How Blockchain Could Revolutionize the Healthcare Industry

In our last blog we discussed potential use cases for blockchain in B2B, B2C and government services, focusing on how blockchain can make business processes more agile, secure and cost efficient. In this blog we’ll focus on healthcare specifically as blockchain could have an even more transformative impact in healthcare than the financial services industry. The healthcare landscape is currently defined by fragmented systems and limited data visibility across different stakeholders — resulting in massive inefficiencies. By enabling multiple parties to share data and perform automated inter-organization processes in a distributed, transparent and immutable fashion, blockchain technology has unique advantages that make it ideal for applications in healthcare.

Blockchain for healthcare claim processing

Enabling a Single, Accurate Source of Provider Data

Providers are a part of one or more payer networks. A member registered with a payer can receive services from any provider that is a part of the payer network. That sounds straightforward enough, but what happens when things change — say, a provider relocates, changes hours of operation or moves into or out of the payer’s network? Any of these changes would need to be accurately logged into the payer network so that members receive accurate information and don’t avail the services of providers outside of the network. Today, like the know your customer (KYC) process carried out by banks, payers reach out to providers annually to verify their information. This is pure cost to the payer. Worse, whenever information changes, multiple siloed systems must be updated with the same data — and if a provider is a part of multiple payer networks, then this same exercise must be performed by all payers. Until provider data has been accurately updated, all related claim processing must be done manually — adding to costs and increasing overall cycle time. This is part of the reason why something like 40% of payer’s provider data contains errors or missing information.

In contrast, imagine that a blockchain network could be created with payers, providers and members as stakeholders and all siloed systems unified through the network. Since all the provider data would be stored on this network, any update to the provider data would only have to be done once — and the update would propagate to all the systems of all the payers. Such a network could also save members from seeking services from providers that are not part of the network.

Dispute-Free Claims Adjudication Process

Claims adjudication — the process in which a payer receives a member’s medical bills, and claims are accepted or rejected based on the member’s policy — is ripe for blockchain innovation. Currently, this process is manual, and many disputes arise from rejected claims. But blockchain could facilitate the entire process using “smart contracts” — programs that reside on the blockchain network and allow for automation across organizations. Insurance policies would be captured in these smart contracts, and therefore visible to and agreed upon by all stakeholders. In addition, bills generated could be automatically verified against policies by smart contracts, reducing the overall cycle time while lowering costs and eliminating disputes.

Blockchain for Fraud Prevention

In 2014, the federal government recovered $5.7B in healthcare fraud cases. While these cases stem from a range of different sources, from incorrect billing to corruption and false claims, what they have in common is that they were made possible by the opaqueness of data across organizations. Getting prescriptions, bills of medicines and medical treatment onto a blockchain network — and making all this information visible to members, payers, providers and pharmacies — would significantly curtail the scope of healthcare fraud. Here, the immutability of the blockchain network presents an important advantage, because it would be impossible to tamper with data already present on the network.

Blockchain could also be used to better protect members’ sensitive healthcare data by creating a system in which members grant permission to individuals or organizations to access their data. No system like this currently exists, in part because, before blockchain, the idea that data could be securely co-owned by multiple parties who did not trust each other was inconceivable.  It bears pointing out that healthcare is more prone to data breaches than other industries, and a  2015 study found that roughly 90% of the most significant healthcare data breaches had centralized authentication mechanisms as their root cause. But blockchain networks, because they incorporate a distributed authentication mechanism and do not have a single point of failure, are safeguarded against such attacks.

Of course, these examples are just scratching the surface. Secure, predictive models could be applied to members’ medical data to support proactive treatments with reduced costs and higher quality service. Analytics — for instance, to enable dynamic premium prices depending on member records — could also be incorporated. And extending blockchain to drug supply chains will help detect fake drugs earlier and prevent them from entering into circulation; prescription drugs could also be more precisely tracked and monitored this way. The possibilities are immense — and all of them point to faster processes, lowered costs, safer products and improved experiences for members. A win-win situation for all!

The Blockchain Adoption Curve in Healthcare

Clearly there are many areas where blockchain can improve healthcare processes, so where will the industry begin taking advantage of the benefits of blockchain? The following is a potential adoption curve followed by some middle ground areas.

Early adoption areas (areas where payers are required to fully disclose details to the public)

  • Provider network details: Provider directories must be printed out and maintained accurately, which poses major problems, particularly in Medicare Advantage (MA) plans — as evidenced by the massive fines that have been levied against several MA plans in recent years.
  • Benefits/coverage: Each payer must make thousands of permutations of policies and benefit structures publicly available for providers and members to navigate. Ongoing changes, which sometimes occur mid-year, further complicate matters.
  • Medical policy: Medical policy, which often varies with geography and local regulations, must be publicly available — a significant challenge for most plans currently.
  • Authorizations: At the intersection of benefits and medical policy, authorizations are perhaps the single-largest source of confusion for members/providers, resulting in denied claims, late payments, appeals and grievances. Payers need to be clear on how medical policy applies to benefits to cover specific treatments.

