Blockchain technology is poised to disrupt the healthcare industry, bringing opportunities for payers and providers to simplify processes, reduce operating costs and improve patient care. In a recent Cognizant survey
of healthcare industry professionals across the U.S. and Europe, nearly half of respondents believe blockchain is critical or important for their organizations and the industry. Over the next three to five years, blockchain will have the biggest impact on provider data and identity management, patient record portability and sharing, and drug provenance.
Provider data and identity management
Verifying the identity and credentials of licensed providers is core to the healthcare delivery system. However, maintaining accurate, up-to-date provider data is onerous, expensive and prone to error. Currently, all payers and providers maintain this data individually, each bearing the full cost of managing redundant data. However, blockchain can provide an immutable, distributed database of provider credentials accessible to payers and providers industry wide.
Blockchain uses secure, encrypted authentication mechanisms to validate information from primary sources and include it in a distributed leger, ensuring a shared source of truth for validating healthcare provider information. A credentialing blockchain would eliminate duplicate requests for information from original sources – including physicians, educational institutions, training and credentialing organizations and state licensing boards – reducing the time it takes to assemble information from weeks or months to minutes and enabling real-time updating of records. This will relieve the burden on healthcare providers, minimize risk, and reduce administrative costs, enabling providers to focus on improving quality of care.
Patient record-sharing and portability
Blockchain offers the ability to share patient records across payers and providers industry wide, enabling much-needed interoperability, reducing costs and mitigating risks. Using blockchain, patient data such as insurance information, demographics and medical history would be securely transferable and available to any treating physician, health system or payer that is part of the blockchain network. When a patient is referred to another physician, appointment check-in can be as simple as providing an encrypted blockchain key that allows the physician access to pertinent medical and insurance information.
As patients change health insurance providers and choose physicians across various health providers, blockchain reduces the need for multiple data entry. Instead, original source data is submitted to the blockchain and validated, creating a single source of patient data, reducing staff time, improving security and eliminating errors. Interoperability among physicians and health systems will reduce duplicative testing and treatment and mitigate the risks associated with incomplete medical data such as potential drug interactions.
Drug provenance
Supply chain provenance for pharmaceuticals is a good use case example. Drug provenance is critical to establishing authenticity and ensuring quick remediation in the event of impurity or tampering of drugs. For example, one application is blockchain’s ability to trace ingredients back to the source in the event an impure ingredient is discovered in a drug batch, so the problem can be fixed at that specific point in the supply chain.
In addition, blockchain validates the provenance and authenticity of a drug shipment at each step of the distribution process, identifying drugs that are counterfeit or stolen and preventing them from being administered to patients. Given the time and expense associated with drug discovery, development and approval, pharmaceutical companies are highly sensitive about their intellectual property. However, some permission-based blockchains can enable sharing of drug-related information without concern of giving away proprietary data.
Strategic considerations
Blockchain is far more than a technology implementation. It will fundamentally transform every aspect of operations and business strategy, making it critical that initiatives be driven by cross-functional teams and business stakeholders who understand its short and long-term implications and can ensure blockchain projects align with strategy.
There are many promising use cases for blockchain such as enabling interoperability and patient-centric medical records, reducing redundant operational processes for the same patient across providers, and reducing interparty disagreements around processes such as tracking pharmaceuticals or managing claims and reimbursements. Many of these use cases leverage a critical application of blockchain, the smart contract. A smart contract is application code distributed across a blockchain network that is self-executing and can be applied to healthcare, for example, by ensuring claims and reimbursements are executed to contract between payers and providers. This prevents discrepancies that delay payments and create friction among payers, providers and patients.
Many payers and providers are beginning to explore blockchain’s potential by piloting small blockchain-based projects. However, healthcare’s information sharing is massive and complex. Transforming legacy systems to a completely new, decentralized architecture like blockchain is a huge undertaking and requires networks to function. Developing the critical mass of participants for those networks takes time and collaboration across the value chain, which requires organizations to work in new ways with industry participants, including competitors. This necessitates a significant culture change. Therefore, engaging in blockchain pilots with external participants can provide insights into how to manage the obstacles inherent in collaborating with external organizations.
Finally, while it is important to move forward with blockchain, it is equally important to ensure that blockchain projects have real-world application and near-term potential such as the use cases discussed earlier. While blockchain presents significant challenges, we believe its impact will be far reaching, and organizations that proactively pursue blockchain will be positioned to leverage it as the infrastructure evolves.