7 Ways that Blockchain & Cryptocurrencies will disrupt the Dental Industry
Dentistry is prime for disruption
First, what is Blockchain technology?
Blockchain technology is essentially blocks of data put together in an immutable chain of digital decentralized ledgers.
Easy, right?
Not exactly, I know.
You can also think of it this way — Every time someone buys digital coins or tokens on a decentralized exchange, sells coins, transfers coins, or buys a good or service with virtual coins, a ledger records that transaction cryptographically to protect it from cyber criminals or fraud. These transactions are also recorded and processed without a third-party provider or broker (this is an intermediary).
The purpose of this article will not be to explain “what is a blockchain?” but to give some context on how it can affect the dental industry. The easiest way to wrap your head around it is to look at the graphic below — it’s an old school ledger. Imagine this in a digital form. Now imagine, hundreds and thousands of computers containing copies of the same ledger (blocks of data). Imagine now that each addition has to be cryptographically verified in order to be added to the blockchain. Once verified through sufficient level of validation, it cannot be altered in any way (immutability)
The blockchain is basically a cryptographic, mathematical invention. The genie is out of the bottle. Bitcoin is over a decade old and it’s here to stay. It’s spreading globally at an exponential rate.
Disruption by way of Blockchain is inevitable. This applies to our economy and as well as our society. Its impact will be similar to how the internet changed our world. It is predicted that blockchain, along with robotics, quantum computing, nanotechnology, artificial intelligence (AI), and the Internet of things (IoT) -will be the foundation of the fourth industrial age.
The biggest reason that I see blockchain disruption occurring is by a term called disintermediation. What that means essentially is eliminating a lot of the middlemen in multiple industries who provide little value other than “brokering” the sale or authorizing the transaction from one party to next. By eliminating the middlemen or decentralizing the processes using technology like smart contracts or token assetization — things can be cheaper, faster, and better.
We need to touch on smart contract quickly because so much of the disruption in dentistry will be predicated on the smart contract philosophy of IFTTT -“if that, then this”. Here is a video to help explain it further.
So without further ado, let’s get granular and describe how the ways I see it disrupting the dental industry. Drum roll, please.
1.Electronic Dental records– Similar to EHR in medicine, no standard really exists amongst software platforms in dentistry. There are leading proprietary software platforms like Dentrix and Eaglesoft that require “conversions” and bridges to transfer patient data inter-platform. Furthermore, patients are not the custodians of their dental records and have to request for records, which is located typically on one centralized server in the dentist’s office. In a blockchain, the patient will be the custodian of their cryptographic medical / dental records and be accessible, ideally through an app-based interface. So the Medical / Dental records of the future will be blockchain secured, patient controlled.
2. Peer-to-peer Patient Financing & Lending Before the rise of banks, lending took place peer-to-peer based on a system of trust. As that trust eventually broke down, intermediary banks and institutions stepped in to take the risk of lending. In doing so they charged high fees and also add complexity to the deals. In dentistry, the majority of 3rd party dental financing is occurring through companies like Care Credit or Lending club. Again, as the intermediary taking the risk, they charge up to 15% service charge on the capital and or high-interest rates. With insurance adjustments & write-offs, many times this is the entire profitability of that case for the dentist office. Ironically, the “high tech” blockchain aspect almost reverts back to the era of peer-to-peer lending likely utilizing smart contracts. Essentially removing the banks and institutions as the middlemen and connecting borrowers and lenders directly in a worldwide marketplace. Additionally, help to ensure trustless transactions. Everyone will win — the patient will be able to access unlimited, worldwide capital. Dentists will be able to remove themselves as the “facilitator” of getting the traditional lending so that they can do the dental work and not get charged egregious ‘administration’ fees to help patients originate a patient/consumer loan.
3. Dental insurance — Dental insurance is a frustration for the dental industry. Specifically, patients and dentists seem to have endless mutual frustration. Dental insurance involves multiple intermediaries (agents, brokers, underwriters, etc). At each intermediation point, there are inefficiencies and costs/fees associated. The frustration game continues as dentist are forced to jump through more and more hoops and an increasing amount of denials. The entire cycle seems to be a “Game of Persistence” -who can be more persistent with the claim — the dentist office submitting appeal after appeal or the insurance company looking for loopholes to not reimburse. Essentially, their entire business model is predicated on keeping as much as premiums they collect as possible within the confines of compliance and regulation, essentially defining their profitability. Blockchain insurance will allow for removal of multiple intermediaries between patient and dentist, as well as simplifying the process of how it should be — “if this, then this”, which is essentially the premise of smart contracts. Essentially if the work can be validated as “complete” on the blockchain, the dentist will be paid through automated smart contracts, and likely other dentists will act as oracles to ensure abuse is not tolerated.
4. Private Equity DSO –Wallstreet found out years ago that dentistry could be a very stable and lucrative industry. For years in most states across the United States, outside investment in dentistry was staved off by requiring one to hold a dental license to own a dental practice — the cottage industry, if you will. With the rise of Dental Service Organizations (DSO) acting only a management company, this has allowed institutional and private investment to partake in ownership even if they don’t “own” practice because all profits flow up to the management company. Private equity groups have had a large run on dentistry for a number of reasons, mainly the advantage of large capital reserves and purchasing power. Enter the security token market — yes, is in its infancy with projects like Polymath, Ravencoin, and Own (chainium). But make no mistake about it, the tokenized asset movement will make it’s way to group practices or DSO’s (and small businesses, overall) and the cryptocurrency market as a whole. Wallstreet is bound for disruption, not just dentistry. Imagine being able to tokenize almost any asset on the blockchain and having unlimited fractional shares — open to a worldwide market of investment. Cryptocurrency / Blockchain investment will allow this! Also, dentists only used to be able to sell to other dentists. DSO’s allowed for another sale option for the dentist- which is good because it provides another avenue for liquidity for the dentist. In the blockchain arena now the marketplace becomes the WORLD — with almost unlimited fractional investment. Cryptocurrency investment and securitized token assetization of one’s practice will add another option for the dentist for a liquidity event if they so desire and not have to surrender to “corporate takeover” that is so pervasive in our dental discussions currently.
5. Advertising & content –Digital advertising is overrun by middlemen, trackers, and fraud. This area of disruption is not so much dental specific but I do see it largely impacting the way we create and deploy content. We currently have large digital intermediaries who get compensate for consumer attention. Google and Facebook control the landscape of digital marketing and profit on the “attention” of their user. Brave Browser and Basic Attention Token are going to change that and are actually credited with having one of the “first use” working applications of the Blockchain.
Brave and Basic Attention Token disruption
Source: Basic Attention Token https://vimeo.com/209336437
6. Professional Dental lending — Capital funding for buildings, practice acquisition or equipment — one of the struggles for a dentist is finding capital for expansion. Opening up worldwide access to capital by directly connecting lender and borrower. I envision a marketplace where student loans might be able to be originated or re-financed even. Again, with a competive worldwide marketplace and potentially lower interest, costs, etc ……
7. Supply chain tracking of authentic products — Gray-market products are those products that are sold outside of the established distribution chain. It is generally agreed that gray-market products are sold through channels that are legal, but the channels are unauthorized and unofficial-meaning they are not approved. Up to 10% of dental supplies and products are either counterfeit or gray market products and can be potentially dangerous to patients . Supply side logistics will be another immediate use case of the blockchain. Whether for dentists, doctors or auto manufacturers, this technology will allow purchasers and consumers complete logistic transparency, from end to end.
Originally published at drboulden.com.