Blockchain: the missing piece in healthcare’s digital transformation journey?
Posted 1st May 2019 by Joshua Sewell
Blockchain technology is still in its nascency in the healthcare industry. At Frost & Sullivan, we do research and consulting for leading pharmaceutical and diagnostic companies, and the digital solution vendors that are providing Blockchain solutions to end-users.
We are tracking this market end-to-end and delving into use-case studies, which are interesting to many clients because they want to identify their potential return on investment when it comes to the adoption of Blockchain.
To understand the role of Blockchain in the healthcare industry, it helps to identify the biggest shift that we are currently experiencing: the digital decentralization of care delivery models.
This has resulted in five core areas of strategic priority for the majority of industry participants, as they seek to find the trade-off between risk and reward when going digital. Blockchain is a timely solution to mitigate the following five areas of need.
The five core areas of strategic priority
1. Healthcare data interoperability
One of the biggest issues that we are seeing is health data interoperability. Based on an industry estimate, current centralized IT systems for health data exchange cost about 150,000 lives and close to $18.6 billion every year globally. This makes interoperability gaps a strategic priority for the overall healthcare industry.
2. Value-based models
We’re seeing a surge when it comes to healthcare budgets and the emergence of value-based reimbursement arrangements which is shifting the healthcare industry from volume to value-based models.
However, inconsistent health outcome reporting and the inefficiencies in claim adjudication, insurance notarization, or medical billing frauds are creating critical bottlenecks and leakages in the system, preventing the adoption of a value-based model.
3. Health data ownership and consumerism
We are seeing the digitization of products, services, and commerce models that are democratizing these healthcare systems and manifesting a new era of healthcare consumerism. Blockchain is going to empower healthcare consumers whilst simultaneously complementing digital health business or monetization models.
4. Cybersecurity
The core properties of Blockchain systems make them ideal to minimize the ever-increasing cases of cybersecurity threats which are increasingly costing healthcare systems, hospitals and providers enormous amounts of money.
The distributed network and the cryptography techniques provide an additional layer of trust which minimize these cybersecurity threats for healthcare IT systems, and we’ve been seeing huge impetus of the adoption of Blockchain to tackle these cybersecurity threats.
5. Personalized health
We are seeing the healthcare industry transition from a one-size-fits-all treatment model towards stratified and outcome-based targeted therapy and personalized care delivery model. Blockchain and other emerging DLTs promise to provide a secure infrastructure for the seamless health data exchange without needing the involvement of a trusted third party.
Future applications of Blockchain solutions
Then when it comes to the adoption of Blockchain solutions it is helpful to break it down into what we might see in the near, midterm, and the long-term future.
Near future: In the next 2-3 years, we would expect to see the following four key applications of Blockchain. Firstly, significant adoption of Blockchain when it comes to national health and medical records. Secondly, in claims adjudication, RCM, and billing management. Thirdly, we’re going to see significant adoption in drug supply chain and smart contracts (the technology is already being leveraged significantly when it comes to the drug supply chain). And lastly, it will be used to digitally identify, verify, and also manage data.
Midterm future: Looking slightly further ahead to the next 3-5 years, I would be looking for areas of application such as clinical trials, records, and e-consenting; the internet of medical things (e.g. medical devices and patient-generated data exchange); and areas such as Health Tokens (e.g. HSN, research, and wellness incentives).
Longterm future: Beyond the 5-year mark, we’d expect to see Blockchain significantly transform healthcare when it comes to universal health records and identities, and also in the regulatory audit trails and adverse event safety monitoring.
With so many potential solutions that this disruptive technology can provide, it is essential for stakeholders to be able to differentiate hype from reality. It’s important to look at it from the user’s perspective. To enable this, I suggest an approach which considers what I call the 4 Ps. I will go into this further in my next blog post.
Unmesh Lal is Program Manager in Transformational Health at Frost & Sullivan. He will be presenting and leading a roundtable discussion at CybSec and Blockchain Health.
CybSec and Blockchain Health offers the opportunity to explore the tools necessary to calculate the opportunities and challenges of blockchain within multiple areas of the industry. Take a look at the agenda.
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