For years, healthcare stakeholders have been grappling with a variety of financial, compliance, and operational challenges, ranging from maintaining patient data integrity and streamlining complex multiparty engagements to auditing the prescription drug supply chain.
However, private practices, hospitals, and even pharma suppliers are increasingly turning to blockchain to fix administrative inefficiencies, reduce the cost of care, and drive profits. Little wonder 25% of these businesses worldwide plan to have adopted blockchain for commercial purposes by 2020, according to a Statista survey. By 2025, the projected distribution of this revolutionary technology across healthcare functions globally will have reached 55%.
But what blockchain applications should you consider applying to your healthcare business workflows or operations to boost competitiveness and profitability? Let’s first define the transformational technology before delving into some of its noteworthy applications for 2019 and beyond.
What is it, and how does it work?
A blockchain comprises cryptographically connected blocks over a peer-to-peer digital network or distributed ledger system. Each block captures and permanently preserves a hash value that represents information pertinent to a transaction, such as timestamps, unique identification, as well as the sender’s and recipient’s details. The technology offers several characteristics and capabilities critical to healthcare operations and management, namely:
Transparency: Each member of a blockchain network has an up-to-date copy of all transactional data, making it possible for providers and their partners to monitor the drug supply chain, transactions, or contracts in real time.
Data security and integrity: Each block passes its hash value to the next, so it’s virtually impractical for any single party to manipulate transactional data without the consent of fellow blockchain members.
Decentralization: With distributed ledger platforms, there are neither intermediaries nor centralized databases. A single source of truth is available to all blockchain members, helping to bring real-time transdisciplinary collaborations and structural interoperability several steps closer to reality in health care.
Here are four promising blockchain applications in health care to follow closely in 2019:
1. Blockchain consortia for enhanced interoperability and collaboration
Sharing and collaborating on payer, patient, and provider data remains mutually beneficial to healthcare stakeholders even when they’re competitors. But the fragmented nature of many existing health management information systems continues to hamper such interprofessional interactions. Blockchain consortia are changing that, enabling competitors to cooperate and improve service and care delivery.
For example, Humana and four other healthcare organizations are together testing a blockchain system that lets them share patient and provider data quickly and more cost-effectively. Such a solution has specific use cases, such as enabling an insurer to tell if a physician has moved to a new location.
The pilot program will examine how sharing data across healthcare organizations on blockchain technology can improve data accuracy, improve access to care, and streamline administrative costs associated with changes to provider demographic data.
By facilitating Electronic Health Record (EHR) integration, a blockchain consortium will enable patients to see multiple specialists and receive high-quality care quicker than otherwise possible. That’s because the different physicians or private practices available to them can access a shared, decentralized EHR system, which provides a patient’s diagnostic information and medical history in real time.
2. Decentralized credentials exchanges
Professional credentialing in healthcare is usually a protracted and costly process, with each caregiver maintaining credentials separately with dozens of organizations. Also, it is complicated and cumbersome to do it all over again each time a practitioner moves to a new location. Several decentralized credentials exchanges have sprung up to address the challenge.
Nashville-based Hashed Health, for example, has created a blockchain exchange for speeding up professional credentialing. Rather than maintain multiple redundant systems, providers can tap into the single shared source of truth, which provides the most recent and verified credential information for each exchange member. Hospitals and private practices can leverage the system to quickly verify practitioners’ information based on preset, universally accepted rules and data artifacts.
This credentialing model helps to accelerate the onboarding process for physicians, nurses, doctors, and other types of caregivers. Healthcare organizations can implement it to optimize revenue collection while streamlining repetitive, mundane workflows, such as credential gathering and validation.
3. Smart contracts in healthcare
Blockchain-powered smart contracts take transparency to the next level in a typical healthcare ecosystem. The solutions help to build trust between industry stakeholders, from hospitals, doctors, and specialty pharmacies to health plan providers and pharmacy benefit managers. With these computer programs, multiple parties can encrypt a belief system on a blockchain to help enforce and streamline the performance of a contract.
For instance, drug makers and health payers can write and encode smart contracts to enforce negotiated pricing for covered prescription medicines. The system autonomously triggers a payment to the manufacturer when a patient orders any drug in the supported formulary. A complex block of “if-then-else” codes in the program helps to validate all transactions.
Health care providers can also set up these types of blockchain-based contracts with payers to expedite compensation every time they treat a patient. In that case, a digital ledger records each instance a doctor, nurse, or surgeon attends to a patient. Next, the smart contract sends payment from the payer to the hospital or doctor’s office. The provider also receives a predetermined amount of co-pay from the patient.
4. Tracking prescription drugs
Pharmaceutical companies might soon turn to immutable distributed ledgers to track prescription drugs. That’s because blockchain technology offers the tools required to detect and get counterfeit medicines out of circulation. The U.S. healthcare industry loses up to $200 billion annually to the sale of fake drugs.
Blockchain lends itself to numerous pharma operations because of its potential for interoperability, which, for example, can enable stakeholders and regulators to monitor prescription medicines as they change hands from one party to another down the supply chain. The technology helps to build a permanent, time-stamped audit trail, ensuring that each party accounts for all drugs supplied to them.
Chronicled Inc. has already raised $16 million for use in building a blockchain-based supply chain ecosystem for the pharmaceutical industry. The software company hopes that the solution will be available to pharma businesses within a year or so.
Blockchain is currently transforming the healthcare space in different ways. Industry stakeholders, such as doctors, hospitals, payers, and drug manufacturers are increasingly exploring ways to leverage the technology to improve multiparty-interactions, reduce administrative costs, enhance access to quality care, and boost profits. In a nutshell, critical blockchain trends to watch in 2019 include:
- Smart contracts
- Distributed ledger supply chain
- Decentralized credentials exchanges