Five Blockchain in Healthcare Trends You Should Know

Blockchain technology—sometimes referred to as distributed ledger technology—is a type of middleware technology that allows different entities to come together to securely share a common truth where no single entity controls the entire database or contained data.

Many confuse or conflate the technology with Bitcoin and other crypto-currencies; and while the technology is a derivative of Bitcoin, today, the two have little to do with one another.

While we must acknowledge the technology is not fully baked, the industry has collectively gathered the necessary ingredients from the cabinet, organized them on the counter and preheated the oven. The previous year saw the announcement of multiple alliances including the Health Utility Network, the launch of the U.S. Food and Drug Administration’s (FDA) blockchain pilot for a counterfeit drug prevention, progress of the Synaptic Health Alliance with its pilot for provider data management, and many announcements from startups entering the space. Still, most of the opportunity, hard work and enjoyment lies ahead.

With all this progress, now is a great time to reassess the state of blockchain in healthcare and recalibrate expectations around what healthcare leaders should pay close attention to and why.

Five Trends Healthcare Leaders Should Watch

1. Industry Shift to Quantify Value Proposition

As greater understanding of the technology penetrates the industry, the primary question has shifted from, “What is blockchain technology?” to “How is it useful?” To be sure, for many in healthcare, it’s still a nebulous term; but as little as 18 months ago, finding a passable description proved problematic.

Today, industry trailblazers focus less on understanding the technology or writing white papers and more on assessing the technology’s value for promising use cases. For example, the Synaptic Health Alliance is mid pilot in Texas, assessing its ability to improve accuracy of provider demographics. Synaptic representatives shared that pilot participants are identifying incorrect provider addresses at a rate five-times faster than before.

Public examples of concrete metrics in healthcare have been limited thus far. However, the many recent public announcements about the launch of healthcare-focused projects—not to mention those still in stealth—should move the discussion of project outcomes toward the unique value blockchain in healthcare brings.

2. Expansion of Existing Consortia

If 2019 was about formation of industry alliances and consortia, 2020 will almost certainly include fresh announcements about expansion of those groups in terms of new members.

Expansion will likely occur early in the year, explained by two major drivers.

1. Use cases are characterized by network effects—their value increases as the size of the network grows—creating an incentive to expand membership.
2. A healthy market competitiveness among different consortia projects is forming. Adding new members can extend gravitas, credibility and competitive edge.

Health plans and pharma manufacturers currently dominate public participation among major blockchain in healthcare alliances, while provider entities represent just 10% of the membership of the top seven consortia.

While health plans and pharma manufacturers will likely continue to dominate in the near term, many promising blockchain use cases, such as prior authorization automation, provider credentialing and value-based reimbursement, require the inclusion of providers.

3. Efforts Toward Commercialization

The influences pushing consortia expansion are also propelling the industry toward blockchain commercialization. A wave of announcements about going live should be expected in the near term. Based off the financial services’ experience commercializing the technology, these announcements should be taken with a grain of salt.

But buyer beware: Going live and having meaningful transaction volumes are not synonymous. Nevertheless, the milestone indicates a critical maturation of the technology as a retort to skeptics who believe it is a technology in search of a solution.

Behind the scenes, leaders have been experimenting, learning, building, iterating and progressing. One example is the MediLedger project, an alliance of leading pharmaceutical manufacturers and distributers, which has published two annual progress reports focused on applying blockchain to pharmaceutical supply chain management. It soon plans to release results from its participation in an FDA pilot program on blockchain for pharma supply chain. Initiatives like this not only see blockchain in healthcare as a viable solution to specific problems but also sense the opportunity for commercial viability and market leadership.

4. Emphasis on Operational Use Cases

Despite the industry chatter and conference presentations about the myriad of potential use cases, meaningful progress will likely focus on use cases for data and business processes with a lower risk profile.

This is a reflection on the industry itself—being risk-averse and having a very high degree of data sensitivity. Building applications that touch patient data using such a new technology is unlikely. Provider data management and credentialing, in particular, are two promising ways to gain value from the technology with relatively lower compliance and security risk. These use cases also require a less sophisticated use of the technology, emphasizing data reconciliation and validation as compared to complicated smart contract logic, making them easier to implement.

Multiple startups like the Professional Credentials Exchange, Symblock and HPEC are positioning themselves to be technology leaders for provider data and credentialing use cases. The Synaptic Health Alliance is also currently focused on using blockchain for improving provider demographics. Healthcare leaders should expect these use cases to be the focal point of significant advancement in the near term.

5. Exploring Implications for Interoperability

In early 2019, the Office of the National Coordinator for Health Information Technology and Centers for Medicare and Medicaid Services (CMS) proposed a new rule to advance interoperability across the key segments of the U.S. healthcare system. Known as CMS’s 9115-P Interoperability and Patient Access Proposed Rule as part of the 21st Century Cures Act, it stipulates among other things:

“Every American should be able, without special effort or advanced technical skills, to see, obtain, and use all electronically available information that is relevant to their health, care, and choices—of plans, providers, and specific treatment options.”

Going into effect in 2020, initially for Medicare Advantage, Exchange and Managed Medicare Plans, the rule will catalyze greater liquidity of health data among health plans and patients. Achieving the required elements of interoperability stipulated by the rule requires a broader focus beyond one technology; however, blockchain technology can—and should—play an integral role in meeting the requirements.

Blockchain technology provides a powerful backbone for plans and providers to achieve strict requirements for managing patient consent for health data sharing. By providing an immutable audit trail of information requests, granted consent and request fulfillment, the technology not only helps fulfill the compliance requirement, but also can give greater control and transparency to patients.

Anthem, for example, recently announced an active pilot with 200 employees that allows its patients to control and share healthcare data using the technology. And promising startups like Patientory and HealthVerity are building software to this end.

These early movers, in tandem with CMS’s 9115-P proposed rule, will likely incite others to follow in their footsteps, injecting blockchain technology into the interoperability discussion in a major way.