Blockchain is a rapidly growing industry buzzword, with applications from financial services to supply chain management. The technology’s inherent transparency, security, and reliability can solve several problems in the healthcare industry and can play a critical role in the digital transformation of healthcare in the United States. But before we go into some of the use cases, let’s first get acquainted with the underpinnings of this technology.
What is Blockchain?
Blockchain technology, best known as the technology that powers the digital cryptocurrency Bitcoin, bases itself on a distributed ledger system that assigns a block to each digital transaction. A ledger is formed by chaining each block to the transaction occurring immediately before and immediately after it. The shared records then form the chain amongst a network of computers, hence the term “distributed ledger”.
All encrypted transactions in the blockchain have a cryptographic hash which locks that event in place, creating an unchangeable or immutable record of transactions. A very important characteristic of this distributed ledger is that all transactions must be verified and recorded through the consensus of all parties belonging to the network. New transactions cannot be approved unless a majority of the members in a blockchain network agree that a requested action is accurate and valid.
Now that we are familiar with this new technology, let’s explore some of its potential use cases in the healthcare industry.
Secure and timely data exchange - On its surface, blockchain has many characteristics to address core challenges in healthcare such as data security, privacy, and interoperability. A trusted and shared database of healthcare transactions would significantly reduce the risk of fraud. The immutable nature of the records in a distributed ledger would ensure that all stakeholders in the healthcare vertical can easily share data with anyone without the fear of data corruption or tampering. Patients will be able to fully manage their data and control access to it. With the right group of partners there will be a shared sense of value where everyone involved would be accountable and gainfully committed to data sharing.
Payment Innovation – As bundled payments and other value-based contracting take over for the traditional fee-for-service arrangements, timely and up-to-date information will play a key role in determining the potential savings or incentives earned by providers. For example, instead of waiting weeks for claims data to calculate and determine if the total cost of care for an acute care episode such as knee replacement is under target, providers can use a blockchain network to keep an up-to-date ledger of patient activities. This gives them an opportunity to course correct with a higher probability of gaining share savings or incentives. Similarly, ACOs can setup blockchain networks within the group of care providers that are responsible for a patient population. By sharing information via a secured network and without the administrative burden of keeping systems in sync, the ACO can coordinate care, and meet the target quality and cost goals for financial rewards.
Drug Supply Chain - Counterfeit medicines that may not have the correct active pharmaceutical ingredients or dosage levels are becoming a huge risk to human life. When drugs transfer ownership on their way to the retail market, vulnerabilities arise from a lack of visibility. Companies can now embed blockchain into the transaction processing by scanning barcode-tagged drugs into secure digital blocks whenever they change hands. Then authorized parties and even patients at the far end of the supply chain can view this ongoing real-time record anytime.
Clinical Trials - In a modern clinical trial setting, a lot of success depends upon having a secured, fast and transparent way to share large quantities of data with individuals in different countries across the globe. In such cases, anonymity and traceability of data are two key challenges that blockchain can quickly and easily address. The blockchain technology can provide a cost-effective way to speed up processing while lowering the transaction cost. In cases of global studies, it can create a network to collect and authenticate data from several labs across multiple countries. It can incentivize people to participate in medical research by contributing their anonymized data to clinical trials and receive tokens (cryptocurrency payments) in exchange for use of their data in those trials.
Despite the promises, industry leaders and professionals are cautious because the technology is in its nascent stages and is untested. Blockchain is not meant for storage of large data sets, is not an analytics platform and has very slow transactional performance. It will be interesting to see how industry innovators balance the merits of decentralization with slower transaction speeds and lower efficiency. The recent announcement of Aetna, Anthem, and Health Care Service Corporation partnering with IBM and PNC Bank to create an inclusive blockchain network is a step in that direction. The expectation is that such a network would enable companies to build, share and deploy solutions with the common goal of bringing digital transformation in delivery of healthcare services with a patient-centric and value-based focus.
To find out more about blockchain and blockchain applications, attend our free webinar “Maximum Blockchain Impact with Minimal Risk” on February 28th at 9:00 AM EST.