Still Bullish on Blockchain: Experts Give a Lay of the Land | Rajiv Leventhal, Managing Editor | Healthcare Blogs Skip to content Skip to navigation

Still Bullish on Blockchain: Experts Give a Lay of the Land

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At a healthcare modernization event this week, health IT thought leaders weighed in on where things stand regarding blockchain’s push into healthcare

Although there are still more questions than answers regarding the impact that blockchain technology will have on healthcare, many health IT experts remain convinced of its promise.

One of these “bullish on blockchain” folks is John Halamka, M.D., CIO of Boston-based Beth Israel Deaconess System. Halamka, who is the editor of the Blockchain in Healthcare Today journal, launched earlier this year, frequently mentions the Gartner Hype Cycle—known for representing the maturity, adoption and social application of specific technologies—when discussing the latest and greatest health IT applications. Just where exactly blockchain— a distributed ledger that it is durable, time-stamped, transparent and decentralized—sits on the hype cycle can be debated, but Halamka, for one, certainly is optimistic on its potential.

Speaking at the Convege2Xcelerate healthcare modernization conference, held October 24 at Columbia University, Halamka stated how blockchain could speed up the progress of health data exchange. “The reluctance to exchange data has nothing to do with technology. It’s about psychiatry. Having a trust layer that is immutable will help with those issues,” he said. Looking at the challenges with clinical informatics, especially with issues around the exchange of health information, while the technology frameworks “have mostly been good enough, and standards have emerged, the policy and governance side of things needs to be [figured out],” Halamka said at the event yesterday.

Halamka, who noted that he led approximately 200 health IT meetings for the Obama administration, as he was co-chair of the national HIT Standards Committee, said that whether it’s accomplished through the government or the private sector, “the real [health data exchange] challenge is the capacity to track where your information has begun and where it has been distributed to. Society, at this moment in history, is beginning to think that there is something to blockchain,” he said. “And if they end up believing in it, and it’s publicly available with openness and transparency, it has an opportunity to change our reluctance to share our information with these various stakeholders.  Without this, it will be hard to move forward with interoperability [efforts],” he added.

The innovation event, which focused primarily on blockchain and telehealth, also had a number of other health IT leaders give their thoughts on the promise of blockchain in healthcare. Brian Behlendorf, executive director of Hyperledger, an open source collaborative effort created to advance blockchain, noted that some of healthcare stakeholders’ consensus goals include: wanting to see patient-centric health information sharing; data-driven clinical decision making with informed patient consent; insurance determination; and the reduction in drug costs.

“In order to achieve these, and make a dent, we need blockchain technology. You have two components—distributed ledgers and smart contracts—and you can build on top of those,” Behlendorf said, adding that blockchain technology will facilitate a network of ledgers, meaning that patient data would not be put directly on blockchains. “We can use ledgers to verify the integrity of this data.”

Indeed, this is how some experts clarify the difference between blockchain technology and heath information exchanges (HIEs). While HIEs hold the electronic patient data all in place, with blockchain, separate entities each hold a “token” on the chain. Put in other words, if you as a patient go to four different hospitals, that data is being held separately; no single place is containing all of your information. And, no single entity has a complete view of your information unless you initiate a request and all parties agree to it. On the other hand, with an HIE, various different agencies are submitting data to that centralized exchange, meaning a hack of that information could have disastrous impacts.

Behlendorf also cautioned that use cases that show the effectiveness of blockchain are still in the very early stages in healthcare. “Blockchain is essential, but it will not solve everything,” was the consensus take from the health technology leaders yesterday.

Being at the event yesterday made me think of when Healthcare Informatics first included blockchain as one of our Top Ten Tech Trends last year. I’ll specifically point out this explanation from Chris Kay, chief innovation officer at the Louisville, Ky.-based Humana, who offered a specific example of blockchain’s prospective use in healthcare: “Imagine that you go to the doctor today and get a blood test, but you need to see a specialist, so a referral is made. But your health records don’t come with you; you show up to the specialist as a new patient. Here, you get a poor customer experience with a lot of friction in that system. But what will it look like in a distributed ledger world where there is cryptography and trust built in such that you as a consumer has a note on the blockchain that contains your health records? The provider who was contracted with an insurance company has the payments and scheduling on separate notes. As that provider makes a note, or does a procedure or a surgery, that becomes an indelible block on the ledger. You are building your health history over time.”

