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Looking Forward: Blockchain And Healthcare

Blockchain is beginning to garner more and more attention in the business media and being touted as the next transformative use of technology across many industries, including healthcare. The most common use of blockchain today is for a variety of cryptocurrencies in circulation around the world, including Bitcoin. However, several industries have begun to look at how blockchain technology can be used to transform their business processes and transaction processing. In a recent research initiative led by IBM, the technology company found 16% of healthcare executives surveyed have plans for implementing blockchain as part of a business transformation effort and 56% are expected to have something in place by 2020.

What is blockchain?

There is some confusion between Bitcoin and blockchain. The easiest distinction is to think of Bitcoin as an application and blockchain as the technology (or network) that Bitcoin operates on. To say it another way, Bitcoin is to blockchain what email (an application on the internet) is to the Internet (the network it operates on).

More precisely, blockchain is a distributed ledger that operates on a peer-to-peer network. Everyone on the chain has a copy of the ledger. The information within those ledgers is referred to as blocks (business transactions), hence, blockchain.

Many people refer to blockchain technology as the “network of trust” because blockchain users can only update the “block” (transaction record) to which they have access. Once a community member on the chain (network) submits an update request, certain participating parties with high powered computers on the chain validate the transaction by running algorithms to evaluate the proposed record update. Once approved, those updates get replicated across all the nodes on the chain (network) so that all other parties are aware of the transaction update that was just made. All entries are time/date stamped, providing a detailed audit trail of all interactions. All data is encrypted and available on everyone’s system (ledger) on the chain.

How is this relevant to the healthcare industry?

The application of blockchain technology for the healthcare industry has multiple potentials for improvement of existing processes, and security of patient information including a sample, as follows:

Single, longitudinal patient records
The quest for the single patient record, compiling episodes, disease registries, lab results, treatments, etc. across multiple provider networks can be achieved with blockchain, without the intrusive need for national patient identifiers. Additionally, such information from wearables, home monitoring devices, etc. can be included in the blockchain.

Processing claims
Since every single transaction on a blockchain is validated before it is committed to the distributed ledgers, claims can be automatically verified where the network agrees upon the way a contract is executed. Also, since there is no central authority, there would be fewer errors and a significant reduction in insurance fraud.

Master patient indices
When dealing with healthcare data, records get mismatched or duplicated. Also, different EHRs have a different schema for every single field, coming up with different ways of entering and manipulating the simplest of data sets. With blockchain, the entire data set is hashed to a ledger, and not just the primary key. The user would look for the address, there can be multiple addresses and multiple keys, but they will all yield to a single patient identification.

Supply chain management
Blockchain-based contracts can assist healthcare organizations in monitoring supply-demand cycles through its entire lifecycle to show how the transaction is taking place, whether the contract is successful, or if there are any delays.

Interoperability, the very promise of blockchain, can be realized by the use of sophisticated APIs to make EHR interoperability and data storage a reliable process. With blockchain network being shared with authorized providers in a secure and standardized way, that would eliminate the cost and burden associated with data reconciliation.

What are the challenges?

Although blockchain presents enormous opportunities for healthcare providers, it is not without its challenges, including:

Investments in current EHR systems
Healthcare providers have fairly recently made significant investments in EHR platforms. The appetite to make a change to this new technology prior to fully realizing the return on investment of the current systems may keep many cash-strapped entities away initially. Also, blockchain technology would require a complete paradigm shift away from centralized, organizationally controlled systems to distributed and open systems.

Paradigm shifts
While EHR platforms are up and running in the majority of providers, the extent to which they have been implemented is varied. Not all functionalities of the EHRs are being used and there are still many paper processes within the various care delivery processes. Therefore, to ask organizations to completely shift to electronic health records on short notice would be a difficult task. This is not as much a technology challenge as it is an organizational change management and training issue. There is a high chance of resistance from employees. Therefore companies in the healthcare sector need to determine ways to convince their employees of the benefits and provide adequate training to implement new technologies like blockchain.

Questionable willingness to disclose data
In many cases, hospitals might not be willing to share their exact costing data with the insurance companies. The main reason for this is the insurance companies that pay different rates for different patients. In such a scenario where the various stakeholders in the healthcare sector are at profit wars with one another and unwilling to share accurate data, implementing sophisticated technologies such as blockchain would not be an easy task.

Looking to the future

Boards and executive management must keep an eye on this fast-developing technology tsunami. blockchain is said to be every bit as transformative to normal ways of doing business as the Internet was 15 to 20 years ago and continues to be today. Venture capital investments in blockchain technology solutions is exploding. Additionally, once the government realizes the potential for nearly eliminating Medicaid and Medicare fraud, waste, and abuse (estimated at $60 billion in 2016) through blockchain technology, it will only be a matter of time that they begin “strongly suggesting” its use.

If you have questions about blockchain technology and its possible applications to healthcare providers, please contact Blue & Co.’s Cybersecurity and Data Management Practice Leader, Tom Skoog.


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