A Game Changer? Potential Blockchain Applications in Health Care

Following the success of cryptocurrencies such as Bitcoin, healthcare organizations are exploring how the blockchain technology behind those platforms could help solve some of the industry’s most vexing problems.

Health plans and provider organizations should expect to hear much more about blockchain technology in the coming years—for proof, they just need to follow the money. 

During the past three years, approximately 160 companies have raised more than $660 million for healthcare-related blockchain projects, according to Noah Zimmerman, PhD (pictured at right), director of the newly launched Center for Biomedical Blockchain Research at the Icahn School of Medicine at Mount Sinai. Zimmerman and his team, which is split between Redwood City, Calif., and New York City and is part of Mount Sinai’s Institute for Next Generation Healthcare, have been tracking these projects as part of the center’s growing public database of blockchain initiatives in health care.

A blockchain has been described by BlockchainHub as a “spreadsheet in the sky.” In a blockchain, everything in that spreadsheet is permanently shared with members of a collaborative network. But what intrigues experts like Zimmerman is more than just the nuts and bolts of the technology.

“Blockchain, at its core, is about building large-scale open networks and incentivizing people to participate in them,” Zimmerman says, pointing to Bitcoin as an example. In the case of that cryptocurrency, a group of strangers came together, created rules that rewarded certain behaviors, and developed a vast supercomputer to support their transactions. 

“Fundamentally, we think about blockchain as a technology that can support changes in human behavior, rather than a particular technology like a database or electronic health record,” he says. For Zimmerman and his team, one key question is how the industry might harness such an incentive-based system to promote better health.

Zimmerman compares the state of blockchain today to the Internet’s early days, when technology companies were focused on building the infrastructure and core protocols to support it. “We’re several years out from seeing consumer- or business-facing applications that people actually find usable,” he says. Yet down the road, blockchain could have applications for payment and claims adjudication, a use case that Mount Sinai is exploring with one of its partners. 

Assessing Clinical and Financial Applications

One of the most notable properties of a blockchain is its immutability. As the name suggests, a blockchain is composed of linked transactions that are permanently recorded and cannot be altered, giving it potential applications for data security. “This can help prevent fraud because what is put on the blockchain can never be changed or removed, which makes it very hard to falsify data,” says Simon Lin, MD (pictured at right), chief research information officer at Nationwide Children’s Hospital in Columbus, Ohio.

The key features of a blockchain also include protocols called “smart contracts,” which automatically execute a task whenever certain conditions are met. This functionality could have applications for improving claims processing and speeding up payment from government and commercial payers, Lin says. “A blockchain would speed up claims processing by cutting the middleman and making preauthorization and reimbursement occur in near real time,” he says.

He also speculates that blockchain technology could help support value-based care models, which often require coordination among providers along the care continuum. By using a blockchain, providers may be able to ensure greater accuracy and integrity of outcomes data that are shared across an integrated care network and that ultimately affect the network’s performance and payment. “As the name ‘blockchain’ suggests, this technology is very good at dealing with chain-of-custody problems,” Lin says.

Lin thinks blockchain technology also has clinical applications, including facilitating the sharing of electronic health records (EHRs) among providers and addressing patient safety and supply chain issues, such as drug recalls. For example, a blockchain could help track ingredients in a pharmaceutical product as they travel from supplier to manufacturer to distributor to provider and patient. Then, using a special app, patients could scan a drug label with their phone and know if their medication was subject to a recall, Lin suggests.

Collaborating to Find Better Solutions

Health plans, too, see potential value in tapping blockchain technology to solve pressing challenges, including the need to improve the consumer experience. Giving patients greater access and control over their health information is one step. “Today, data is not portable or accessible for patients and providers, and blockchain technologies can help with that,” says Kyle Culver (pictured at right), lead enterprise architect at Humana in Louisville, Ky. He believes the technology will help “democratize” data and facilitate greater transparency and trust among stakeholders.

