4 Conferences, 3 Weeks and CryptoHealth’s One Message
Blockchain is changing the definition of Value in Healthcare forever
Before a busy October filled with meetups and speaking engagements, I decided to visit one of Europe’s oldest hospitals, Hôtel-Dieu (Hostel of God) in Beaunne, France, to remind myself what healthcare is really about.
And though 575 years passed since Pope Eugene IV allowed Philip the Good, Duke of Burgundy, to build a multipurpose institution and offer shelter, food and medical care to the sick, walking through the corridors of Hôtel-Dieu felt eerily familiar. With over a hundred beds (above); a pharmacy (below); a kitchen; quarters for nurses, doctors and pharmacists; a chapel and an inner garden for families to meditate, pray and heal; it was like walking into any modern-day hospital.
I learned that to afford the growing hospital budget administrators engaged in wine sales, as nurses and doctors tirelessly worked to treat victims of plague, hunger and violence. This being no different than today’s hospital profiteering practices, as doctors battle infectious breakouts and professional burn out.
So if hospitals for centuries are doing ‘business as usual’, what are we trying to disrupt?
There is ton of innovation, but not a lot of disruption
With over 290 deals worth $6.8B in VC funding, 2018 will surpass all previous years with an average deal size of $23.6M (below). These investments will fund: on-demand services (American Well, $291M); consumer health (23 and Me, $300M); diagnosis (Butterfly IQ $250M), monitoring (InfoBionic $50M) treatment of diseases (Outset Medical $132M); and Fitness (Peloton $550M).
In addition, coming to market are on-demand pharmacies (BlinkHealth, TelePharm); remote prescription services (RomanPharma, Hims, Lemonaid) and dozens of recently FDA-approved digital health products (digiceuticals).
This year’s most notable innovation is of course ABC’s (Amazon-Berkshire-Chase) Health Initiative. With a combined 1.2M employees, 5M sellers and 310M customers on Amazon, CEO Dr. Atul Gawande has an opportunity to test the utility (or futility) of digiceuticals and the impact Amazon might have on pharmacy supply chain, claims management, medical records (think Alexa) and Medicare/Medicaid (think Prime for groceries and home needs).
However these investments focus on solutions that improve products and services and do not aim to threaten incumbents or create a new way of doing business in healthcare.
My conclusion from 4 CryptoHealth Conferences is: Decentralization is the Disruption
Direct Primary Care (DPC) is an innovative care model designed to improve access to healthcare using a simple, flat, affordable membership fee. With no fee-for-service payments and no third party billing, providers are able to concentrate on cultivating enduring, trusting relationships with their patients.
Not surprisingly many are also looking to Blockchain technology for self-sovereign electronic health records, transparent pricing platforms, P2P payments and apps that help patients be directly recruited for clinical trials.
Some of the companies I met during these last three weeks include:
- HashedHealth, HoneycombHealth, and Science Distributed at their NYC Meetup.
- MetaMe, Hpec, SBT, IBMiX, SeeThru, AmChart, Preventum, Hayver, Oriah, BlockMedX, Solaster, B4SD, MultiScale Health at the CryptoInvest Summit Healthcare track in LA.
- Aurablocks at Oracle’s OpenWorld in SF.
- Hedera, Longenesis, Lynkeus, HealthBank, Solve.Care, patientory, Nebula, at the Healthcare Round Table during the Malta Blockchain Summit.
Yet many continue to ask me, which one of these solutions is or will be the “killer” app, dApp, base chain, wallet or platform?
This question is misleading since apps and infrastructure develop in tandem, in responsive cycles and not in distinct, separate phases. It makes no sense to select a killer app, without a killer platform (below).
However if pressed, I would say that the “killer app” in Cryptohealth are security tokens. For the first time ever, patients will be able not only to “produce health” by using digital health apps. They will also be able to fractionally own the platform they use and become “wealth producers”.
CryptoHealth’s one message: It’s all about what you are willing to give
Most understand that decentralized systems are attack-, collusion- and censorship resistant. Data is less likely to be stolen, sold or misused when it resides in a decentralized ecosystem managed by self-sovereign agents.
Also, many are starting to realize that just like land and water, data is transforming from a resource that is simply used, into one that is owned and traded. Therefore companies like Hu-manity who view data as digital property are offering appropriate legal protections.
I do however think that the single most important impact blockchain has on healthcare is how it changes its’ concept of Value.
Traditionally value in healthcare refers to Quality divided by Cost (V= Q/C). The lower the cost, the higher the quality, the better the value.
The problem with this equation is two-fold. First, quality among patients, providers, payers, administrators, industry and government are different and at time opposed (an expensive medication is of high value to a patient and a drug manufacturer, but of low value to a payer or the government because it is at the expense of other beneficiaries). The second problem is that over-emphasis on cost reduction eventually causes a decrease in quality of care and thus in overall value.
The design of a decentralized balanced ecosystem for multiple non-trusting participants shifts the definition of value to: what you are willing to give divided by what you want to get (V= Give/Get). The more you are willing to give to the system, the higher the value.
For example employers that are willing to invest and give incentives to patients to engage in healthy behaviors, offer a high value proposition. For every $1 invested in smoking cessation $6 are saved and the ROI for drug treatment is 12:1! Local and State governments who provide vaccinations benefit up to 44 times the vaccination cost and pre-natal care significantly reduces pregnancy-related costs and long-term child disability.
Conversely, patients who expect to get free care and do not give up unhealthy behaviors; or doctors who want to provide best care without being cost-conscious; do not offer a sustainable value proposition.
Blockchain in Healthcare can mean many things to different people. For hospitals it might be a way to solve data insecurity and interoperability; for doctors it might help manage professional identity and simplify payments; for pharma and medical device companies distributed ledgers can assist in supply chain, inventory management and fraud detection.
But most exciting is giving patients the opportunity to control and own their data, their insights and their health.
This self-reliance translates not only into healthier but also wealthier, happier lives or as Rabbi Hillel the Elder said in Pirkei Avot (Chapters of Fathers) 1:14
…“If I am not for myself, then who will be for me? … And if not now, when?”…
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