Offering another example of its potential impact, Wired  ran a terrific piece last year in which the author primarily spoke with Halamka, who gave a specific example of how blockchain would work with prescriptions. “Say that one medical record shows a patient takes aspirin. In another it says they’re taking Tylenol. Maybe another says they’re on Motrin and Lipitor. The problem today is that each EHR [electronic health record] is only a snapshot; it doesn’t necessarily tell the doctor what the patient is taking right now. But with blockchain, each prescription is like a deposit, and when the doctor discontinues a medication, they take a withdrawal. Looking at a blockchain, a doctor wouldn’t have to comb through all the deposits and withdrawals—they would just see the balance,” Halamka said.

Of course, it’s important to keep in mind how early healthcare is on its blockchain journey. Most people in the know, with eyes and ears on the ground—and I think Halamka himself would be included in this sentiment—believe that there simply aren’t many provider-focused blockchain pilot projects in production at this time.

To this point, in a recent interview with Healthcare Informatics, health policy researcher Tim Ken Mackey, an associate professor of anesthesiology and global public health at UC San Diego School of Medicine, and who was also at the healthcare event yesterday, noted that blockchain “is really primed for proof of concept development, but often the hard part is translating a proof of concept into something that can go into production and can be used by multiple parties, and that’s where the most benefit comes from blockchain; if you are allowed to share data, but keep ownership of it and have provenance of the data and trust in that data. Getting to that phase is going to be harder,” he said.

But still, things are moving forward. Earlier this year, five prominent healthcare organizations—Humana, MultiPlan, Quest Diagnostics, and UnitedHealth Group’s Optum and UnitedHealthcare—announced they would be launching a blockchain-based pilot program with the aim to improve healthcare data quality and reduce administrative costs. The organizations said they would be specifically examining how the technology could help ensure that the most current healthcare provider information is available in health plan provider directories.

So, while full-stage deployments of blockchain technology in patient care organizations might still be a year or two away, if not more, it’s exciting to see some of the industry’s brightest minds continue to tout its promise.


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Take the Lead to Deploy Emerging Technologies for Improved Outcomes

December 14, 2018
by Brad Wilson, Industry Voice, former CEO of Blue Cross and Blue Shield of North Carolina
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It is a thrilling time to work in healthcare. As the former CEO of Blue Cross and Blue Shield of North Carolina (Blue Cross N.C.), I have had the opportunity to be at the forefront of using new technologies to improve outcomes for our members. Now as a member of the CitiusTech advisory board, I continue that focus on emerging technologies, such as artificial intelligence (AI), and the potential to accelerate the shift to value-based care and improve the healthcare system in material ways.

AI is starting to make a distinct impact in helping providers deliver more effective care, lower costs and create a more consumer-friendly healthcare system. Blue Cross NC recently piloted the use machine learning, a type of AI, to identify spikes in prescriptions for a costly medication. The company reached out to doctors who had been prescribing the medicine in significant numbers. Alerting just one particular physician practice to a generic equivalent brought estimated annual savings of $750,000 for Blue Cross NC customers. The potential of AI is not measured only in dollars, but cost savings are an important consideration.

Machine learning works by applying sophisticated algorithms to rich datasets from electronic medical records (EMRs), patient-reported data, claims and a host of other sources. To be successful, this requires both access to data and significant investment to support the depth and breadth of data analytics capacity and capability.

