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:

• Supply chains: Most biopharmaceutical companies are at least exploring ways that blockchain could be used to monitor and track products. Along with following the flow of products, other bits of information could be included, too. Certain biologics, for example, might need to be kept at a precise temperature. Sensors included in a shipment could transmit temperature data to the blockchain. The technology might be helpful in guarding against counterfeit or substandard products. Blockchain also could be used by biopharma manufacturers to capture and record interactions with regulators.
• Clinical trials: Using blockchain, companies can securely share data generated by clinical trials, such as patient demographics and information about adverse reactions. Interim results could be shared with sponsors and regulators. The technology also can help manage and track informed consent across multiple sites, systems, and protocols. Blockchain could be used to collect, build upon, and share patient data profiles across multiple trial sites—even virtual trial sites as they are developed. If applied to consent management, blockchain could give the patient control to grant access to other researchers who might access their data in the future.
• Provider directory management: Blockchain-based hospital and physician directories could leverage the technology’s decentralized consensus protocols to help enable providers and health plans to update listings more quickly. If a provider changes networks or if someone finds a mistake, they can initiate a correction, which can be automatically accepted or rejected by smart contracts, which would be governed by other information in the blockchain (e.g., a recently rejected claim).
• Patient records: Most people have access to just a sliver of their health history, but blockchain could help pull together a lifetime of transactions from multiple health systems, pharmacies, and health plans. This information could be processed into readable information for a patient’s own use, or converted into records that can be read by a variety of electronic medical records systems. Links to detailed information about procedures, encounters, diagnoses, claims, and prescriptions could be added over time, and access to this information could be managed by the patient or the patient’s designees.
• Insurance coverage, preauthorization, and claims adjudication: The ability to ensure that claims are accurate, and to spot fraudulent claims, is particularly important in Medicare and Medicaid where payments must be coordinated between payers, providers, the federal government, and banks. A smart contract could be used to show proof of adjudication. For example, the act of a patient checking in for a clinic visit, or logging into a virtual appointment online, could be confirmed by the health system’s financial or clinical systems. This transaction could be combined with others from the same clinic that day and uploaded to a blockchain that is accessible to the health plan. An employee at the health plan could see the completed transaction, and reimburse the health system accordingly. Claims review could be streamlined because encounter data would be accessible and easily verified on a blockchain. Health systems and physicians also could connect with health plans to determine information about a patient’s health coverage, or to verify patient demographics.

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.

Endnotes

1. https://bitcoin.org/bitcoin.pdf

2. https://hbr.org/2017/03/the-blockchain-will-do-to-banks-and-law-firms-what-the-internet-did-to-media?referral=03758&cm_vc=rr_item_page.top_right

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.

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