Healthcare and Blockchain Technology (Part 2)

Healthcare and Blockchain Technology (Part 2)

In Part 2 of our Health and Blockchain series, we will explore more about what makes Distributive Ledger Technology (DLT) so special.  Today, there are two models for blockchains, Public and Private.  The Public blockchains are accessible and readable by the public, making them widely used by cryptocurrencies.  Private blockchains have been proposed for secure business and government use.  Most of the potential healthcare applications are going to be private, as any public use would have to de-identified of personal health information (PHI).

One of the fascinating features of the blockchain is that each block contains a cryptographic hash of the previous block, a timestamp, and transaction data generally represented as a Merkle tree root hash (see link below).

By design, and fundamental to the technology, the blockchain is resistant to modification of the data.  If an open design, the open distributed ledger will record transactions between two parties efficiently and in a verifiable and permanent way.  Efficiency is maybe an exaggeration, as the process of verifying the transaction requires a minimum number of independent third-party confirmations.  In cryptocurrencies, this is how the “miners” provide the “proof of work” they get paid for in newly minted “coins.”

I will elaborate a little on the “distributive part.”  In creating a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for inter-node communication and validation of new blocks.  Once validated and recorded, the data in any given block cannot be altered retroactively without alteration of all subsequent blocks, which requires consensus of the network majority.

As noted above, you can have a public or a private “peer-to-peer network.” Imagine a healthcare community in a city, county or state composing of hospitals, insurance companies and healthcare districts all becoming part of that network.

I believe one of the most fascinating and attractive characteristics of the blockchain records is that they are unalterable.  Blockchains are today considered secure by design and exist only in a distributed computing environment with a high “Byzantine Fault Tolerance.”

Getting back to the main subject, we are exploring the potential uses of Blockchain Technology (BCT) and Distributive Ledger Technology (DLT) in healthcare.

We are not going to discuss much about the common uses of BCT and DLT, and certainly not cryptocurrencies, as that is not our expertise.  We are focused on healthcare and the potential application of this new technology in our industry.

We see various potential uses for DLT in healthcare along with other probable industries.  These industries likely will include supply chain management, inventory management and distribution, along with application in stock and bond ledger maintenance.  The World Bank is already exploring the bond ledger in DLT, today, so that is not theoretical.

Some in healthcare believe that the DLT, in particular a derivative of the blockchain “Smart Contracts” that allows for automatic execution of contractual arrangements, could be used by insurance companies in transactions dealing with insurance coverage and preauthorization for care.  Frankly, although it might be a good idea, it is not practical.  Insurance companies and payors are not going to have anything that moves total control of medical payments to automation.

Our healthcare industry is still in the early stages of digitization and the BCT is definitely a ‘bridge too far’ in the relationship between payors and providers today.  In some cases, BCT can impact healthcare now, however in other cases the change will be coming in the next decade, not in the next few months.

As a recent confirmation to this point, Seema Verma, the Administrator of The Center for Medicare and Medicaid (CMS) on August 6, 2018, delivered a speech that noted, “75% of all medical communications are still done via fax machine.”  The CMS Administrator set a goal of eliminating fax machines in healthcare by 2020.

Other potential uses of DLT in healthcare will likely be provider credentialing and provider directories.  I suspect that these changes will be slow coming, especially in credentialing; however, it will happen eventually.  The reason some of these changes will not be quick is because there are acceptable solutions today and additional regulations at the state and federal levels would have to be implemented.

Some believe that DLT has applications in clinical trials, health information exchanges, and even Electronic Healthcare Records (EHRs).  We will address these potential uses in future blogs.

Other potential uses of Blockchain Technology in healthcare is in the use of the Internet of Things (IoT) and their potential connection to EHRs.  We have considerable passion and patents in that space.  We think that other protocols are likely to have a faster impact, in particular better use of the international Health Level 7 (HL-7) protocols and related Fast Healthcare Interoperability Resource (FHIR) that is the basis of new uses in EHR interoperability.

We are confident that DLT will impact healthcare and will be a huge opportunity in the internationalization of healthcare information of patients.  We also believe that a DLT can shift basic information management to the consumer of care.  In fact, we are certain that a hybrid model of EHR that is both in and out of the blockchain is very likely and warranted.  Some companies have identified that space, and some have even completed Initial Coin Offerings (ICO), a method to raise capital for enterprise, that may or may not use Blockchain Technology, including one developed by a company that has built a U.S. certified EHR platform.