Yet, historically, one of the biggest barriers to value-based models has been providers’ and payers’ possessiveness of their own data. There is a good business reason for that possessiveness: competitive advantage. The different parts of the healthcare system do not want competitors to use shared data to steal business. But the guarding of data drives healthcare costs higher and, more importantly, makes delivering better, more personalized healthcare more difficult. In the past, power came from hoarding information; today, there is power in serving as an information hub.  Healthcare providers and payers are starting to understand this and there is more willingness to work together in sharing what has traditionally been closely held information.

As consumers’ voices gain in numbers and decibels, it’s clear that analytics technologies that can lead to better care at lower cost are desperately needed, particularly for payers. But the entire healthcare industry needs to move more rapidly. Health plans need to enrich, deepen and widen their analytics capabilities as quickly as possible. If they don’t, we will continue to see disruptors like Google, Apple, and Amazon enter the healthcare market—companies that have a demonstrated ability to be nimble and maximize the impact of their data.

For both providers and payers, forward-thinking organizations recognize that building their own data analytics solutions is not always the answer. Often there is not enough time, resources or enough of the right talent to deliver the capacity and capability required. Fortunately, robust turnkey solutions coupled with deployment expertise are available to efficiently and cost-effectively integrate data and analytics within an organization’s clinical, financial and administrative processes.

As health plan executives map out their strategic plans, look to these emerging technologies as accelerators for leveraging data to manage risk, optimize performance, engage consumers, enhance population care, and improve clinical outcomes to reduce readmissions and further drive evidence-based medicine. The opportunity is here to transform healthcare delivery in significant ways. Success will go to those organizations that understand the potential of these new technologies and take the lead to deploy them effectively—today. 

Brad Wilson is former CEO at Blue Cross and Blue Shield of North Carolina and is a member of the new CitiusTech Advisory Board. Mr. Wilson joined Blue Cross NC in 1995 as General Counsel and held a variety of senior-level positions before being named CEO in 2010. Under his leadership, Blue Cross NC grew to a $9 billion company serving over 3.8 million customers. Mr. Wilson has also served as Director of the BCBS Association, AHIP and numerous other national and state healthcare organizations.


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Investors Have Strong Interest in HIT Sector, Despite Valuation Concerns

December 13, 2018
by Heather Landi, Associate Editor
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Healthcare IT remains a hot investment sector despite concerns about these companies being overvalued, according to KPMG-Leavitt Partners 2019 Investment Outlook, a survey of health care investment professionals.

Looking ahead to 2019, more than a third of respondents (34 percent) said they were most interested in investing in health care IT, followed by care management (31 percent), home health (23 percent), retail-centric medical groups (22 percent) and primary care practices (21 percent).

New York City-based KPMG and Leavitt Partners, based in Salt Lake City, surveyed 175 respondents online from corporations, health systems, investment banks, venture capital and private equity firms between September 17, 2018 and October 21, 2018. Of those surveyed 32 percent were C-suite executives; 29 percent were principal, partner or managing director; 32 percent were vice president or director; 6 percent were analysts/associates and 2 percent held other titles.

“We are not surprised by the great deal of interest in health care IT and care delivery outside the hospital,” Governor Mike Leavitt, founder of Salt Lake City-based Leavitt Partners and former Utah Governor and U.S. Health & Human Services Secretary said in a statement. “As health care continues to march toward value, the emphasis on moving care to lower cost sites and enhanced coordination will continue, and those who can increase quality and lower cost will win.”

According to an October report from Rock Health, 2018 is already the most-funded year ever for digital health startups. Digital health funding in this past third quarter soared to $3.3 billion across 93 deals, pushing 2018 funding to $6.8 billion, already exceeding last year’s annual funding total, which was $5.7 billion, by more than a billion dollars.

Drilling down into respondents’ predictions for investment activity in 2019, in the health care and life sciences market, 96 percent of respondents see either a lot or a moderate amount of investment in health IT and data next year, while a similar percentage (90 percent) see significant or moderate investment in outpatient services. Forty-four percent forecast a lot of investment in post-acute care services, 39 percent predict significant investment in provider services and about a quarter of respondents believe there will be a lot of investment in managed public programs, payer service providers and pharmaceutical and biotech manufacturers. Eighteen percent believe there will be significant investment in medical device and diagnostics and medical equipment.

