What are the realistic prospects for the adoption of blockchain technologies in U.S. healthcare? The opportunities exist, but so do seemingly countless complexities. On June 28 at the Sheraton Nashville Downtown, experts and innovators around blockchain shared their perspectives on the subject, during the Health IT Summit in Nashville, sponsored by Healthcare Informatics.
Giles Ward, COO of Hashed Health, a Nashville-based “healthcare innovation firm focused on accelerating the meaningful development of blockchain and distributed ledger technologies,” led the panel discussion, entitled “Use Cases for Blockchain in Healthcare.” He was joined by David Murtagh, vice president of operations, provider data management, at MultiPlan, a New York City-based company that “helps healthcare payers manage the cost of care, improve their competitiveness and inspire positive change”; he was also joined by Anthony Begando, CEO of the Nashville-based Professional Credentials Exchange, or ProCredEx, which provides systemic professional credentials verification services; and by Jeanine Martin, nurse advocate and clinical information leader at C3 Global Biosciences, Inc., a Las Vegas-based research firm involved in cannbidiol (CBD; medical marijuana) development and distribution.
Ward began by asking Murtagh about his perspectives on the research and development work done on blockchain in healthcare in the past two years. “Two years is actually a long timeframe to look back on,” Murtagh said. “We’re fortunate enough, because of the relationships we have, most of the partners are relatively small, in the United, United Health Group, Optum, Humana, and Quest Diagnostics collaborative. There’s a relationship factor. United might have a really good relationship with a set of providers, that we don’t have. It’s not like there are certain provider groups out there that say we’re going to shun certain health plans. I believe that the real trigger for this industry to collaborate and use a technology like B that’s relatively unproven, has been driven by regulations. CMS started auditing provider directories of health plans, and for the commercial health plans, CMS has delegated the requirements to the states for audit requirements. And every state has done something different.”
Further, Murtagh added, “If our data is inaccurate, it gets pushed aside. There’s a huge risk to us. If our data is faulty, our network is going to look inadequate. And all of a sudden, we’ll have the state tell us, you’re suspended for a year for participation in programs. So we’ve collectively accepted that it’s going to be imperfect.”
Defining blockchain’s uses cases in healthcare
Meanwhile, Ward asked, “What’s your definition of blockchain? How do you define blockchain, and then let’s go into how you’re applying it.” “Two principles around blockchain are fundamentally important around its use cases,” Begando said. “The two pillars are, on one side of the coin, you need to answer four simple questions with a ‘yes.’ First, is there an existing network of counter-parties that need to share information, are willing to share it, and do not have a simple way of doing it? Is there a centralized control within this network, or are there silos of redundancy? The second question is trust. Do the transactions themselves need to be trusted by counter-parties, and is there a lack of trust?”
Continuing, Begando said, “Third is transparency. Is there a need for parties to understand a specific life cycle? And finally, alignment of incentives—are there incentives among all parties to share incentives, align incentives? If the technology only helps one party, that won’t work. Everyone who participates has to share some value in some way, shape or form. The other side of the pillar is focused on three things. Technical model: does it make sense and is it achievable, can it be scaled to market? Second, the governance model: how will this be governed. In most cases, blockchain systems need to be governed by those who use them. The nature of blockchain is democratization. So you need a governance function that manages the rules and playing field for this environment. The third element is the management model. How will all this be managed? You need a Venn diagram matching all those elements.”
“What’s most important to us is its use case,” Murtagh said. “The decentralized nature of it is critical: you can’t have a central owner that can change the rules or cost structure tomorrow. And having that audit trail. You have that transparency within the system, but you also have the security to enforce rules, define rules, and maintain confidentiality among the parties. So that when I need it and am authorized by the rules governing by the blockchain, I can see the full audit rail, right? But if I just need to for example buy or sell or use one piece of the blockchain, I don’t need for everyone to see the transaction.”
“It’s open, it’s distributed, it’s secure, it’s an immutable ledger, it’s a peer-to-peer network,” Martin said, speaking of the advantages of adopting blockchain. “Cryptography is how you secure the blocks. Then you’ve got Bitcoin and Ethereum, cryptocurrencies built on blockchain.”
