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We would take a cohort of patients and split them into a test group (which would take the food, drug or receive the medical procedure) and a control group (which would be given a placebo). Professionals or even the general public (note that this is not a problem for unskilled people to participate, by adding noise and losing money on those markets, they make professional forecasting more profitable leading to better results) can bet on the outcome metrics of the study. Outcome metric can be:
  • Difference of survival rate between the test group and the control group.
  • Reported quality of life between the test group and the control group.
In the short term, we expect those data points to be used in order to decide on which kind of treatment to focus research on and by sophisticated (i.e. patient doing their own research when different treatments are proposed) to make decisions which concern them. In the medium term, those data points could be reported in the literature and be used as insight by medical professionals when it comes to proposing treatments. In the long term, we could even have state health authorities adopting prediction markets in their process of approval of drugs and medical procedures (requiring higher predicted survival rate and quality of life for patients undertaking the procedures). In some specific cases, it may be very difficult to have a control group (as patients wouldn’t accept an important life decision to be just taken at random depending on which group they end up in). In this case, patients would choose whether or not to undertake the procedure and the metric being predicted would be their rate of regret. This would be the case for predicting the outcome of gender dysphoria treatment. This would be an extremely interesting market to start with as this is such a polarising topic that it’s impossible to distinguish between medical and ideological information on the topic. And the polarising nature of the problem would draw a large amount of attention (thus ideological betting) making it an interesting market for people with serious insight on the topic.