Blockchain.
Once the province of alt-tech gurus and hacker communities, the technology has grown increasingly ubiquitous, frequently appearing in the pages of financial journals, in the headlines of tech articles, and now even corporate boardrooms.
Earlier this year, professional services firm Deloitte Touche Tohmatsu Limited released its 2019 Global Blockchain Survey, which consolidated opinions from nearly 1,400 executives of large businesses from a dozen countries across the globe. Of those surveyed, 53 percent indicated that blockchain had become a critical priority for their business, and more than 40 percent identified this emerging technology as a “top five” strategic priority.
These executives are so confident in the platform, in fact, that 65 percent of respondents expect to spend at least $1 million on the technology in the next two years, and 40 percent place that projection closer to $5 million. Of course, these investments are intended to generate substantive business value, as respondents expect blockchain platforms to yield:
- Stronger data security (23 percent)
- New business models and value chains (23 percent)
- Accelerated production timelines and supply chain processes (17 percent)
A Brief Blockchain Primer
What is it?
Put simply, a blockchain is a ledger for tracking transactions. However, this ledger is distributed across a network of systems, meaning there is no central authority (e.g., bank, government, clearing house) that is verifying and authorizing these changes. Instead, this ledger relies on complex math and data encryption to determine whether a transaction is valid and should be recorded.
Why would someone develop a more complex method to track transactions? Well, blockchain technology was originally developed to solve many of the issues surrounding the transfer of cryptocurrency— alternative, digital means of payment that aren’t backed by a single centralized government.
Users wanted to be able to transfer ownership of this currency directly to each other without a banking or financial intermediary. They also needed a universal means to track this ownership that was difficult if not impossible to fake— hence blockchain.
How does it work?
The ledger is actually comprised of multiple chunks of transactions or “blocks” that record what was transferred and between whom. Each of these blocks is locked from any further changes, timestamped and distributed throughout the network, typically to every device, creating thousands if not millions of identical copies of the record. In addition, each record includes a link to the previous block that was created, creating a “chain” between all of these transactions.
The underlying data of the transaction, traditionally the actual cryptocurrency, is encrypted and only accessible and updateable by the current owner using a unique encryption key. So while the overall ledger (the transfer record and identification of the current owner) is viewable by anyone on the network, the raw information being transferred is not.
Beyond cryptocurrency, these blocks could potentially track the ownership of a watermelon as it starts from a field in Georgia, passes through various distributors, and ends up on a grocery shelf in British Columbia. Or the block could be a patient’s medical information, which is updated and authenticated as they move from their primary care physician to a medical specialist and eventually a surgeon.
Why is it useful?
By leveraging a decentralized process, the system can avoid bottle-necking or proprietary dead ends since the transfer of information is routed and authenticated only by the two interested parties. The encrypted nature of the entire process keeps transacted records safe, visible only to authorized users with the appropriate encryption keys. Counterfeiting also becomes incredibly difficult since the block would have to be manipulated across the entire network simultaneously — simply changing a single file or even a handful of files would have no impact. Since the blocks are linked together in a continuous chain, tracking data throughout the process is incredibly easy.
What Does This Mean for Healthcare?
While blockchain has predominately dominated financial and product distribution discussions, focus has recently shifted to how this technology could impact the healthcare industry as well.
Much like the previously mentioned Deloitte survey, IBM conducted a similar survey in 2017 but instead localized the discussion among healthcare executives. Of the 200 global respondents, several indicated a marked interest in the technology, with 56 percent expecting to implement a blockchain solution by 2020.
These leaders particularly expected the efficiency gains and security improvements offered by blockchain offerings to aid in managing clinical trial records, regulatory compliance and patient health files. And according to a study conducted by BIS Research, the healthcare industry could save up to $100 billion each year by 2025 in costs related to data breaches, operations, fraud, and personnel.
So what are some of the efficiencies that this technology could offer healthcare?
Financials and insurance processing
Blockchain technology holds the potential to accelerate claims processing and the revenue cycle. With an automated authentication platform, medical providers could potentially verify eligibility and finalize claims in real time, vetting proposed tests or procedures against the patient’s insurance plan prior to execution. And with the financials clarified at the start of the process, patients and providers are empowered to know the real out-of-pocket cost for a given visit before any actions are taken.
Supply chain management
Just as blockchain solutions are being applied throughout supply chains across the globe, these systems can be tailored for the unique requirements surrounding medical equipment or pharmaceuticals. A blockchain could deliver increased visibility and traceability for controlled substances, making it easier to identify counterfeit or unapproved medication — a function that BIS Research estimates would save the pharmaceuticals industry up to $43 billion each year. Similarly the provenance and location of medical equipment can be more easily monitored, assisting with maintenance requirements or potential recalls.
Digital identity management
Rarely do patients visit the same medical facility to meet all of their healthcare needs over the course of their lifetime. Instead, their medical history is routinely spread across multiple health networks and isolated clinics littered across several states or countries with no easy way to create a consolidated medical history. However, a decentralized, distributed records model with universal standards could add transparency to these efforts, reducing the likelihood that multiple record identities would be created for a single patient.
Admittedly, while blockchain technology offers several potential advantages for the medical realm, there are still many challenges that will still need to be negotiated and resolved including regulatory expectations, the cost of the technology, and the creation of clear industry-wide standards.
If you would like to learn more about blockchain and further explore the potential impact it can have on the industry; we encourage you to check out part two of our blog.
