“FREE Healthcare!” — In 3 Steps
Real Crypto-Economic Disruption and Revolution for Healthcare
When does the Blockchain and crypto community start taking healthcare really serious? While there is much activity in the industry, most of it just scratches the surface. This is despite the fact that health may be the most important aspect of our human lives. Even more so, silos, cartels, many layers of intermediaries, and top-down regulated hierarchies that appropriate all data from patients (“to treat you, sign this waiver giving us all rights to your data and your body”) extract huge rents in exchange for bureaucratic formalities and inefficiencies. They look like poster-children of the pre-Blockchain world, very similar to the one in finance and banking.
Most Blockchain initiatives are limited by the existing and outdated institutional healthcare framework.
The truth is, though, that the nature of today’s healthcare reforms is just evolutionary — while technology transforms the world around us in revolutionary fashion.
Tinkering at the Edges of Trillion-Dollar Value
Incremental improvements of the system do not get the job done, but that is exactly what most of today’s healthcare Blockchain projects suggest. They have important ambitions, like to introduce crypto-secured identities, or to more efficiently, securely, and immutably share documents. In reality, though, most such Blockchain initiatives happen inside the existing, outdated framework and are limited by it. That is equivalent to tinkering at the edges.
The good news is that the healthcare system not only has to be substantially transformed, but that crypto-economics can show the way.
Much of Blockchain’s premise and promise is about decentralized (or “distributed”) governance of solutions that focus on the individual person, and new economic models that eliminate inefficiencies by disrupting traditional power structures and cut out intermediaries. Using this measuring stick, and at least en par with the world of finance, no industry seems more ripe for disruption than Healthcare.
Above all, the value potential is dramatic. Billions of people have thousands of diseases introducing massive costs to each person and to society. Humans cannot reach their full physical and mental potential; they are less productive, often completely unproductive, for weeks or even years or decades, at a huge economic cost to themselves and society — and the even higher pain of limited well-being and ability to live a fulfilling life.
Tokens can create the equivalent of a public good by facilitating the collection of data, to be used to lower health care costs and enable the delivery of (in the net) free healthcare.
Applying crypto-economics in healthcare has little to do with digitizing patient records. Rather it is about delivering typical Blockchain-benefits, eliminating intermediaries, focusing on the individual, and leveraging network effects. A smartly applied token mechanism can introduce genuinely disruptive dynamics into the underlying system that open up revolutionary new capabilities.
Essentially this internalizes health value into a token, creates the equivalent of a public good (e.g., analyzable data) while encouraging for-profit innovations using it, and lowering overall health care costs. By contributing data in exchange for a token, it enables the creation of this value in the first place. Everybody wins.
To a degree, it can deliver crucial aspects of free healthcare, by tokenizing and thus storing value that is created in a network by the independent actions of individuals, and providing a means to liquidize this stored value as the healthcare value is being extracted. The token contains the time-value of health (a future asset), not the time-value of healthcare (a future liability).
Better health for more people, without additional cost to society? All it takes may be a new economic model.
Tokens can contain the time-value of health.
This is where crypto-technologies and crypto-economics used by Blockchains come in. In three steps they can (1) Liberate our thinking, (2) Transform traditional structures and institutions, and (3) Introduce revolutionary new economic models. The cumulative effect can be no less than — FREE healthcare, in all meanings of the word.
Let’s take it step by step.
Step 1. Liberate our Thinking: Step out of the 19th Century.
Although Biotech has been one of the hottest emerging technologies around, Blockchain’s impact on healthcare so far has often been rather uninspiring and with limited and rather unimaginative solutions.
A possible reason for this is outlined by James Clear when he points at the power of “first principle thinking.” His main premise for revolutionary change is not to start with established solutions and improve on them (as most healthcare Blockchain initiatives do), but rather look at underlying capabilities and larger goals.
Currently, almost all Blockchain-related activities in healthcare are centered on two aspects: more efficient and reliable storage and sharing of health-related data, and more effective analysis of this data.
