The tech world can’t stop talking about blockchain, and nowhere is that more apparent than in the healthcare sector. As one HealthTech contributor put it, “it was impossible to ignore the growing buzz around blockchain at HIMSS 2018 in Las Vegas.”
But behind the buzz and hype, what are the substantial ways that blockchain will change healthcare, and where will we see these developments first?
Healthcare Data Today, Blockchain Tomorrow
Before answering that, let’s review the importance of blockchain and data in healthcare.
We’ve all heard about blockchain, which underpins the world’s most popular and hyped cryptocurrency, Bitcoin. Blockchain, defined as “a shared public ledger, also known as a distributed database” records data and transactions in a distributed (and therefore transparent) manner. Gartner estimates that the value of blockchain technologies and solutions will reach $176 billion by 2025 and over $3.1 trillion by 2030. Deutsche Bank predicts blockchain systems to record transactions representing 10% of worldwide GDP by 2027.
So, why is healthcare especially ripe for disruption by blockchain?
It’s all about the data.
One Zacks analyst puts it this way: “Given the rising need for integrating data across plans and providers, the healthcare sector is poised to gain the most from blockchain’s distributed ledger technology.”
Gain the most?
Strong words. But Oscar Health co-founder/CEO Mario Schlosser (HBS MBA Class of 2007), reiterates this importance of data in explaining Oscar’s journey as a health insurance marketplace.
As with other healthcare companies and organizations, one of the keys to Oscar’s model depends on “using real-time data to get actionable insights in front of members and physicians,” says Schlosser.
As a result, blockchain “has the power to revive the healthcare industry by reorganizing operations, generating new business models and integrating patients’ medical records,” according to Zacks.
The latter of these represent two ways blockchain is most likely to change healthcare in the short-run.
Changes to Patients’ Health Records & Medical Data
Electronic health records (EHRs) have been serving as the underlying medical data system-of-record since the accelerated adoption by healthcare providers following the passage of American Recovery and Reinvestment Act of 2009, tied to the Meaningful Use deadline.
Proprietary EHR systems powered by companies like Epic, Cerner, athenahealth and others now store voluminous amounts of patients’ critical health data. But they have not coalesced to become a “national health information backbone” as athenahealth CEO/founder Jonathan Bush (HBS MBA Class of 1997) puts it.
“We’ve got a bunch of closed, kind of information-hoarding soviets that are not good,” said Bush in 2013. “So that needs to be blown up in a new model.”
Now in 2018, Bush’s predicted blow-up may now be upon us.
Blockchain is a distributed, validated data ledger, not a database. So, while it will not replace EHRs, it can now support a more secure, universally-accessible and comprehensive system-of-record.
“Blockchain is very useful for proof-of-work, auditing and data integrity,” says John D. Halamka, M.D., CIO of the Beth Israel Deaconess Medical Center. “Blockchain can prove that medical records are complete and unmodified…[and] can record patient consent for data sharing, enhancing interoperability.”
“Currently, a patient’s medical history is a puzzle with its pieces dispersed across multiple providers and organizations,” writes Forbes contributor and President of Protenus Robert Lord. “Blockchain could help us assemble all of these pieces in real-time and view the entire picture of a patient’s health, with the confidence of knowing it’s both comprehensive and up-to-date.”
This highly distributed, secure, worldwide access to patients’ health data is groundbreaking, providing universal authenticated access to patients’ medical records anywhere in the world.
Changes to Healthcare Pricing & Payment Models
Blockchain will also change how healthcare and medical services are priced and paid. These changes are coming thanks to the enhanced identity management, smart contracts and instant machine-to-machine communication enabled by blockchain.
For example, VC-backed healthcare API company PokitDok has partnered with Intel to offer Dokchain, a standard now supported by dozens of companies including Ascension, Amazon and Guardian. The solution allows claims to be processed in seconds instead of weeks and months. Notably, the solution can also “validate the supply chain,” writes Ron Miller in TechCrunch. “For example, when a doctor writes a prescription, it gets logged on the chain with transparent pricing for the consumer [with] broad implications for inventory and order management of medical supplies and pharmaceuticals.”
WELL, a blockchain-enabled medical service network is another innovative company enhancing key aspects of healthcare service. WELL allows patients to contract with healthcare professionals worldwide, including speciality doctors, therapists and psychologists, while facilitating real-time insurance verification and reimbursement via the company’s cryptocurrency–WELL tokens.
With funding from its Initial Coin Offering (ICO), WELL’s blockchain and asset tokenization facilitate immediate funds transfers by utilizing smart contracts and instantly releasing payments upon completion of milestones (e.g., visits, invoice approvals, et al).
The international, cross-border capabilities of WELL’s provider and compensation network stemming from its blockchain technologies are particularly noteworthy. “Many countries have byzantine laws preventing citizens from making out-of-country payments,” states WELL’s white paper. “When allowed, payments often take days and cost a significant portion of the amounts processed. Additionally, payment can be stopped, significantly increasing the risk of non-payment.”
As exemplified by both WELL and PokitDok, blockchain technologies and asset tokenization will be used to address key issues, including changing traditional healthcare payment and pricing models. In fact, they already are.