The Top 8 Reasons Healthcare Needs Blockchain, Crypto
By: Preston Bates
(And the reasoning may surprise you)
With all the blockchain innovation in finance, many have overlooked blockchain’s potential to disrupt other multi-trillion dollar markets.
Markets like healthcare.
Global healthcare spend is expected to reach $8.7 trillion USD by 2020, according to Deloitte. How and where is that going to happen?
Read on to find out…
Why you should even care about this topic?
We, humans, are tribal by nature. We don’t like to get “left out” of conversations, events, or anything status-raising. And, we crave recognition (from others).
These are no longer anecdotal truisms from anthropology. Epidemiologist and public health officials are now looking into what’s called “Social Determinants of Health.”
An emerging body of research shows that social isolation is highly correlated with chronic degenerative conditions and disease.
Tl;dr?
Ignoring this new field of crypto health means you will be socially isolated from your peers, your friends, your colleagues — maybe even your boss. Don’t let that happen.
Luckily for you, we’ve got your back over here at The Crypto Health. So, keep an open mind. And, keep reading.
“Ignoring this new field of crypto health means you will be socially isolated from your peers, your friends, your colleagues — maybe even your boss. Don’t let that happen.” via @CryptoHealthHQ
Here’s the Eight Talking Points you need…
(1) Tokenization:
Crypto health will exponentially increase the global economy.
Perhaps the sexiest feature of the decentralization movement, or web 3.0, has been crypto assets.
University of Oregon finance professor, Stephen McKeon, PhD, writes “As the world’s assets become increasingly liquid, the concept of ownership will evolve in ways we cannot yet imagine.”
In 2017 alone, the total market capitalization of crypto assets (which was, for all intents and purposes was basically bitcoin, ethereum, and a couple other) ballooned from $17.9B to an astounding $795B, according to Coin Market Cap.
The speculative value of crypto assets reflect the speculative nature of their ventures and whose success rates will track with those of venture capital.
While there is undoubtedly some speculative value built into some token valuations, a studied student of economic history will easily extract the parallels of other radical technological innovations.
Think…would you even have clicked on anything related to crypto health as much as two years ago?
The explosion of new market capital from crypto assets and “tokenization” is remarkable and resembles the birth of consumer internet in the 90s.
What’ is tokenization?
Tokenization is primarily based on three economic cases: demand for scare assets, the ability to fractionalize assets, and the ability to make them liquid and fungible across other financial instruments.
(Image Credit: Chris McKoy)
But tokenization is not just for financial instruments. It’s basically extending market dynamics into places where markets have never been before.
But the stakes are just as high, if not, higher this time.
Complacent incumbents who cast doubt on the web 3.0 face the likely tsunami of disruption from the coming tokenization of everything.
Tokenization will not simply affect firms, it will affect the global balance of power.
As the world reels from contemporary geopolitical tension and rising nationalism is as the economic fallout of the current consumer internet movement (and not simply globalization which is a byproduct), a greater opportunity or threat looms.
Entire nation states and their constituencies will be affected. In fact, some cryptocurrencies claim to be a country while other sovereign nations are issuing cryptocurrencies.
This trend will touch healthcare in as many places as you can imagine and in more that you cannot.
Strictly speaking, tokenization will dramatically grow the global economy, pushing new money into new entrepreneurs, building new companies, hiring new people, creating new products, and building out new categories.
Crypto health will be expand and balloon by any metric: raw [insert sovereign currency here] invested, entrepreneurs, crypto assets, market capital, news articles written, and solutions brought to market.
It’s an exciting time to be a crypto health market participant. And one thing’s absolutely true: it will be fun to watch.
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(2) Interoperability.
Crypto health will improve interoperability.
Perhaps no problem is so profound in the twentieth century provision of healthcare than the haphazard way by which our unportable, broken, and discontinuous health data moves (or doesn’t move) from context to context. It’s a problem that costs time, money, health, and ultimately lives.
One of the greatest tragedies of technology is the explosion of data silos and lakes without connecting streams. Without interoperability, firms lose the ability to provide context and value to their clients.
Patients lose because of the associated costs of managing a portfolio of data silos. Patients realize losses by not having a synergistic effect of combining all the data and processing as a whole.
Said another way, the whole is greater than the sum of its parts, and patients incur the opportunity cost of that synergy effect everyday. It’s a completely self-inflicted error and a market failure of firms to work together to provide this value to patients.
Consequently, interoperability has become something of a rally cry.
But due to the lack of cooperation incentives between firms, it’s a project put on the back burner. Something to herald but which has yet to arrive. Such are the woes for interoperability cheerleaders.
Yes, we all want interoperability. It would be great for patients. But the reasons holding its transcendence over healthcare are not without merit either.
According to this article, the top five challenges to achieve healthcare interoperability include:
-Standardizing patient identification;
-Enforcing varying health IT interoperability standards in various environments;
-Enforcing industry-wide interoperability measurement standards;
-Coordinating stakeholders across the healthcare value chain; and
-Ending data blocking.
