34 Health Centers (HCs), requesting that the HC
perform the necessary disability examinations. It is mandated by Fargo management that HCs
complete and send back the results of disability examinations within 30 days after the receipt of
the request from the LO. In other words, the HC’s clock starts ticking the day it receives the
request, and it has only 30 days to complete the request and report the results back to the
requesting LO. Each day beyond the allocated 30-day timeframe costs Fargo $200 worth of fines
paid to the Regional Office of Health Oversight (ROHO). Obviously, such overdue examinations
negatively impact the health and wellbeing of patients as well as the reputation and financial
condition of Fargo.

In actuality, however, due to the lack of examining physicians, HCs often do not have the
capacity to meet the mandated 30-day timeframe. In such circumstances, the HCs are late
completing the requested examinations and, as a result, often report back late to the LOs, thus
exceeding the 30-day deadline. Alternatively, when HC management foresees the potential delay
when receiving the request, the HC sometimes returns the request to the requesting LO right off
the bat, together with the explanation that the rejection stems from the HC’s being understaffed.
In the latter case, the LO then reroutes the request either to other Fargo HCs in the vicinity (an
infrequent scenario) or, more frequently, to one of the neighboring out-of-network Outpatient
Clinics (OCs) with the hope that the OC will find the available staff and perform examinations
on a timely basis. It should be stressed that, since the OCs don’t belong to Fargo’s network, each
request examined by an OC costs on average $1,250 more than the amount that Fargo would pay
for an in-house examination of the request, had there been adequate in-house capacity. In
addition, while the HCs are managed by Fargo and are thus required to abide by the 30-day
deadline, there is no guarantee that the OCs will, since, as mentioned above, the OCs are not in
Fargo’s network. Thus such rerouting of requests from HCs to OCs represents yet another major
financial and reputational burden for the organization. The diagram of the disability
examination process for a hypothetical medical request consisting of 3 examinations is
displayed below.

This document is authorized for use only by Posgrados FCSH in MEDE 16 taught by ESPOL TECH EP, Escuela Superior Politecnica del Litoral (ESPOL) from Oct 2022 to Apr 2023.
 For the exclusive use of P. FCSH, 2022.
BAB266
OCTOBER 2014
Fargo Health Group: Managing the Demand for Medical Examinations Using Predictive Analytics

During the last end-of-year management meeting, Jay Rubin, the Director of QAO, stressed
the importance of an accurate, data-driven planning of examining physicians at the HCs.
According to Mr. Rubin, predictive analytics is what the organization needs to reduce the costs
to the OCs as well as the fees paid to ROHO. QAO collects and hosts extensive data on historical
incoming examination volumes from each of the 34 Fargo clinics and for each examination type.
Mr. Rubin shared with the management (and later in the afternoon with Anthony Bryant, the
CEO of Fargo Health Group, who was absent from the meeting) his vision: that if the HCs are
somehow able to “learn” from the historical request volumes, then that could potentially lead to
a more effective scheduling of examining physicians at the HCs. According to Mr. Rubin, history
may not necessarily repeat itself, but it can provide clues on what may be happening in the
future.

It should be mentioned that, for a long time, Mr. Rubin’s data-analytic vision had been
politely welcomed by the upper management at the organization with the only obstacle being
that Fargo did not have the appropriate staff to commit to such a major undertaking. Perhaps it
was due to this reason that Mr. Rubin half-sarcastically stated that, “If for the last ten or so years

This document is authorized for use only by Posgrados FCSH in MEDE 16 taught by ESPOL TECH EP, Escuela Superior Politecnica del Litoral (ESPOL) from Oct 2022 to Apr 2023.
 For the exclusive use of P. FCSH, 2022.
BAB266
OCTOBER 2014
Fargo Health Group: Managing the Demand for Medical Examinations Using Predictive Analytics

we could afford Local Offices to contract out our requests to third-party OCs, then I guess we
should be able to contract out the development of this predictive model, or should we not?” On
the evening of that same day, Fargo issued a contract seeking external efforts to conduct a pilot
study that could lead to the development of the predictive analytic product that Mr. Rubin has
advocated over the years, and which could help Fargo accurately guess the incoming volume of
medical requests and thus use that information to improve the scheduling of physicians.

Assignment Details
You and your team submitted a proposal for the pilot-study with Fargo Health Group, and
have recently been notified that you are being awarded the contract. Your team’s task on this
urgent assignment is to propose a data-driven approach that will effectively accomplish Mr.
Rubin’s vision. To arrive at the procedure, you are provided a dataset, culled from Fargo Health
Group’s data repositories, on the historical monthly examination volume of cardiovascular
examinations from the HC located in Abbeville, Louisiana.

