can do many things that benefit the administration of health care services. Health care providers use these systems to track the clinical progress of patients; Insurers and government payors use integrated systems to more efficiently run complex payments and financing processes and individuals use personalized records systems to store and access their medical data history. Yes, modern day health IT can do all those tasks, but not without problems that include systems not being able to be interoperable and the growth in fraud waste and abuse in the system today.
Our team at Solve.Care believes there is a better way. Blockchain applications can deliver a cost efficient , cost effective method to deliver a truly seamless and interoperable health information technology system to deal with the documented failures of current systems that have not achieved the true promise of efficiency and ease of use for all stakeholders. We believe that the use of a decentralized and distributed ledger is the paradigm shift in health IT that can fundamentally address issues of centralized data systems and in combatting fraud and over utilization of services.
Blockchain technology applications have the potential to transform our current use of health information technology and the associated hardware and software infrastructure. The underlying technology and associated cryptocurrency with its decentralized architecture suggests a range of applications that can , we argue, bring cost savings and efficiencies versus traditional legacy systems currently in use in not only the public healthcare space but also in associated private market participants. We suggest that there are numerous applications that can be implemented in public programs in the U.S. health care system using Blockchain technology.
The fundamental promise of the Blockchain is the underlying information technology (IT) architecture and its ‘unbreakable’ chain of data entries that allow for secure and open transactions. The decentralized and distributed database of a Blockchain that contains data allows for an auditable and distributed ledger that allows all to see every transaction. The open source attributes of the Blockchain make the technology a natural fit for the requirements associated with the complexities of transaction laden systems associated with health information technology in the public and private sector.
We suggest that there are specific applications in public programs that include both the U.S. Medicaid and Medicare systems that could benefit from the deployment of Blockchain applications by replacing expensive hardware and software IT systems with a Blockchain infrastructure. The Medicaid program spent $553 Billion in Federal Fiscal Year 2016 with that amount predicted to grow at 5-8% or more per year. Administrative costs of the Medicaid program are estimated at 5-6% of total spend or nearly $30 Billion, which includes costs associated with health information technology deployment and maintenance. In addition, we argue that the potential cost savings would be significant versus current costs and ongoing system maintenance of existing legacy IT systems. Blockchain is relatively easier to program and to implement system wide changes in comparison to changes made to legacy IT systems.
The advantages of Blockchain are obvious, but with any new technology there are questions about efficacy and efficiency. We attempt to answer questions about the technology, issues of interoperability and specific applications related to the health care space and associated costs. We also address some of the privacy and data security concerns associated with health care that are inherent in any health IT system.
Technology Description and Application
The advent of Blockchain technology can trace its beginnings to creation of Bitcoin as a digital cryptocurrency. While the rise of digital only currencies in recent years has captured the attention of the financial industry, the public, and regulators it remains largely unknown to the general public. The technology that helped to launch Bitcoin or ‘Blockchain’ is of particular interest and potential use to a wide range of industries, including healthcare because of the open source and decentralized nature of the technology.
Blockchain has potential to improve healthcare in a number of innovative ways. Some of those examples include a master patient identifier (MPI), autonomous automatic adjudication and interoperability. MPI’s offer a single person identifier that can follow the patient in various situations, enabling a more seamless and scalable health delivery across the continuum of care providers (as well as possibly beyond healthcare where data would also of relevance).
Autonomous automatic adjudication would simplify and lead to significant efficiencies in how claims or other healthcare transactions are processed between parties. Essentially, Blockchain could lead to elimination of the third party thus creating a more efficient process. The process would use smart contracts across parties that would enable automatic adjudication of claims. Enhancing claim adjudication in health care has the benefit of reduction in the occurrence of claim fraud that is currently prevalent. All players in healthcare, from providers to payers, would benefit from this reduction in fraud.
Fraud detection and mitigation is increasingly becoming a policy issue for state Medicaid programs. Conservative estimates from the U.S. Government Accountability Office (GAO) estimates that fraud in the Medicaid program is over $14 Billion per year or 4% of program spend and expected to grow as program spending increases. Other research finds that Medicaid fraud could be as high as 15-22% of total spend as a result of over billing for services. These findings suggest that the deployment of a Blockchain application that utilizes a smart contract and verifiable ledger of all service and payment activities could reduce fraud and overpayment that is prevalent in the U.S. Medicaid system.
Blockchain could also improve interoperability across systems and organizations. This is crucial for progress in our current health ecosystem which consists of a plethora of disparate IT legacy systems that have been amassed over the years and that do not communicate well with each other. Blockchain would provide the ability to replace these disparate systems with a single system that offers interoperability. With the use of smart contracts and fully auditable history, Blockchain would enable peer-to-peer interoperability among participants within transactions. In addition to offering interoperability, Blockchain transactions would also have the advantage of being cryptographically and irrevocable thus ensuring privacy across parties. The patient would be able to designate by whom the data can be accessed (and at what level of access) by the use of keys that users would have access to (either private or public).
The benefit of Blockchain in healthcare would take place across the entire supply chain spectrum. Contractual agreements between payer and patient or provider and patient (or between provider and payer) would be implemented with the use of smart contracts within the Blockchain. Smart contracts lead to efficiencies as they enable a reduced number of intermediaries that exist today which lead to more streamlined transactions. These transactions would enable a more holistic view of the patient’s record for all parties involved and lead to an increase in transparency. Beyond contractual transactions, clinical transactions based on electronic health records would also occur on the Blockchain. This would enable clinicians to have access to different components of the patient’s data throughout the patient’s lifetime with an increase in transparency (this access would be controlled so that providers have access to data only on a need-to-go basis). Improvements in the supply chain from Blockchain would be extended to drug companies and manufacturers, as well as improvement to pharma clinical trials and longitudinal health research for the patient.
The federal government can also benefit from the improvement in Blockchain with more streamlined transactions in the supply chain. For instance, one of the issues facing Medicaid recipients is high churn due to changing economic qualifications. Blockchain can be helpful to maintain a recipient’s identity as they pivot between different government systems in a more seamless way. This would be especially valuable if account based plans from the private sector are implemented as an option for Medicaid recipients (with hope of reduction in costs and better outcomes). Other government programs would similarly benefit from a more streamlined delivery of care across all players within the supply chain, including with private prescription plans.
Overall, Blockchain applications have been surging in a number of different industries. According to Deloitte, 35 percent of health and life sciences companies surveyed plan to use Blockchain, and 28 percent of respondents plan to invest $5 million or more (10 percent plan $10 million or more). In finance, it is expected that savings from reduced intermediaries (and slow payment networks) has potential savings of $15-20 billion by year 2022. The industries implementing Blockchain are numerous and are led by real estate, supply chain and others. Within healthcare, a number of companies have begun implementations of Blockchain in various areas of applications-including Gem (in collaboration with Philips Healthcare Blockchain Lab), PokitDok, Healthcoin, HashedHealth and many others including Solve.Care. The Hyperledger Healthcare Working Group is a consortium that provides an open source collaboration of member companies in healthcare with the goal to speed the development of commercial adoption of Blockchain.
The applications of Blockchain technology are numerous as well the potential to transform legacy health information technology. We focus our discussion on public health information technology because of not only its impact on the U.S. healthcare system but also the complexities associated with integration and deployment that we believe deployment of Blockchain technology can have not only ease of development and maintenance but also cost savings versus current IT infrastructure.