Blockchain also could promote greater collaborations among healthcare companies. Humana is working with UnitedHealthcare, Optum, Quest Diagnostics, and Multiplan in a blockchain pilot as part of the Synaptic Health Alliance. In the pilot, alliance members are exploring how blockchain technology could enable “crowdsourcing” of provider directory data so directories could be built with greater accuracy and at a lower cost. Culver says the pilot has reinforced that such collaborative projects require governance and stakeholder incentives—not just technology—to succeed.

Blue Cross Blue Shield Association, headquartered in Chicago, also is exploring potential uses for blockchain through several Blues plans. In this early phase, the plans may examine how the technology could improve processes like preauthorization and physician credentialing, among other use cases, says Shahzad Shah (pictured at right), executive director and chief enterprise architect.

As Shah and his team prepare to create a blockchain lab in which to test the potential uses, one of their challenges will be selecting the right technology. “The technology standards on which blockchain is built are changing quickly, and these standards may differ by the domain of a given use case,” he says. 

Another hurdle will be overcoming industry unease with data sharing. “Payers, providers, pharmaceutical companies, and other healthcare organizations don’t want to reveal proprietary business information,” Shah says. 

Blockchain supports secure and trustworthy processes and data exchanges that extend across departmental and organizational boundaries. But capitalizing on that potential requires first planning for collaboration among all parties that may eventually participate in using blockchain technology together, Shah says.

Participants must agree on business processes that would be opened up across organizational boundaries, along with selecting process stages, business rules, and permitted visibility of data. Any unease may soften with greater appreciation of how blockchain technology works. 

“Organizations need to understand what collaboration means in a blockchain consortium—it means consensual sharing of specific data and transacting on different aspects of a business process underpinned by blocks of data that they were not privy to before,” Shah says.

Lessons Learned

Experts offer the following suggestions to healthcare leaders who are considering engaging in blockchain use.

Get educated and involved. “Blockchain technologies are inherently collaborative, and thought leaders in this space are looking to discuss ideas, build networks, and learn together,” Culver says. 

Prepare for a successful collaboration. Before these projects can get off the ground, Shah says, leaders need to consider key governance questions such as: What information will be shared? Who has access? How will it be protected? He also suggests that members of a blockchain consortium develop a charter that defines their mission and measurable objectives.

Set aside capital for blockchain pilots. The Research Institute at Nationwide Children’s Hospital allocates a portion of its budget to test emerging technologies, Lin says.

Seek outside expertise. When working with vendors, healthcare organizations need to clearly articulate the specific problems they are hoping to solve with blockchain technology, Zimmerman says. To get to know some vendors in the space, he suggests hosting a challenge and inviting a few companies in for a fixed amount of time to build a proof-of-concept that addresses a problem.

Keeping Expectations in Check

Although many experts are cautiously optimistic about the possibilities of blockchain technology, they are also keenly aware of its current limitations—namely the immaturity of the technology itself and the need for scalability.

Zimmerman points to a recent incident when transactions for a popular game called CryptoKitties (in which players collect and breed digital cats) slowed down traffic on the network of Ethereum, a cryptocurrency. “If CryptoKitties is going to have a dramatic effect on the second-largest blockchain, we probably don’t want our insurance claims systems on there quite yet,” he says.

Leaders also recognize that the friction points in health care are not going to be solved by technical innovations alone. What matters just as much is adoption, which Culver believes can be driven with the right incentives, governance, and business model. If widely adopted, blockchain could be an important tool to drive better partnerships and value across the industry, he says. “Blockchain technologies provide some enabling capabilities that hopefully spark additional industry collaboration to improve experience, integrate care delivery, and decrease cost.”

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Laura Ramos Hegwer is a freelance writer and editor based in Lake Bluff, Ill.

Interviewed for this article: Kyle Culver, lead enterprise architect, Humana, Louisville, Ky.; Simon Lin, MD, chief research information officer, Nationwide Children’s Hospital, Columbus, Ohio; Shahzad Shah, executive director and chief enterprise architect, Blue Cross Blue Shield Association, Chicago; Noah Zimmerman, director, Center for Biomedical Blockchain Research at the Institute for Next Generation Healthcare at the Icahn School of Medicine at Mount Sinai, Redwood City, Calif., and New York City.