Economists should call the discontinuity of data what it is: a tragedy of the commons problem and a market failure.
The answer, however, might surprise you.
It’s not a big national government solution. The answer is not a bunch of state, or city solutions which would only further, and ironically, perpetuate the data lakes.
The answer is to understand that each economic actor reacts to incentives.
Private or public crypto health ledgers and blockchains could be designed to overcome these obstacles by providing a token rewards for certain actions, making it profitable for all economic actors, firms, hospitals, and patients to cooperate. (That’s what DHLT is doing).
And that’s a legacy worth fighting for!
(3) Privacy:
Crypto health will save face.
The Bitcoin blockchain has been a highly controversial decentralized ledger technology precisely because its net effect has been a decrease in privacy. When anyone can see any transaction, metadata is commonly owned and thus common knowledge.
Federal agencies know this. That’s how they’ve been able to track down and put bad bitcoin actors in prison (which is a good thing, we argue). So let’s not pretend that all ledger tech is inherently private. Because clearly it’s not.
However, not all digital ledgers were so recklessly designed (from a privacy standpoint). And in the field of healthcare, privacy matters. A lot.
A properly designed decentralized ledger technology should increase privacy for all users and swing the balance of data power over from firms to consumers in the long run.
While this data trend may be a bad thing for the earnings in Facebook’s annual 10-K, it’s great for everyone else. Any rational human can see that the trend of turning your customer into a product was never a good idea (though it was profitable).
This is especially true in healthcare where the data in question isn’t something as irrelevant as which Netflix show you “liked” but rather your blood type, prescription information, and medical conditions.
Privacy’s pendulum-swing away from firms owning data to consumers is a great thing for patients.
How big is this trend?
Consider the General Data Protection Regulation (GDPR) rules which cover data use by firms in the European Union (EU)…
GDPR is no longer a concept or buzzword: it became law for operating inside of the European Union on 27 April 2016, enforceable after a two year transition period. (That means right now!)
The GDPR is a “single set of rules” for EU member states governing how firms collect, gain consent, and use data. Of its many features, it establishes new rights for EU citizens like the right of “access” “erasure” and “portability.”
Moreover, one of GDPR’s key features is “data protection by design and default” which requires firms to fundamentally build data protection into its core product or service.
What a stark departure from the modern state of nature in data use…
It remains to be seen if America’s less powerful, antiquated equivalent version of GDPR for healthcare, called Health Insurance Portability Accountability Act (HIPAA) and its 2013 upgrade — the HITECH Act — will place sufficient privacy protections for consumers or whether further congressional action will become inevitable. The jury’s still out on that one…
But innovators have already begun trying to solve the problem.
The electronic medical and/or health records in particular is one vertical in the crypto health category where we already see innovation with firms like Patientory and Youbase (both of which will be covered in greater detail in future articles).
The net effect is the creation of entirely new markets, many of which are in there infancy, like C2B data companies, like DataWallet.
Greater privacy for patients isn’t unique to crypto health, it’s a feature of the decentralization movement, in general, which stands to benefit drastically from this new balance of power.
With proper architecture, healthcare’s adoption of crypto health technology will increase privacy for patients.
(4) Security :
Crypto health will reduce risk.
What do Facebook, JP Morgan Chase, Target, and Home Depot all have in common besides being some of the best known data breach cases in recent memory?
One only need look here to see just how uncountably many data records have been improperly accessed, hacked, and/or released since web 1.0.
It’s truly frightening.
All of those sites represent consumer products that are completely elastic and substitutable for other products.
You can close your bank account and open another one. You can cancel your credit card and open a new one. You can even delete all your facebook account data, close it, and open a different social media account.
But not with last summer’s story of the monstrous breach at Equifax, where as many as one third of Americans had their identities stolen.
But thanks to an inept American congress, Equifax (who is part of a cartel of three) faced almost no penalties. In fact, this same congress, hilariously, asked Facebook how it would recommend they regulate it.
The point is, you can’t cancel your identity. You can’t cancel your social security number. You just can’t.
In 2016, according to a Becker’s report, 27 million Americans were affected by healthcare data breaches which occured 450 times, as reported to the Department of Health and Human Services.
Companies like Bitbounce have tackled this problem in the email SPAM case. In this solution, you set your inbox to charge people you don’t know who wish to send you an email.
That means your inbox is only filled with people who you know and/or people by whom you’ve been paid. Could health records be the next?
Crypto health and blockchain will increase the identity security and record access control.
(5) Insurance Claims Time :
Crypto health will save time.
Did you know that the average consumer waits 30–45 days to get a health insurance claim paid out? That’s according to Uphelp.
What if that time was reduced to 30 to 45 seconds? That’s why you should keep reading…
Crypto health records will reduce the sheer amount of unnecessary back-and-forth process of claims adjudication that most consumers face when settling a payout.
Decentralizing policies helps patients, their doctors, and anyone else in the value chain of healthcare avoid unnecessary, costly administrative bloat from the triangulation between doctors, insurers, and patients. Crypto and blockchain could help.
