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The disease progression dynamics observed in electronic health records often reflect patients’ health condition evolution, holding the promise of enabling the development of clinical predictive models. These dynamics, however, generally display significant variability among patients, due to some critical factors (e.g., gender and age) and patient-level heterogeneity. Moreover, future health state may not only depend on the current state, but also more distant history states due to the complicated disease progression. To capture this complex transition behavior and address mixed effects in clinical prediction problems, we propose a novel and flexible Bayesian Mixed-Effect Higher-Order Hidden Markov Model (MHOHMM), and develop a classifier based on MHOHMMs. A range of MHOHMMs are designed to capture different data structures and the optimal one is identified by using the k-fold cross-validation approach. An effective two-stage Markov chain Monte Carlo (MCMC) sampling algorithm is designed for model inference. A simulation study is conducted to evaluate the performance of the proposed sampling algorithm and the MHOHMM-based classification method. The practical utility of the proposed framework is demonstrated by a case study on the acute hypotensive episode prediction for intensive care unit patients. Our results show that the MHOHMM-based framework provides good prediction performance.