7 thoughts on the importance and future of blockchain in RCM
Blockchain is being put forward as a new means to potentially help solve interoperability challenges in healthcare.
Blockchain technology is a permanent log of online transactions or exchanges. It emerged in 2009 as the foundation for trading the digital currency bitcoin.
The entire log is duplicated across a network of computers. Users' interactions on the network can add to the record of transactions. Similar to a database, the blockchain transactions are recorded in a predictable way that contains a light amount of data and can be searched and audited. Unlike a database, which is centrally located and managed by a central authority, this log is shared and managed by the network itself. New transactions must be approved and verified by the network in a process called "consensus," a rule set that all the computers follow.
Each transaction is cryptographically linked to the transactions before it, creating a permanent chain of events. This technology is a record-keeping system for peer-to-peer networks, like shared accounting software.
Blockchain technology has been explored by financial incumbents since 2014 when Nasdaq announced a partnership with Chain, a blockchain company. Since then, the industry has expanded its use and investment into the technology, exploring applications across trade finance, commodities markets, private equity exchange, digital identity management and beyond.
The blockchain's record-keeping system can be applied to many types of data exchanges and has recently sparked new trends in insurance, supply chain management and healthcare.
In healthcare, blockchain offers a new means to interoperate because it allows a distributed network of users to share a historical record without a central party. It enables all the users of that network to account for verified health data across disparate systems and a complete history of interactions with that data.
Emily Vaughn, head of accounts at blockchain platform provider Gem, recently spoke with Becker's Hospital Review about the importance of blockchain in healthcare — specifically in revenue cycle management — and how this may affect the industry in 2017. Below are seven thoughts from Ms. Vaughn.
1. Blockchain technology by itself cannot solve inefficiencies in revenue cycle. Inefficiencies in the revenue cycle include often unavoidable complexity in accounts payable, regulation and business process management. There are some facets to the latency of reimbursement that are not purely technical but dictated by inertia and culture, says Ms. Vaughn. Blockchain technology is merely a new protocol that existing systems will sit on top of. The speed and transparency offered by this technology will eventually permeate application design and development, but in the near-term, the relationship between the shared network and the end-user application will be integrated versus wholly disrupted, she added.
2. In RCM, blockchains can support a peer-to-peer network for passing information on a claim at every stage of its lifecycle, according to Ms. Vaughn. In a centralized system, there is a constant cycle of data reconciliation that attempts to aggregate information in the center and push updates out to the edges, she says. But she notes this cannot be done in real-time, so there are windows in which the status of a claim is unknown by its counter parties. Using a distributed ledger to track changes to a claim enables all the identified stakeholders to act on that same information at the same time.
"There needs to be increased transparency into what the status of a claim is so companies can act on the most relevant, verified information available,” Ms. Vaughn says. "So if the parties expect this claim to go through more review because it's a complicated reimbursement, then they can act with full assurance on the status of the claim at any given point, knowing the other parties have the same information. It's really about having the right information about how to manage your revenue cycle based on where all of your claims are at any given time. "
3. Using a shared network for managing claims data also requires a level of abstraction that allows private information to stay private, while the status of the claim is known to the authorized stakeholders, according to Ms. Vaughn. "In a basic workflow, the provider creates a claim where they put in diagnosis and treatment codes and general information about the patient's visit that's relevant to the insurance policy," she says. "All of that data is critical data. It's identifiable to the patient and it's private information to the internal operations of the hospital, and yet the submission of that information to another party is needed for the claim process to kick-start."
If the healthcare provider is using blockchain to create a proof-of-existence of this record, then they should have access control so that only the right stakeholders have access to the right information at the right time, she added. This requires an additional layer of technology that connects private application data to the shared blockchain network, which can be achieved with a blockchain platform or application. However, once implemented, the blockchain enables access to privately held data by storing and relaying access control lists with customizable complexity.
4. The fundamental characteristic that makes blockchain networks valuable for data exchange is the introduction of network "integrity" to secure transactions. The individual transactions recorded on the blockchain have structural integrity due to the cryptography that links them. This makes it infeasible to manipulate the ledger. "Within a transaction, privately stored data can also be given an integrity check with a unique identifier called a 'hash,'" says Ms. Vaughn. "The hash of the claim file allows each party to verify that the underlying data, that is stored away from the blockchain, has not been tampered with since it was verified and recorded." She says because the data and network's integrity can be audited by any user, this removes the need for a central party to perform this function, and it provides a new framework for how to assess the validity of information.
Today, trusted third parties provide this service, which means companies have to trust another company to secure data exchange, according to Ms. Vaughn. "We can use this to create new systems of accountability," she adds, "in which every interaction is recorded, in which critical data is given a fingerprint that everyone can verify."
5. A distributed event log and data registry with robust access controls can support a whole new class of application.Because the underlying network has structural integrity, it can safely support applications. Data-driven processes can run on top of a blockchain network, such as monitors that look for real-time fraudulent patterns reduce fraud or automation schemas that streamline adjudication logic, says Ms. Vaughn.
"These processes have been difficult to streamline before because data has to pass through the eye of the needle before it can be made insightful. By relaying industry wide transaction data, we take insights from a global view of the network in a more intuitive fashion," she added. To get there, the blockchain networks would have to operating in a production environment, with many different companies using the network, which will take time, she adds.
6. In 2016, Ms. Vaughn says organizations were just beginning to look at the blockchain space and where and why they should apply the technology. It was a year for discovery, with many newcomers to the technology. With the financial industry giving credibility to the technology, healthcare companies have been able to move more quickly to find the right partners and anchor development.
Moving forward into 2017, Ms. Vaughn expects many large organizations to attempt to quantify the business impact of blockchain technology in healthcare. This includes studies on how much money is being wasted in the revenue cycle. Organizations will be challenged to fully audit their revenue cycle to identify and quantify its inefficiencies. "This will be good for the industry," says Ms. Vaughn, "because blockchain technology is often thought of being a solution in search of a problem. Once companies understand how this technology works, they can begin to address parts of their business weakened by the absence of this infrastructure. I think it will inspire more interest in this topic."
7. Still, she doesn't anticipate there will be widespread adoption of blockchain-based payment architecture in healthcare anytime soon. For RCM, the primary application of the technology is around how data is captured and shared at a system level to reduce friction and improve transparency. "We're definitely in a period of invention and iteration which is exciting, but it's not going to be impacting physicians' daily lives too soon," Ms. Vaughn says.
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