This means care will be provided and reimbursed faster.
Layers of automated permission will replace layers of human customer support. And healthcare will get delivered much faster, thus enabling better personalization of care.
In turn, that will improve patient outcomes, save lives, and increase physician satisfaction (which is is staggeringly low, according to Merritt Hawkins).
Of course, insurers will realize massive savings from the effect of decentralizing their claims process.
These savings will drive down the supply-side costs of their plans, which all things equal, will reduce the price of insurance.
Crypto health will make healthcare accessible to more people, creating a virtuous cycle.
(6) Insurance Claims’ Fraud:
Crypto health will dramatically reduce claims’ fraud.
Annual financial losses to health insurance claims fraud is worth tens of billions of United States Dollars. Wow. That’s according to a report by the National Healthcare Anti-Fraud Association.
Using crypto health will make it much harder for bad actors to make fictitious claims, spoofing transactions on persons who do not exist, who have deceased, or who through identity theft.
The basic merit of a decentralized ledger (blockchain or otherwise) is its resilience to manipulation.
Such ledgers are, in effect, trustless because they do not require the user to place faith in one central point of failure. Rather, each node in the network shares access to the same ledger, receipt, or accounting of transactions.
While insurance fraud happens in a number of ways, the consensus view is that it will become harder and harder to commit insurance fraud if identity is more robust and data is more resilient through technologies such as decentralized ledgers.
As the decentralization of insurance plans becomes more mainstream and widely adopted, fraud will decrease, and so will the cost of goods sold.
This will have net positive effects for the supply-side of health insurance, shifting the supply curve rightward.
Therefore, all things equal, crypto health will reduce the price of healthcare that consumers pay.
(7) Supply Chain Management:
Crypto health will save lives.
Here’s a shocking statistic: counterfeit drug production robs the United States of 750,000 jobs and $200 billion in annual revenue. That’s according to a peer-reviewed article published in July 2014 in American Health & Drug Benefits.
One source of counterfeiting naturally arises after the product has left the factory and before it makes it into pharmacies. Product is replaced with “look-alikes” and sold onto the black market.
Another source is sheer counterfeiting operations with varying degrees of economies of scale. These have been widely reported.
Pharma already takes considerably quality assurance measures to ensure that shipped product meets its own standard.
And there’s external pressure from the DEA, FDA, state and local regulators, as well as consumer advocacy groups.
Okay, so could crypto health and blockchain help?
Using crypto health will help save lives through better, faster, and cheaper supply chain processes. How? The entire value chain could chose to work together to create a decentralized ledger that accounts for the “history” of any one product.
Each product will have an immutable accounting of its production process, origin, transportation, and entry into a retail environment. And a suspecting consumer (along with a regulator) will be able to perform due diligence.
The process will be as simple as looking that the shipping history on parcel mail.
The net effect in the United States alone is three-quarters of a million jobs and $200 billion dollars in annual income. That’s just in the US. This is a global problem.
The economic effects of curbing fraud have direct price impacts on end-consumers. When fraud is high, so are loses to producing firms who must raise prices to compensate. Then, end consumers pay the resulting price increases.
Fraud hurts everyone from the soul of the perpetrators, to the bottom line of the firms (who have to layoff or decide not to hire), to the end consumer, to the burden of regulators and enforcers.
Crypto health will curb fraud, lower losses for firms, and — ceteris paribus — make products more affordable to consumers.
(8) Research, Clinical Trials :
Crypto health will help academia.
One of the basic goals of the internet was to make decentralized information in disparate universities more accessible amongst peers and colleagues. Blockchain and crypto track with the internet’s original core design principles.
This is great news for biomedical researchers, universities, and academics alike for a number of reasons.
First, because blockchain data decentralizes trust, overcoming methodological problems in peer reviewed research will be made simpler. Data has never been, at the same time, so profuse, so sparse, and so disintegrated.
Because of the transparency feature and permission capability in some ledger technology, crypto health users will be empowered to foster better patient relationships who can grant specific permission in specific scenarios to specific pieces of their data (which they own).
This will embolden more patients to participate knowing they have greater say over how their data is and could be used.
It will hamper fraud and data manipulation temptations by researchers, and it will overall improve the academic climate as well as an institution’s clout from earning more priority journal publishings.
How?
Better research pools will be created. Better research will be published. And, the Erdos number of good research will expand, creating a virtuous cycle of incentives for using crypto health ledgers and increasing disincentives for forgoing them.
And that’s only one narrow feature of using crypto health solutions for universities and researchers. More possibilities abound, many of which have yet to be envisaged.
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Come to the next Crypto Health Summit and share your use cases with a group of your peers!
These are the eight technical problems being tackled on inside the world’s crypto healthcare consortium, Digital Health Ledger Technologies. Apply your knowledge. Join us today. Click here to learn more.
Preston Bates is a co-founder of Digital Health Ledger Technologies, Co-Host of the Crypto Health Summit, and Publisher of The Crypto Health.