Your client company (Fargo) is looking for two things: a presentation/pitch to the
management explaining the data-driven approach for anticipating the incoming cardiovascular
examination volume at the Abbeville HC, and a written deliverable report detailing your
approach. The deadlines for both the presentation and the report will be announced by the
instructor at the project kick-off. During the final presentation, the management of your client
company expects that your engagement team will:

 Present the business problem and emphasize the necessity for a data-analytic solution;
 Clearly explain your team’s data-analytic approach to tackle the business problem that
your client is facing;
 Explain the nature and structure of the received data, and how data inconsistencies and
issues were resolved by your team;
 Apply the data-analytic approach that your team designed using the data that were
received and “cleaned” by your team. The team also needs to elaborate on all the
undertaken modeling and forecasting approaches by clearly comparing and contrasting
them;
 Emphasize and summarize the key findings as well as observations, and recommend
further steps that your client should undertake in the data-analytics realm, which could
potentially lead to another engagement with your consulting team;
 Fit the presentation within the allocated timeframe;
 Deliver the presentation in a way that is well-organized and accessible to both technical
and non-technical audiences; and
 Provide clear and thorough answers to all the questions asked by the client.
 Note that each presenter will have anywhere from 3 to 5 minutes for his/her pitch,
except for the first presenter who will both open up the presentation for 3-5 minutes and
conclude it for another 3-5 minutes.
 The management expects that in the written deliverable report your engagement team
will:
 Discuss the business problem and the data-analytic approach undertaken by your team
for solving it;
 Explain in detail how each data inconsistency/issue (outlier, missing value, duplicates,
etc.) was resolved prior to the analysis;

This document is authorized for use only by Posgrados FCSH in MEDE 16 taught by ESPOL TECH EP, Escuela Superior Politecnica del Litoral (ESPOL) from Oct 2022 to Apr 2023.
 For the exclusive use of P. FCSH, 2022.
BAB266
OCTOBER 2014
Fargo Health Group: Managing the Demand for Medical Examinations Using Predictive Analytics
 Carefully apply the data-driven approach that your team designed to the data that you
received and “cleaned.” Employ the necessary technical sophistication and depth,
including but not limited to accurate residual diagnostics, model fitting summaries, and
model validation; and
 Clearly lay out all the assumptions behind both the data-analytic approach and the time
series models that you used.
 Note that there is no set page limit for the written deliverable report. The report should
be typed in Times New Roman 12-size font using 1-inch margins on both sides of each
page. In addition, page numbers and double spacing are required throughout the entire
document. All figures and tables should have clear captions and legends, and should be
appropriately referenced within the text. In addition, figures must have clearly labeled
axes. The report should be spell-checked and follow the proper rules of grammar.
 You have a unique opportunity to help Fargo Health Group to better plan for the
incoming examination demand, and thus enhance the quality of its service in providing
state of the art health care to patients. Good luck on your important mission.

Logistics and Organization

The engagement team will be formed by the instructor prior to the engagement kick-off.
The team will consist of either 5 or 6 members. Throughout the entire project, the team
members are expected to collaborate. Rather than solely focusing on individual tasks, each
student is expected to take full ownership of the engagement and add her/his contribution in all
stages of the work. Collaboration is in the best interest of each student, in light of the fact that
each team member gets the same grade for the written deliverable report. At the completion of
the project, students will be required to submit a peer-evaluation assessing the collaborative
skills and effectiveness of their team members.

The instructor will serve as the “client” for the engagement. As such, the instructor will
promptly address any questions, which should be addressed by email or in person during
scheduled status updates or extra appointments scheduled by the team. Notice that students are
expected to have meaningful questions regarding the data inconsistencies (outliers, missing
data, etc.) during the scheduled status update meeting, at the latest. It should be emphasized
that a number of subtleties regarding the data are left out from the caselet and are instead
supposed to be brought to light as a result of thoughtful and relevant questions asked by
students during the first status update meeting, at the latest. Note that, while clearly answering
the questions asked by the team, the instructor will not provide solutions but may instead direct
the teams towards the right approach in case the team is significantly off track with its approach.
During the final presentation, the team is expected to defend its approach by clearly
demonstrating how it works and by carefully addressing all of the instructor’s questions.

Following the engagement kick-off, the engagement team has to determine internally how
to split the tasks among its team members, and who will present what, during the final
presentation. However, there are fixed responsibilities that the instructor has pre-defined for
students to choose from. Note that the role that a student assumes throughout the engagement
should match his/her role during the presentation. For example, the student responsible for
cleaning the data has to present about the data cleaning efforts. The structure of the
presentations for both 5-member and 6-member teams is outlined below. During the first
internal team discussion/meeting, the engagement team should distribute the exact roles by
choosing those from the second column of the corresponding table below.