“A blockchain is an append-only ledger of time-immutable transactions,” Ward added. “It’s a shared data source, and the true breakthrough is that blockchain or the first time provides digital uniqueness. It provides cryptographic certainty that a data asset, transaction, or unit of value, exists in a singular form and with a singular owner. And that’s a powerful statement that’s grown up around data, and in which so much data can be endlessly copied.”
Meanwhile, Ward conceded, “Blockchain is still very early in its evolution. If this were the Internet, you’d still be getting AOL disks in the mail. We’re trying to bridge from dial-up to something faster. And maybe you’re just starting to get pictures online. We are really early. But blockchain is moving in Internet-equivalent time, in one year every quarter. This is a global community working on something with a platform to communicate about what’s being done. It’s a remarkable space, and will fundamentally change your relationship with data and ownership and privacy, and as we talk about Equifax and data breaches, blockchain is not a solution yet, but it’s a path towards ownership of data and the monetization of data.”
What is the opportunity horizon?
Meanwhile, Ward said, “Blockchain is a technology. It solves problems in a unique way, and allows for solutions you couldn’t achieve in a pre-blockchain world. So why is it a unique solution and what are you hoping to do with it?” he asked his fellow panelists.
“It’s literally a perfect marriage between the burgeoning industry of the global cannabis market, and the emerging technology of blockchain,” Martin said. “Here’s a very simple use case: look at the global cannabis market, seed to sale, and whether it’s producers, retailers or consumers—sales brokers like Amazon, delivery companies like FedEx, and so on. Here’s a use case. I’ve only seen blockchain technology leveraged in the global cannabis industry for payments,” but, she added, the potential for adopting its use across other types of industries is quite significant.”
“Blockchain is the only solution out there today that could allow all the stakeholders to come together around payer and provider data,” Murtagh added. “Look at ourselves, Humana, United, and Quest. We, United, and Humana are a vendor to United. But what don’t we compete on? The quality of our directories. That’s all table stakes, publicly available information. So, we’re comfortable sharing that. And that right there is a mental hurdle to get over, to sit with a competitor and share information. Our goal is to get a clean directory. Quest, their concern is that they know their data is too good. They know when doctor has moved to a new location, but the health plan tells them, our contract doesn’t support the doctor billing from that location. So there are very different use cases from each of us. But as this thing grows, we’ll just continue to grow the use cases beyond a clean directory or improving claims education. You’ll also see more competitors, and more pre-existing business relationships. So the security, the decentralized nature… those are so important for those use cases.”
What about the data?
ProCredEx’s Begando noted that “We’re focused on the area of provider credentials, and those are the data artifacts used by the data architects to confirm the data (validity). So every kind of practitioner goes through some kind of credentialing; and the average physician, nurse or PA, they maintain credentials separately and redundantly with 22-25 different organizations continuously. The process has to be repeated every time you add or change practice venues, such as for the military, etc. And there’s no single type of organization that actively promotes the sharing of this information. And considering that he cost on average is $500-$1,500 just to collect credentials and verify and another $2,000-3,000 just to enroll the payers for each clinician.”
The economics of the complex, cumbersome clinician credentialing process favor the adoption of blockchain, Begando continued. “The average compensation of those clinicians is $7,500 a day… and if you want to spend four months… you’re looking at $600,000 of net revenue deferred… so we’re looking to create a market for different credentials’ verification. So that you can go to an exchange to enroll or credential a clinician. I need Dr. Smith’s verification for staff credentials at St. Mary’s Hospital for 2009-2013. And you’ll see that 85% of the organizations have verified that credential. So our whole use case is around creating that exchange and monetizing it, and moving from dead data to sharable data.”
Seeking clarification, Ward said to Begando, “So then, I can call Vanderbilt and say, Dr. Smith form Vanderbilt, and I can pass that credential down the chain as a primary source and verified asset, because I know Anthony did the original verification, and I can prove cryptographically that nothing has changed that data, correct? Think about ten years from now, when you have a payer and provider looking at the same ledger of a patient encounter. Think about all the processes that fall away and the efficiencies gained, by just moving all the copies of a sat of data into one, with a single source of shared truth.”