These are in principle good approaches into the right direction, able to reap profound benefits. They are limited, though, since many of the inefficiencies they are tackling are of a systemic nature, driven by traditional and outdated governance structures. The resulting speed of progress is anemic compared to its potential, slowed down by regulatory and ’scientific’ processes that are highly bureaucratic and inefficient.
Healthcare’s inefficiencies are of a systemic nature. Blockchain technologies need to directly address this.
Every week we hear about some progress being made in healthcare. Somebody performs a peer-reviewed ’scientific study’ and publishes results that identify some correlation relevant to health. The total number of people reviewing the study is tiny, often no more than a handful, sometimes less. Not the 1,804 that I counted for $3 shoestrings on Amazon, or 3,104 for an $11 watch.
Such scantily reviewed, and usually not replicable results (often not even by the author(s) of the studies themselves), lay the scientific base for ‘progress’ in medicine. Then scientists conduct drawn-out research for solutions, followed by clinical trials, and the long march through the institutions begins. If we are lucky, we end up with some new FDA-approved treatment or medication, and proud we are.
Conditioned by having not known anything else, we just take today’s processes and institutions as a fact of life, and as constraints within which we need to live and work. This leaves the focus of traditional healthcare initiatives on 19th century style health insurances and early-20th century regulatory structures, and on introducing higher efficiencies mostly via mid-20th century business and management methods.
The ugly result is that this perpetuates a de-humanized process. We accept incremental progress while technology in many related areas (computing speed, communication speed, AI, genomics, social media) shows exponential change rates.
New technologies and new abilities for organization require new approaches. Gene sequencing, gene editing, and big data, owned by individuals and personalized, need to be scaled out dramatically. Opening them up to the self-organizing power of complex systems introduces network effects. Humans should not indiscriminately be required to provide information and transfer ownership and control of data to traditional healthcare providers and supply chains. The full potential of decentralized solutions needs to be realized.
Once we accept this, and demand it, a vast range of new opportunities open up. First, though, we need to be willing to take the next step: disrupting the current institutional framework.
Step 2. Transform Healthcare Structures: Wither the Arrogance of the Institutions.
In the 1880s, politicians in Germany had the idea to introduce “health insurances” to pay for medical expenses of the working population. A century and a quarter later, we are still fiddling with the same approach. “Healthcare for everybody” is equated to “health insurance for everybody,” as if that would even remotely be the same thing.
Health insurance is merely an intermediary between human (patient) and treatment. So are clinics, pharmacies, regulatory bodies, to some degree even doctors and care givers. In an enlightening article, The Economist just recently mentioned even more bureaucratic and financial intermediaries, such as wholesalers, benefit managers, and pharmacies, generating abnormally high returns in the U.S., about $126 per American person per year.
Beyond disproportionate returns, many of these intermediaries’ processes also are inefficient. The complexity of the system makes it difficult for them, and for drug companies, to generate profits. Their success often seems more a reflection of their political and lobbying powers rather than management acumen. On top of that, the arguably ultimate intermediaries, governments, are running out of money and keep extracting ever more from their citizenry, sometimes with diminishing returns, like when life expectancy falls when healthcare costs rise.
No matter how one looks at it, all is not well in the healthcare business. Nobody is having fun. And, by most accounts, healthcare fails when measured by its potential.
Since we want personalized medicine anyway, why not start with personalized crypto-economic motivations, using a token?
How can we eliminate most of these intermediaries, or radically transform their role? Since personalized medicine is what we try to achieve anyway, we could start with crypto-economic motivations and processes, by tokenizing key drivers for future health.
Like with banks and fiat money, dis-intermediation in healthcare seems counter-intuitive to many people. Over 125 years of health insurance leave us uncomfortable challenging roles and rights of institutions and processes that exist to help us.
A few weeks ago, I had an email exchange with two microbiologist and geneticist friends. The FDA had authorized personal genomics and biotech company 23andMe “to screen customers for three mutations (…) associated with breast cancer” if it does “include warnings,” making it “the first company ‘allowed to test for cancer risk without a doctor’s prescription in the United States.’”