The survey results indicate there is concern that health IT is overvalued, yet investors believe there is some room to climb.

The majority of investment professionals see health care IT investments as an overvalued sector (64 percent), yet 40 percent expect the valuations to increase in 2019 while 51 percent see them staying the same. About two-thirds of respondents (62 percent) think the health IT sector will grow faster than the market in 2019, and three quarters of investment professionals see increasing competition in the health IT market. Investors also estimate that the average purchase price multiple, in terms of EBITDA, will be 12.5 for the health IT sector in 2019. Survey respondents expect ongoing demand for tools to help with consumerism will impact investment and deal making in the sector, according to the survey.

About four in ten respondents believe the healthcare market is experiencing a “moderate bubble,” while 9 percent believe the bubble will likely burst.

Care management solutions for risk-bearing providers, a highly competitive sector which helps coordinate care of the chronically ill or seriously injured, are expected to be the second highest sector for investment behind health care IT, similarly driven by trends of consumerism and increased focus on early care interventions.

Looking at potential drivers of M&A activity in the health care and life sciences sector in the coming year, 64 percent of respondents cited cost consolidation and economies of scale, while 45 percent cited accretive acquisition strategies. Forty percent of respondents see changing payment models as a driver of M&A activity, and 38 percent cited pressure from competition. Other drivers cited by respondents include expansion/divestiture of service areas (25 percent), geographic expansion/contraction (24 percent), revenue synergies (22 percent), need to deploy cash on balance sheet (17 percent), and regulations and legislation (13 percent).

“Deals are largely being driven by the need for savings, economies of scale, and improving cash flow or accretive earnings per share,” Carole Streicher, Deal Advisory leader for healthcare & life sciences at New York City-based KPMG, said in a statement. “Secondarily, there is a bit of a defensive posture motivating investments as health care organizations contend with competition and reimbursement models connected to quality and efficiency, as well as the entrance of tech firms investing in the sector.”


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Report: Massachusetts General Hospital Targeting Various Blockchain Use Cases

December 7, 2018
by Rajiv Leventhal, Managing Editor
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Massachusetts General Hospital (MGH) researchers are partnering with MediBloc, a Korean healthcare blockchain company, with the aim to improve patient data sharing and storing, according to an article in CoinDesk.

Per the article, the Laboratory of Medical Imaging and Computation by MGH and Harvard Medical School will be escalating research in a variety of broad areas “from medical image analysis to health information exchange by leveraging our cutting-edge technologies such as blockchain, artificial intelligence and machine learning,” according to Synho Do who is the laboratory’s director.

Do specifically told CoinDesk, “In collaboration with MediBloc, we aim to explore potentials of blockchain technology to provide secure solutions for health information exchange, integrate healthcare AI applications into the day-to-day clinical workflow, and support [a] data sharing and labeling platform for machine learning model development.”

Interestingly, MGH won’t be using any real patient data for its research, but rather simulated data, according to officials, since the various institutions that have the real patient data keep it in a way “that can’t be shared securely and often is in various incompatible formats.”

MediBloc’s CEO noted that the company is not only developing a distributed ledger for storing and sharing medical data, but also working on a tool that would convert data now held by hospitals from existing formats to a universal one, per the article.

For this initiative, MediBloc has already gotten partners across Asia, including eight healthcare organizations and 14 technology companies, officials said.

Earlier this year, a testing environment version of the blockchain was launched, and the network is expected to go live before the end of the year before becoming fully functional in the second quarter of 2019. Furthermore, there are also apps in the works that are planning to go live next year, with one of them, currently in a beta testing phase, “designed for patients to sell the information about their symptoms and the prescriptions they get to MediBloc. After that MediBloc will analyze that data and sell the analysis to pharmaceutical and insurance companies,” according to the story.

In the end, the main goal of the blockchain project will be to let patients independently decide what to do with their information.

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