Meanwhile, Ward asked his panelists, “Why is now the time, why not wait until it matures and somebody else figures it out?” “Well,” Murtagh said, “somebody’s going to figure it out, and it might as well be us. And with a lot of these uses cases, talking about sharing data and trying to build a network effect, with the four of us, if we can double the amount of data next year, and quadruple it the following year, we want to build that network effect. And if someone else is doing it, maybe there’s a portion of that effort that we don’t necessarily agree with. The worst-case scenario for us is that another alliance of health plans does this, and our [universe of participation] gets cut in half. In terms of these use cases where you want to get a network effect, there’s a significant advantage in being a first adopter.”
Meanwhile, Martin said, “If we look at industry trends and market demands in a competitive landscape, the fact is that investment banks will save $12 billion a year by saving blockchain contracts. By 2022, smart contract usage will occur among 25 percent of contractors. So we need to start moving forward today.”
“I agree,” Begando said. “And the ‘why now?’ is why not? I’m a crazy entrepreneur-type guy, and this is just up my alley. And I have been in this space for so long and just banging my head against a wall about how difficult credentialing is and doesn’t need to be. And blockchain provides a perfect solution.”
“Blockchain allows people to encode their belief system,” Ward said. “If you sit and wait, you’ll inherent someone else’s view of the world. A smart contract allows the network to become the validator of what’s happening below it. Bitcoin is an easy example. In the traditional world, if I write a check to Anthony and he deposits it in his bank, there are one, two, three, four copies of that transaction. If we’re looking at the same ledger, I don’t need third parties to validate a transaction. Do I have the funds to pay Anthony? Does he have a valid account? I can immediately pay Anthony and have that validated. You’ve just cut out three time-consuming steps in a really simple transaction. And you multiply that out times global finance. A well-written contract is a series of if-then statements, and you can encode a contract into a series of transactions that will automate the transaction. That eliminates the need for third-party validation and encodes trust, and allows you to be the architect of the rules that everyone else will be adopting.”
Overcoming the challenges in various industries
What about the challenges involved? Ward asked.
“Today, cannabis is a schedule 1 drug, it’s an illicit drug, and has not been approved by the federal government,” Martin noted. “Today, it’s federal and state regulations, you can’t cross state lines. Also, it’s a cash business today. Implementation costs are massive. Adopting old records, programming smart contracts, storage capabilities, maintaining the program over time, lack of infrastructure,” are among the challenges involved in her industry. What’s more, she said, “There is sensitive stuff, like loss of consumer privacy. We have the Fourth Amendment, per privacy. And government surveillance. But then you include the regulators… those are some of the various challenges I envision if you look at the global cannabis industry, seed to sale, for supply chain. That’s how early this is.”
“The interoperability issues really concern me,” Begando said. “There aren’t a lot of standards. There isn’t as standardized restful integration layer. And we’re living in hyper-speed right now. So much is changing in three-month periods around blockchain. We’ve talked a little bit about the protocols, about Ethereum and so forth. There’s a whole suite of protocols offered by different vendors addressing different markets,” that is emerging, he noted. “And Microsoft is taking the lead in helping with Enterprise 5. Cloud-based platforms are emerging. So in summary, the integration, question mark; interoperability, question mark. We’re trying to get to Mach OS in three months.”
“The key to where we’re trying to get to in blockchain is understanding its fundamental difference,” Ward said. “And there’s the need to evolve it as new technologies and platforms come out. Imagine explaining Uber to someone who’s still getting AOL disks in the mail. One month after the iPhone came out and you explain Uber, and that sounds still pretty weird, but people could have seen the path. So this needs to be made ubiquitous and inevitable.” But as tangible use cases emerge, he said, that development will inevitably encourage further development.
“That’s right,” Murtagh added. “It’s going to take the early use cases to open this up and prove that it’s safe to use.”
Meanwhile, Begando said, “The holy grail for blockchain in healthcare will be EHR [electronic health record] integration. That as a patient, I can have a single integrated EHR held by these different platforms. God bless the day when I don’t have to go to another doctor’s appointment and provide another history. And so EHR integration is the 2025-2030 breakthrough. And drugs and therapies will happen much quicker. And that will create secondary markets for healthcare services.”