ISO Buys Health Care Software Provider

ISO also noted that it will look for ways to utilize DxCG's health care software for property-casualty markets.

"We will use DxCG models to find ways to serve our property-casualty customers as well," said ISO spokesman Christopher Guidette.

He said ISO hasn't yet developed any products incorporating DxCG software, but added that the area that shows the most promise at this point is workers' compensation. "Workers' comp is a line where, as you know, loss costs are driven by medical expenses. So obviously cost-controls and efficiencies in handling and paying medical claims is a primary benefit," Mr. Guidette said.

"Also, we are looking at the bodily-injury components in many of the liability lines, starting with the personal auto and commercial auto," he said. "The future belongs to companies that produce the best analytical and decision-support tools."

DxCG uses medical and pharmacy claims information to predict health care costs and utilization in its models. The firm's modeling software is designed to support health plans, providers and employers as they perform actuarial analyses, structure disease management approaches, manage provider networks, and identify members for care and case management programs.

ISO noted that DxCG models are currently used by more than 175 clients to assign more than $70 billion of health care costs annually.

Since 2000, DxCG has also provided the exclusive predictive modeling methodology used by the federal government to determine reimbursement rates to providers and health plans participating in the Medicare Advantage program, ISO said.

"As the leading provider of data and analytics to the property-casualty insurance industry, we are always looking for innovative ways to assist our customers," said Frank Coyne, chairman and chief executive at ISO, commenting on the acquisition.

Mr. Coyne noted, "We will continue to help health care payors deliver quality patient care while maximizing cost efficiencies as we explore exciting new applications for DxCG's predictive models, including those within the property-casualty market."