In Part I of this blog series, we explored what exactly is a “blockchain” and how does it work. We also briefly examined a handful of ways that this new technology could improve different tasks in the healthcare industry from insurance processing to health records management. In today’s blog, we will examine in a little more detail some of the projected disruptions that blockchain is expected to cause in the medical landscape in the next few years.
Pharmaceuticals
Since blockchains are already in use to track food products and other consumables, extending this technology to managing pharmaceuticals and medical devices is often easiest to envision. And, thanks to government regulation, this method is potentially also the most likely to show up in the market in the near future.
Most U.S.-based drug manufacturers and distributors are already familiar with the Drug Supply Chain Security Act (DSCSA), which went into law in 2014. The act is designed to simplify the tracking of prescription medications by the U.S. Food and Drug Administration (FDA) as these drugs are distributed throughout the country. And while some of the more general tracking milestones have already gone into effect, there are still several requirements for the act that are being phased in, with some not demanding full compliance until 2023.
In particular, by 2023 the FDA is requiring a unique product identifier for each drug that can offer traceability throughout the supply chain, that would frustrate the attempt to introduce counterfeit medication, and that would rely on electronic tracking information that is “interoperable,” or put simply, can be readily shared with other participants in the supply chain — all of which sound perfectly suited for a blockchain.
It should come as no surprise then, that several blockchain-focused organizations are currently participating in a pilot program with the FDA that is focused specifically on creating platforms capable of meeting these 2023 DSCSA requirements. And just this past week, global retail giant Wal-Mart — which can trace roughly $35 billion in annual revenue to prescriptions, over the counter medicines, and other health and wellness products — joined MediLedger, a blockchain consortium of pharmaceutical manufacturers and wholesalers that is participating in the FDA pilot program.
Healthcare
Patient files
Managing medical records is frustrating and inefficient. Sharing files between offices is often complicated, and when patient information needs to be transferred across sites or medical networks, delays are only compounded. And unfortunately, these inefficiencies far too frequently end up delaying procedures and generating billing headaches.
In fact, health information management has grown so problematic in recent years that according to a 2017 survey conducted among healthcare CIOs by KPMG, 38 percent of respondents indicated that the majority of their capital investments through 2020 would be focused on improving their medical records systems.
Coincidentally in that same year, IBM conducted a separate survey that polled 200 healthcare executives spread across 16 countries regarding their views surrounding the impact that blockchain would have on the industry. Roughly 56 percent of these executives predicted that blockchain would streamline records management and 54 percent anticipated the technology would improve decision making at the point of care by reducing the likelihood of inaccurate, misleading, or incomplete patient information.
In particular, blockchain-enabled records systems would demand interoperable identity management for patients, meaning that every actor throughout the chain — whether a specialist, an insurer, or a general practitioner — would be viewing and updating the same block of information associated with an individual patient.
Even better, it’s likely that existing electronic health record platforms would not necessarily be obsolete. Full records could be kept “off the chain” with only summary data and the location of more in-depth files being tracked within the block.
Smart contracts
At the heart of most every blockchain is a “smart contract” process — simple programming code that clearly outlines the business logic or conditions surrounding how the encrypted information is to be manipulated. For cryptocurrencies, these smart contracts typically outline the rules associated with when and how the underlying funds are transferred. But when applying blockchain technology to the healthcare market, these “smart contracts” can be restructured to operate similar to the traditional contracts that are signed during any regular checkup or hospital admission.
For example, smart contracts can be used to track consent management throughout a doctor’s visit, clearly recording a given patient’s approval for procedures or recognition of privacy briefings.
In addition, smart contracts can streamline revenue cycle management by automating the payment process. Alongside the clearly defined rules that dictate how new medical information should be stored or shared, medical providers and insurers can build in the necessary business logic to route payments once the data is gathered from a particular procedure, simplifying the payment process and reducing the need to adjudicate or revisit charges several times.
Medical devices
As wearables continue to gather more biometric monitoring data and as home-based medical devices become more commonplace, the likelihood that the private health information produced by these offerings will show up in the blockchain only increases. Blockchain solutions will empower the secure transfer of encrypted information and will also offer clear visibility into who has accessed this monitoring data, offering patients increased privacy protections.
Insurers
With patient data standardized throughout the blockchain, not only can healthcare providers more easily exchange information with each other, but they can do so with insurers. Similarly, the portability between medical providers will likely be mirrored as a patient transfers from one insurance company (or policy) to another. Since the data is accessed through a central ledger, updates are reflected in real-time and avoid the delays associated with traditional records transfers.
Further, by employing smart contracts, healthcare providers (and patients) will likely be able to determine health insurance eligibility prior to any procedure, preventing medical staff from delivering services not covered by an existing policy.
In the hopes of capitalizing on the potential benefits that blockchain could bring to the payment process, IBM has been exploring how this technology could disrupt healthcare payments for some time now. And in January of this year, it announced that it was now working with Aetna, Anthem and Health Care Service Corporation (HCSC) to develop a blockchain “ecosystem” that would ideally “remove friction, duplication, and [the] administrative costs that continue to plague the industry.”
Considering the millions of dollars already spent on blockchain technology and the projected billions that it could save healthcare, the advent of these new platforms seems almost inevitable. But of course, innovation can never be easily predicted, and rarely does it operate along expected timelines. So while your business may not benefit from investing in a blockchain solution tomorrow, it may be forced to deploy one in the next couple of years if it wants to survive.
If you’d like to learn more about blockchain and potentially gain a clearer understanding of the underlying technology, please check out part one of our blog.
