BLOCKCHAIN: All Set To Revamp the Future of health insurance

Authors: Geo Liantal Lawrence| Devika S Prakash| Joseph Augustine| Hanan K Hussain|Jibin Jose

For the global travellers, India is increasingly becoming a choice of destination for medical tourism, with super-speciality medical care facilities at hospitals in Indian cities available at rates lower than that in the developed world. But for most Indians this scenario is entirely different, healthcare is becoming increasingly unaffordable, owing to the rising cost of treatments and medical support in recent years.

The cost of treatment rose at a growth of double-digit pace, outpacing average inflation in both rural and urban India over the past one decade, according to the recently published results of one of the cross-national survey on health, conducted by the National Sample Survey Office (NSSO) in the first half of 2014.

Data:NSS Report №574: Health in India

The cost of health care has become so prohibitive that one in four Indians say that they postpone it. And, almost six in ten Indians (57 per cent) worry about their ability to get and afford the needed medical care. The medical care cost of the current economy is so high that none of the poor or lower class people can afford quality healthcare without charities. Thus the major population of our country depends on healthcare insurances to afford their medical needs.

Multiple studies conducted by NGOs and other committees have concluded that the present models of insurance that played out so well in developed countries are ill-equipped to address the problems in underdeveloped countries and that the poor are too poor to afford a health insurance. And it also makes people more dragged into dilemma through its high premiums, prolonged verification process and even at times by denying their medical claims.

The global insurance market is completely based on their age-old principle of trust management. The blockchain is a technology that disrupts this paradigm and introduces a business model where trust is no more a factor. The one way people describe blockchain technology is as the “internet of value”. This term is perfect but, hope it deserves a closer inspection.

We have become used to a decentralized online platform (the internet) for sharing information. But when it comes to the transferring of valuables, for example, money, we are usually forced to fall back on age-old fashioned, centralized financial establishments such as banks. Even online payment methods like Paypal being the most obvious example, generally require integration with a bank account or credit card to be useful.

Blockchain technology offers the possibility of eliminating this “middleman”. It does this by filling three important roles — recording transactions, establishing identity and establishing contracts, which are traditionally carried out by the financial services sector(middleman).

Besides simply being the backbone of cryptocurrency exchanges, the most powerful uses of blockchain technology are yet to emerge. The blockchain is expected to be so influential over the coming years, so that some technologists foresee it ushering in a new type of Internet, one that stores and authenticates information about every asset, device and individual, opening the door to a range of new technological capabilities.

The blockchain technology that had revolutionised the financial ecosystem shows much promise in decentralizing the insurance industry. If we are able to integrate blockchain and automize the verification, underwriting and several other processes involved, we can considerably reduce the operating costs. This provides us with the opportunity to widen the customer base and make the service affordable to the economically backward. As the underlying architecture is distributed and inherently tamperproof, the security of the system will not be compromised. The Smart Contract, the brain of the blockchain, is designed to address all of the transactions and communications and handle the issues and breaches that might arise.

By implementing Blockchain in Healthcare insurance we could eliminate the middlemen and it’s assured to bring down operating costs and fasten the claim verifications and reimbursement by automating most of the processes. This opens up a new opportunity to widen the reach of insurance by occupying customers who were previously unable to afford insurance. By crafting a detailed business model, in which healthcare providers who have significantly large customers base will be able to provide micro-insurance policies to patients and thus helping them afford quality healthcare. As the healthcare providers themselves craft the policies according to the demand of the patients, the policies will be customized to each demographic and each hospital, and the patient will be having the choice regarding their insurance options.

We are a group of programmers, engineers and blockchain enthusiasts working together to build a Decentralised platform for health insurance products. We aim to provide the benefits of insurance to the “excluded” population of India. By harnessing the power of peer-to-peer networks and micro-insurance, the existing architecture of corporate insurance can be disrupted. Tokenizing of insurance can easily distribute the risk factor and can be even monetized, making insurance not only a service but also an investment opportunity.