Eleven Reasons Why Distributed Ledger Technology is Perfect for Healthcare

An initial assessment to determine if blockchain is the right software solution

There is about 1.6 Exabytes of healthcare data in thousands of databases (Stanford Medicine Health Trends Report, 2017)

From databases to distributed ledgers

Healthcare analytics is based on data and data sets that include medical, genetic, demographic, IoT, financial and insurance information gathered from multiple databases. Due to the diversity of these sources data standardization is key for efficient and meaningful use of the information which improves collaboration between healthcare professionals, care providers, patients, insurers and government agencies.

Examples of such healthcare databases are:

Nonetheless, these multiple, centralized databases have proven to be vulnerable, expensive and unable to provide the integrated insights necessary for personalized, safe and efficient care. Therefore Distributed Ledger Technology (DLT) and most notably blockchain, may provide a secure, immutable, decentralized alternative to share and transact data (see below).

From ‘Blockchain beyond the Hype’ (World Economic Forum Report, April 2018)

11 reasons why Blockchain fits healthcare:

Here are 11 questions that will help determine if a blockchain solution is appropriate (Answers in BOLD are for Healthcare).

Same source

A. Are you trying to remove intermediaries or brokers? YES. It is debatable if intermediaries like Pharmacy Benefit Managers (PBMs), Group Purchasing Organizations (GPOs) and Physician Buying Groups (PBGs), enhance economic efficiency by creating economies of scale through access to larger product portfolios and multiple distribution networks.

B and C. Are you working with digital assets and can you create a permanent, authoritative record of the digital asset? YES. The mandatory transition to Electronic Health Records (EHRs) has created an estimated global market of $20B that will continue to rise. The promised advantages to healthcare providers and patients in terms of increased productivity and patient satisfaction are yet to be seen.

D. Do you require high performance rapid transactions? NO. Data entry into EHRs are mandated for reimbursement and done within the first 24–48 hours after the clinical encounter.

E. Do you intend to store large amounts of non-transactional data as part of your solution? NO. Large volumes of data from images and genomics will continue to reside on dedicated cloud-based servers.

Same source

F. Do you want/need to rely on a trusted party? YES (for now). The current rules based on the Health Insurance Portability and Accountability Act (HIPAA, 1996) define the use and disclosure of personal health information (PHI). With the incorporation of best practices into secure, smart contracts, this need may be in the future unnecessary.

G. Are you managing a contractual relationship or value exchange? YES. This is an appealing feature of the blockchain in healthcare, especially when reducing unnecessary friction and cost in the supply chain or during payments.

H. Do you require shared write access? YES. Since many (if not all) members of the network will need to input into the ledger (doctors, nurses, staff, payors, in some cases patients), shared write access is necessary.

I. Do contributors know and trust each other? NO. This is perhaps the most advantageous feature DLT brings to healthcare. Because of mis-aligned incentives between healthcare professionals, hospitals, payors, patients, families and regulators, Blockchain can be designed to create a balanced, sustainable trust-less system (i.e. does not require third party validation).

J. Do you need to be able to control functionality? YES. Self sovereign permissioned EHRs may empower patients to manage their own health.

K. Should transactions be public? (Sometimes) YES. Non sensitive information, such as price transparency and quality metrics can create a Hawthorne effect that improves performance.

In summary, Healthcare provides a very strong, if not perfect use-case for blockchain software solutions. (Two good examples are Amchart+, a self-sovereign EHR; and SeeThru, a decentralized P2P payment platform).

Healthcare systems use a shared repository (EHRs) with multiple writers (doctors, nurses, staff), it has transaction dependencies (adherence to treatment plans, payments, regulations) with multiple intermediaries (professionals, patients, payors, regulators) that have no or minimal trust between them. Hopefully, blockchain will be able to remedy many of these shortcomings.


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