This document is authorized for use only by Posgrados FCSH in MEDE 16 taught by ESPOL TECH EP, Escuela Superior Politecnica del Litoral (ESPOL) from Oct 2022 to Apr 2023.
 For the exclusive use of P. FCSH, 2022.
BAB266
OCTOBER 2014
Fargo Health Group: Managing the Demand for Medical Examinations Using Predictive Analytics

For 5-member Teams

Team Role

Member

A Explain the business problem that the team is

trying to solve and provide a background of the
subject matter (3-5 minutes)
B Explain the structure of the data, the cleaning
of the data, and the data-analytic solution (in a
nutshell) that the team is proposing (5
minutes)
C Present the analysis of the 1st time series model
that was used to model the data (5 minutes)
D Present the analysis of the 2nd time series
model that was used to model the data (5
minutes)
E Present the analysis of the 3rd time series
model that was used to model the data (5
minutes)
A Compare models 1-3 and conclude the
presentation (3-5 minutes)

For 6-member Teams

Team Role
Member
A Explain the business problem that the team is
trying to solve and provide a background of the
subject matter (3-5 minutes)
B Explain the structure of the data, the cleaning
of the data, and the data-analytic solution (in a
nutshell) that the team is proposing (5 minutes)
C Present the analysis of the 1st time series model
that was used to model the data (5 minutes)
D Present the analysis of the 2nd time series model
that was used to model the data (5 minutes)
E Present the analysis of the 3rd time series model
that was used to model the data (5 minutes)
F Present the analysis of the 4th model (can be
any model, not necessarily a time series model)
that was used to model the data (5 minutes)
A Compare models 1-4 and conclude the
presentation (3-5 minutes)

This document is authorized for use only by Posgrados FCSH in MEDE 16 taught by ESPOL TECH EP, Escuela Superior Politecnica del Litoral (ESPOL) from Oct 2022 to Apr 2023.
 For the exclusive use of P. FCSH, 2022.
BAB266
OCTOBER 2014
Fargo Health Group: Managing the Demand for Medical Examinations Using Predictive Analytics

The engagement team will email the instructor, no later than the date set by the instructor at the
engagement kick-off, of the exact task assigned to each member.

Scheduled Status Updates and Deliverables

The following is the list of the status updates and deliverables that the engagement team is
required to adhere to. The deadline for each of these action items will be announced by the
instructor at the engagement kick-off.

Action Item Description

Breakdown of Engagement team notifies the instructor of the role that
Responsibilities each team member is responsible for throughout the
engagement;
First Status Engagement team meets with the instructor to clarify the
Update data-related questions. Questions pertaining to definitions
of data attributes, and nature of missing values and
outliers, as well as data dictionaries, all are particularly
relevant at this meeting. At the end of the meeting, the
team is expected to have a solid understanding of the data
and should be ready for subsequent data cleaning;
Second Status Engagement team meets with the instructor to provide an
Update update on data cleaning/preparation efforts as well as on
the formulation of their data-analytic approach. Relevant
topics of discussion include but are not limited to
resolution of missing values, outliers, and duplicates, as
well as the logic behind the data-analytic method. It is
expected that at the end of this meeting, students are able
to successfully complete the data preparation and enter
the modeling stage of the engagement;
Presentation Engagement team presents its work. After delivering the
presentation, engagement team is expected to put the
finishing touches on the written report before the
submission;
Deliverable Engagement team delivers the written report;
Report
Peer Each team member evaluates the effectiveness of her/his
Evaluations peers through an online peer evaluation survey.

This document is authorized for use only by Posgrados FCSH in MEDE 16 taught by ESPOL TECH EP, Escuela Superior Politecnica del Litoral (ESPOL) from Oct 2022 to Apr 2023.
 For the exclusive use of P. FCSH, 2022.
BAB266
OCTOBER 2014
Fargo Health Group: Managing the Demand for Medical Examinations Using Predictive Analytics

Grading
To evaluate the objectives outlined above, each student’s performance on this caselet may
be assessed in line with the scheme below, varying the component weights as the instructor
finds appropriate:

Grading Component Weight

Presentation 20%

Deliverable Report 60%

Received Peer Evaluation 10%

Submitted Peer Evaluation 10%

Each student’s overall grade for the caselet will be based on:

 Student’s presentation to the class. This component will be graded based on the overall
soundness of the presented content, as well as student’s presentation and
communication skills;
 A written deliverable report that the team will submit on the date set by the instructor at
the engagement kick-off. Each team submits a single deliverable and each team member
gets the same grade for the report. The grading of this component will be strictly based
on technical soundness, accuracy, breadth, and depth of the content;
 Peer evaluations, submitted by the student’s team members on the date set by the
instructor at the engagement kick-off, assessing the student’s effectiveness when working
with his/her team members;
 A peer evaluation, which the student will submit on the date set by the instructor at the
engagement kick-off, assessing the effectiveness of his/her team members. Note that
simply submitting the completed evaluation will earn the student the 10% of the project
grade outlined in the table above.

This document is authorized for use only by Posgrados FCSH in MEDE 16 taught by ESPOL TECH EP, Escuela Superior Politecnica del Litoral (ESPOL) from Oct 2022 to Apr 2023.