At a first glance, this sounds like ‘progress’ (and in a twisted way it is). But then let’s think about the cold hard facts of what this FDA decision says: If I have a data file and want to pay somebody else to perform statistical analyses of this data file and compare it with a reference file — a governmental agency says this is a crime unless they approve this! Cui bono?
In my understanding that is all that 23andMe are doing. They are not putting anything in any body; they are not cutting up any body; they are purely analyzing data on behalf of a person who privately owns it. In this process they may (or not, in most cases relating to the above they do not) also sequence the person’s genome. Even that is a private and non-invasive and purely technical transaction where using the term “medical” stretches its definition.
Today, the American government assumes it has to authorize people and businesses that want to analyze people’s genome data.
The FDA seems to consider it a crime if you give me $50 and a personally owned data file that you personally produced by analyzing your own spit that you put into your personally owned $1,000 Oxford-Nanopore sequencer, and if I load this data file onto my personally owned computer, open Python, run a statistical comparison to a similar data file that is publicly available, and tell you about the differences and what some people think some of these differences could mean.
Isn’t it the antithesis of “science” — even of “free will?”
What a broken system. So let’s transcend it.
Step 3. New Economic Models: FREE Healthcare.
The economic challenge in healthcare is to address the above: developing a new way of paying to make or keep people healthy while putting the focus on the individual person and their needs. Crypto-economics can help in several ways.
It starts with a new look at value and costs. Instead of storing monetary assets via fiat money in a health insurance to cover COSTS for future health care, we can use monetary assets as an investment to create VALUE for improved future health. The source of this value is created through network effects leveraging individually owned, but anonymously shared, health-related data. The means to extract this value is artificial intelligence (AI) and machine learning. Fred Ehrsam just wrote a great article about that.
It is no longer based on insurance via a variety of fiat currencies that can only be accessed through an inefficient politically controlled and regulated process dominated by intermediaries and further complicated due to it being splintered by jurisdiction. Rather, tokens become investments into the enabler of health. Tokens can quantify the value of Healthcare data across jurisdictions and independent of intermediaries.
Crypto-economics moves the focus from HEALTHCARE to HEALTH, from COST to VALUE, and from INSURANCE to INVESTMENT.
Instead of focusing on the costs and the payments at the time when people get sick, everybody can get rewarded for creating value that in the long term reduces or even eliminates the need for (some or most) healthcare. It eliminates the splintering into legal jurisdictions and generically centers on commonalities of human health and the need for big data. Logically, human health data needs to be shared and accessed via AI, to find patterns, correlations, and causations. For this, the size and diversity of the data set are key enablers, laying the foundation for network effects. Tokens standardize the valuation of such data and can efficiently facilitate its sharing.
Such a vast health-related and genome data-set has dramatic value, likely in the trillions of dollars. Not only does it lay the foundation to identify causes and triggers for health issues. We also can use it to actively battle diseases on the ground floor. This reduces the time that people are sick and unproductive, and the costs associated with treatments. It creates value by enabling the treatment of people before they get sick — enabled by data collection and analytics.
”Free Healthcare“ does not mean that all healthcare is free. It means that we can make dramatic healthcare progress by funding data collection and thus preventative measures. This creates health benefits, while potentially even reducing overall costs. Tokens can thus fund and pay for advances that actively and significantly reduce times of sickness.Win, win, and win again.
Time-Value of Health vs. Time-Cost of Healthcare
How much value can be put into a token like this? Could its value appreciate so much to pay for medical treatments? We will find out, but I think there is definitely a correlation between the value extracted from a data set via a new treatment, and the cost of applying that same treatment. The beauty of a token concept is that it can bridge this economically.
Our Healid project pursues such crypto-economics. It uses tokens to efficiently fund the secure and efficient collection of humanity’s genome and other health data via self-reinforcing motivations, and to share it for everybody’s benefit.
We say we all “Heal One Another.”
Images from Pixabay.
