Beyond Bitcoin: Five Possible Uses for Blockchain in Health Care | Deloitte US has been saved
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By Greg Reh, Vice Chairman, US and Global Life Sciences Leader, Deloitte Consulting LLP
When I bring up blockchain in client meetings, or in dinner conversations, people tend to have one of two reactions. Either they see it as being synonymous with bitcoin and other digital currencies, or they see blockchain as an overhyped technology.
I agree there is a lot of hype swirling around blockchain, and I also agree that this technology likely isn’t going to turn health care on its head. We might still be five or 10 years from realizing the potential of blockchain. But I do think it could help life sciences and health care organizations streamline and improve some of their processes.
What is blockchain? Where did it come from?
Blockchain is essentially a living list of linked digital records. Each transaction is verified and stored by each network participant based on a set of previously agreed-upon rules—and without a governing central authority. While information can be added, it can’t be copied or deleted. As a result, multiple groups—health plans, physicians, hospital systems, and even patients—can add to and share information through a secure system.
During a recent Dbriefs webcast, my colleague Ravi Kalakota equated blockchain to the pages of a book. Each page contains information about that book (e.g., the title, chapter headings, page numbers, author). Collectively, the text on these pages tell the story. In a blockchain, each block contains some of the same information and a digital fingerprint called hash of the data. The contents of each block reflects unique information about a transaction and is linked to the previous block. These links create the chain of blocks.
Although the concept of blockchain goes back to the 1950s, it wasn’t until 1991 that it was used with digital timestamps. In late 2008, Satoshi Nakamoto (the pseudonym for a person or group of people) released a white paper describing the concept of digital currency. In early 2009, Nakamoto released the first bitcoin software.1 This coincided with the financial crisis. But it wasn’t until 2014 that we started to look at other blockchain applications beyond cryptocurrency.
New kids on the block chain
Several industries, such as banking, are investing heavily in blockchain. A year ago, The Harvard Business Review predicted that blockchain would revolutionize banking in the same way the internet changed media.2 Many manufacturers are looking to link the technology to smart contracts that can be digitally verified and enforced. Some groups are even eyeing it for use in fantasy sports and dating apps.
While health care might be a step or two behind other sectors, there is interest. In a survey last fall, about 70 percent of health plan and health system IT executives said blockchain holds significant promise for health care interoperability.3 The Deloitte Center for Health Solutions came to a similar conclusion when our researchers examined the potential use of blockchain for health plans – outlining six use cases where this emerging technology could be applied by insurers to improve current standard operating procedures while enhancing the customer experience. More recently, in another crowdsourcing exercise, we discussed blockchain’s potential impact on hospitals and health systems in our hospital of the future research.
A challenge for health care stakeholders is to determine where to apply the technology. Rather than adopting blockchain and searching for an application, life sciences and health care organizations should identify a challenge first, and then think about how it might be solved in a transformative way. Here are five areas where blockchain might be useful in health care:
We might be moving beyond the hype of blockchain and into the reality of potential applications. What’s holding us back? There certainly is some fear in being a first mover. Tim Smith, who leads our health care provider technology practice, uses the first sale of a fax machine as an analogy. That technology wasn’t useful until others got on board. If health care stakeholders don’t fully adopt blockchain, the organizations that invest in it now might not see much of a return on investment. There is promise, but the technology also has limitations. Change takes time and transformations rarely follow a straight line.
3. Black Book Market Research. “Healthcare Blockchain Interest Heats Up: Black Book Survey,” Press Release, October 3, 2017, https://blackbookmarketresearch.newswire.com/news/healthcare-blockchain-interest-heats-up-black-book-survey-19973867, accessed October 9, 2017.
Greg is the Deloitte Global Life Sciences & Health Care Industry leader. In this role, he guides and advises the Life Sciences & Health Care leaders of Deloitte’s global member firm network. He has more than 25 years of experience working with multinational pharmaceutical, biotechnology, and chemical manufacturing organizations. In his role, Greg advises on the delivery of services and solutions for life sciences clients, practice operations, and the development of methods & research related to the transformation of life sciences companies. Throughout his career, he has served clients that include multinational pharmaceutical, biotechnology, and chemical manufacturing organizations.