Late adoption areas

  • Provider reimbursements/payments and related information: While this area is ripe for innovation, the reluctance of payers to share details related to provider contracts makes early adoption of a blockchain solution unlikely.
  • Protected Health information (PHI) and Personally identifiable information (PII): The number of different stakeholders involved, combined with potential risks, make this another late adoption area.

Middle ground

  • Claims clearinghouses: A blockchain solution would address issues related to the status and disposition of claims.
  • Provider scheduling: A blockchain solution for scheduling visibility is simply the logical extension of a blockchain solution for provider network details.

 

Conduent is a leading provider of healthcare solutions that remove obstacles to data and improve the efficiency of processes. Our services touch two out of three insured patients in the U.S., so we’re excited to be exploring all the different ways that blockchain technology can transform healthcare.

 

Conduent Labs

Conduent Labs, located in the United States and India, focus on leveraging technology advancements in areas such as computer vision, data and predictive analytics, process analytics and optimization, as well as machine and deep learning. We also have established practices in automation, mobility, and analytics and hold over 300 patents, with another 400 patents pending. Conduent has also established a blockchain practice.

14 thoughts on “How Blockchain Could Revolutionize the Healthcare Industry

  1. Ruben J. Sanchez January 29, 2018 - Reply

    How to invest in block chain health startups?

  2. Aniruddh Rao January 30, 2018 - Reply

    Very well written article. Well explored usecases. I liked the 1st usecase which is based on distributed nature only. Assuming the article is for general tech crowd, a line of info on what providers, payers mean in healthcare would have helped.

    • Krupa Bathia February 1, 2018 - Reply

      Thank you, Aniruddh. The terminologies were in terms of the U.S Healthcare system, and a provider is the healthcare service provider which are generally hospitals and the payer is the insurance provider.

  3. Shobhit Jain January 30, 2018 - Reply

    Very informative article. Thank you. I would like to part of Conduent Blockchain practice.

  4. Good Article. Block chain cloud is really a good idea for health care industry.

    Thanks for the article to enhance knowledge.

  5. Ron Clarke January 30, 2018 - Reply

    I see the single source, but I don’t get what blockchain has to do with “accurate” or “dispute-free”. Blockchain provides an auditable central repository, but does not prevent “bad” data or disagreements on meaning of contract language. Just because someone translates contract language into code (“smart contracts”) does not make it indisputable. Likewise a data provider who submits inaccurate or fraudulent data is not prevented from doing so.
    Great article otherwise.

    • Krupa Bathia February 1, 2018 - Reply

      A very valid point made Ron. Agreed, that all types of disputes cannot be solved via the blockchain network but what can be solved are the disputes that arise due to inconsistencies of data which may be due to multiple versions of truth or human errors or simply because of lack of awareness of the contract clauses. Having a single source of truth, which will be visible to all stakeholders eliminates disputes arising due to that. And regarding accuracy of data, because the data can now be co-owned by the stakeholders, we can put in checks to eliminate manual errors and/or put in system where in data which is accepted by the stakeholders go into the system, thereby not only putting multiple levels of check but also in turn eliminating the disputes arising because of that. Thank you, for the appreciation

  6. ravi gangavaram January 30, 2018 - Reply

    Author makes great points on outlining current inefficiencies in healthcare technology industry. However, more thoughts on how blockchain technology – distributed trusted central repository – would help eliminate these inefficiencies, would have been nice. Especially in light of centralized health exchanges, EMR adoption of providers etc and technology investments in this space for past few years failed to address those inefficiencies totally and also cost benefits not recognized. As much as new block technology sound promising, adoption challenges should equally be weighted with this promise on the business cases. Also , even with this block chain technology adoption, it may still fail to address the privacy and security issues. I guess, the packaging of “Block Chain” drug should carry a label “Use With Caution”.

  7. Krupa Bathia February 1, 2018 - Reply

    Thank you Ravi. This was a bird’s eye view of the whole ecosystem and how blockchain can play a role. But your suggestion of incorporating more details is appreciated and we might try to cover that in our next blog.

  8. Siddhartha Sharad February 3, 2018 - Reply

    Very well written article. I am wondering how a block chain driven ecosystem and operating model would look like. Who would the various players be, what aspects of block chain will be managed in a centralized vs. decentralized fashion, and the ownership aspects. Would love to get some thoughts from the team on this aspect.

  9. Great article, thought provoking material and definitely needed in the health care space. Outside of the technical issue, the PI, PHI and HIPPA related issues may prevent parties from trusting the technology. As we develop the solution, we need to include a roadmap for data owners/contributors to effectively deal with privacy concerns. I look forward to helping move this forward.

  10. Dhanik Lal Sahni February 7, 2018 - Reply

    Very good information of Blockchain in Health Industry. It will help securing patient information and till the date no data is hacked from this platform.

    Many other industry started on this technology like Banks, Payment System, Online Music industry.

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