By this point, the term “blockchain technology,”has captured the attention of the world’s largest industry leaders. News headlines have already espoused that blockchains will solve all of enterprise’s most pressing problems. Whether it’s seamless financial exchange or cheaper compliance costs, it seems that blockchain technology is a forgone conclusion for the world’s most valuable companies.
One industry in particular that has seen a large uptick in interest for the emerging technology is healthcare. Executives have heard promises saying that blockchain technology has the power to solve all issues related with data interoperability and security, while at the same time reducing costs. While these claims are not entirely inaccurate, their validity has been difficult to evaluate given the technology’s nascent stage. While excitement for blockchains as a disruptive force is justified, many healthcare executives still find themselves asking the same question, ‘What is a blockchain?’
A blockchain is an immutable ledger that records transactions within a given network. In most blockchain networks, this ledger is equally shared with every participant, making the network ‘distributed.’ Providing every actor with a copy of the ledger makes it easier for the entire network to reach consensus on its accuracy. The big breakthrough here is that these networks can agree on the order of transactions without a centralized party verifying each change made to the ledger.
Distributed ledgers are designed to be immutable and tamper-evident, meaning that once something is confirmed onto the blockchain, it can’t be removed, and any error is easily spotted by the network. Immutability is achieved by cryptographically linking blocks of transactions together, hence the name blockchain. This makes blockchain technology a great fit for use cases that require censorship resistance and transparency.
Blockchain technology was first created by Satoshi Nakamoto, the anonymous cryptographer behind Bitcoin. When creating the cryptocurrency, Satoshi searched for a solution to the “byzantine generals” problem, a computer science problem that dealt with achieving network consensus in a decentralized manner. Using an incentive mechanism called Proof of Work, Satoshi was able to craft a system in which participants who knew nothing about each other could transact in full faith. Grouping Bitcoin transactions into cryptographically linked blocks was the centerpiece innovation of the system.
We understand that many of these terms might seem intimidating at first glance, especially for those that don’t come from a software background. We’ve put together easy to digest explanations for the most important concepts in blockchain technology.
Blockchain: An immutable ledger of transactions distributed amongst every network participant
Block: the data structure in which network transactions are grouped
Smart Contract: computer code that self-executes when certain conditions are met
Consensus: An agreement between network participants on the accuracy of the blockchain
Key Healthcare Use Cases
Now that we’ve established what a blockchain is and why it’s important, we can begin to explore the future of blockchains in the Healthcare industry.
Every time a patient visits a healthcare provider, data specific to the instance is recorded. Gathering and organizing this data allows healthcare providers to properly treat patients during future visits because they can better assess the patient’s health given their full medical history. The problem with the industry’s current infrastructure is that healthcare providers all use their own unique software systems to record this data. Electronic health records today live in centralized silos and are difficult to quickly transfer given their sensitive nature. This becomes especially problematic when patients switch providers. Each system can also have multiple ways to input the same data points so providers often have to expend resources on data reconciliation within their own systems.
Blockchain technology promises a new paradigm for recording, accessing, and transferring electronic health records. Using a shared ledger to store this data ensures that it’s interoperable across systems. Anyone with access to the ledger can be sure that they’re looking at the same content. Blockchain technology also ensures the integrity of the records because it employs cryptographic hashes.The hash of a certain piece of data is unique to it so any errors are easily spotted. This allows a lot of data reconciliation to be automated. Blockchains are also really good at enforcing access controls. Only parties with stipulated permissions can access or edit sensitive medical information.
What this system would create is a longitudinal health record, one patient, one story, one timeline.
Medical Claims Adjudication and Billing Management
The process of adjudicating medical claims is far past broken. It can take up to 90 days for a claim to be processed as it moves from intermediary to intermediary. Since most medical data isn’t interoperable, information requests are sent back and forth between middlemen who manually evaluate each claim. This chain of custody can expose sensitive medical information to more than 300 different sets of eyes. Patient privacy and efficiency are completely lost in today’s pen and paper infrastructure. And the costs are so exorbitant that the numbers are laughable at this point. According to the Institute of Medicine, data inefficiencies within the healthcare industry will cost about $315 billion by 2018.
Blockchains offer a much more streamlined, secure, and cost-efficient way of handling medical claims. By allowing every party to interact within the same system, information requests can be handled quickly and unilaterally. Fewer intermediaries are required to log information which means fewer eyes on your personal information. Similarly, strict access permissions protect your medical privacy from unauthorized viewers. Blockchain technology also makes this process more transparent as patients, providers, and payers can see the history of each claim as it moves between parties. Lastly, payments can be authorized on the blockchain and distributed automatically.
Given those benefits, it would seem as if revenue cycle management on the blockchain is a no-brainer. However, the challenge here is not technological but political. Bringing multiple parties with vested interests to the table to devise a shared technological and financial incentive is no easy task and takes leadership from the top down and from the bottom up and all the way in between.
Max Bronstein is a Contributing Writer at Gem.