Blockchain, the technology behind bitcoin, has a surprising degree of relevance for healthcare. It has already found real-world applications (and potential ROI) in reducing the time it takes to credential physicians and underpins an emerging decentralized marketplace for the exchange of digital services and currency. It is also driving collaboration and creative problem-solving around some of the industry’s most vexing cost and quality problems, and ongoing shift toward more patient-centered, outcomes-oriented care. In this series of stories, Clinical Informatics News writer Deborah Borfitz looks into emerging use cases for blockchain in health care and clinical trials, and speaks with some of the companies breaking new ground. --AP

By Deborah Borfitz

May 8, 2018 | As blockchain visionaries see it, value chains of the future will have an entirely new infrastructure and change the nature of transactions involving “assets”—ranging from claims funneling into a revenue cycle to patients moving through an episode of care—by removing the need for an intermediary that sets the rules and extracts a fee. What happens to data and between transacting parties will be inherently trustworthy because there will be a permanent, time-stamped, and tamper-resistant record of it on a shared ledger. If this technology is properly leveraged, individual consumers as well as society stand to benefit, says John Bass, founder and CEO of Nashville, Tennessee-based Hashed Health, a healthcare blockchain company.

Left unchecked, U.S. healthcare spending is expected to reach nearly 20% of GDP by 2025, as estimated by the Centers for Medicare & Medicaid Services. That trend is potentially reversible as blockchain converges with artificial intelligence (AI), machine learning and the Internet of Things to build new types of actors and economies for value-based care, Bass says.

Using blockchain, Bass and his team are attempting to solve old problems in new ways. A shared ledger opens the possibility of building healthcare applications on top of a market-level data structure rather than bolting them onto siloed relational databases focused on one company, explains Bass. Issues around trust, transparency, and alignment of incentives can be solved with technical protocols, provided they are properly matched to business problems.

To be meaningful, a blockchain-enabled application also requires a network of people to collaborate around a good use case and agree about their relationship with one another. The business model innovation work is admittedly difficult, what Bass likens to “a 3-D chess match.”

Hashed Health is currently advancing business-to-business initiatives with organizations that include the State of Illinois, Centers for Disease Control and Prevention, Altarum Institute (Ann Arbor, Michigan), Change Healthcare (Nashville), and multiple hospital systems and payers. Its first product, Professional Credentials Exchange (ProCredEx), is scheduled to hit the market in 2018 to reduce the time and cost of verifying practitioner identity and credentialing information.

“It takes an average of four to six months to credential a new physician to work in a health plan or hospital, and the average revenue per day lost during that time is $7,500,” says Bass. “It’s a good use case because the data itself is not very sensitive, and we’ve come up with a business model that doesn’t threaten any of the incumbents.”

ProCredEx simply provides a way for buyers to verify physician-submitted information—e.g., state licensure, medical school and residency training, and malpractice claims—faster and cheaper than manually searching out primary sources. Early proof-of-concept versions of ProCredEx have been built for the State of Illinois (around interstate licensure portability) and two payers (around provider directories). “Our strategy is to create an ecosystem of digital health businesses that have a synergistic relationship with ProCredEx,” says Bass.

Next to market for Hashed Health will be Bramble, which converts health services to digital health assets using smart contracts. It’s based on the decentralized, fraud-proof Ethereum blockchain protocol. Credentialed providers can create a “tokenized” healthcare service that includes a description of the service, such as a CT scan or knee replacement, plus its terms and conditions and price, and list it on the exchange. Buyers, potentially self-insured employers, could browse the listed assets for the best deals—for example, 30 CT scans at a steep discount by paying cash up front. The entire revenue cycle is bypassed, saving sellers what they’re currently spending ($3 out of every $10) getting the money they’re owed from buyers, notes Bass. Any of the tokenized services that go unused could be sold on the open market.

The model allows providers to get innovative with the types of services they bundle together, as well as aggregation of demand, Bass continues. For example, a group of 20, low-risk spine surgery patients in Nashville might collectively promise to follow a certain protocol and go home immediately after surgery. In exchange for being the “perfect patient,” they might shave 25% off the standard price for back surgery.

Other areas of investigation include using blockchain to bring together wellness initiatives and social networks, and to solve multiple problems around clinical trials (e.g., too many study failures, time and money spent getting drugs to market, administrative burdens of multi-site research, patient engagement challenges) and reimbursement struggles of approved but expensive drugs. “The first easy use case may be something like e-consent,” says Bass.

In February, Hashed Health teamed up with ODH, Inc., a Princeton, New Jersey-based health technology company, to explore the impact of evidence-based practices on patient care and outcomes. The aim here is to apply distributed ledger technology to close gaps in care before they occur. This will involve financially incentivizing payers, providers, and patients to act in prescribed ways to measure the results, according to Adam Johnson, vice president of technology, product development and operations for ODH, which will be spearheading a loosely connected, value-based working group that will tackle this use case.

The proof of concept is being solidified, but here’s the idea: ODH will post its gaps-in-care insights onto the blockchain with a timestamp. The system notifies payers (for their covered lives), providers (for patients in their panel) and patients (regarding themselves) of any open gaps and encourage them to take action. It also captures actions taken, by whom and when, and any related incentive. Hashes, unique strings of 256 characters, are generated for every action taken and incentive earned so that no one can nefariously alter the original data. Participants eventually “cash in” on the incentives earned. Providers might receive additional payments from payers, for instance, and patients may be rewarded with reduced premiums or gym membership discounts. “When the network of payers, providers and patients becomes big enough to sustain it, the incentives may be converted into tokens that will be used for exchanging products and services between all of the players in the ecosystem,” says Johnson.

Multiple other potential use cases exist, Bass notes. For example, hospitals, manufacturers, distributors and group purchasing organizations might create a shared, immutable ledger of debits and credits for supplies in lieu of monitoring those same transactions from separate spreadsheets. “The challenge is that this is a new way of doing business, and healthcare tends to be resistant to change. Collaboration doesn’t come naturally. We’re stuck in the 1980s-era pipeline business where there are companies in the middle who control the on and off valves… and making money off the mess via administrative fees and rebates.”

Although it is likely to take considerably longer, Bass adds, blockchain might one day enable patients to open and close the door to their medical record via a QR code on their cell phone as they move from one care provider to the next. That should be a far more pleasant experience than trying to remember passwords to multiple patient portals.