Blockchain, Data Economics,
and Healthcare
How does blockchain change the current economics of data systems?
By Tony Little
The introduction of emerging technology is often fraught with authorship peril. A dispassionate presenter comes across as boring, the pessimistic writer leaves the audience overly skeptical, and the evangelist seems too confident to believe. I hope that what you read below gives you, the reader, a balanced view of this new technology that has been coined “blockchain.”
There are thousands of “What is a blockchain?” articles and videos on the internet; the more interesting question to me, and the one that may be most relevant to a healthcare revenue cycle audience is, “How does blockchain change the current economics of data systems?” Let’s first look at the current state.
It is 2018; almost every human process in healthcare has been “techified.” We dutifully look for ways to make process output higher quality at lower cost, work with vendors (or build and become vendors), scope projects, implement, and collect government incentive money (directly or indirectly), and another database locks away data somewhere. Everyone has their own islands, with permissions, pushes, and pulls—expensive to manage, and there is a toll for every record requested. Most of those reading this see it every day. Welcome to the archipelagos of data that make up today’s healthcare system.
If the data friction in healthcare were replicated in almost any other marketplace, the cost of transacting would be too high and the market would fall apart. Case in point, count the number of independent systems that encompass a complex episode of care. Just the clinicals alone move you beyond fingers and counting toes. Add in all of the administrative systems, and the number gets big fast.
A visit to an emergency department, with subsequent inpatient admission, includes processes and associated systems such as, but not limited to, scheduling, registration, triage, bed tracking, EMR, devices, pharma, lab, rad, path, care management, CDI, decision support, records management, coding, billing, scrubbing, editing, routing, clearing, denial management, settlement, and “workflow,” all wrapped up into what can be separate or aggregative analytic efforts. I ran out of toes at the end there.
Healthcare has lost track of its provenance; it has created data distrust that today’s technology cannot bridge without painful cost. The lens into which we can gain meaningful insights into healthcare data cannot easily navigate the waters of duplicative and disconnected data.
The biggest losers are the most important players in the “healthcare transaction”: the patient and the provider. It is through a disconnect from those data we truly value in this system that the administrative burden springs: our identity, consent, and medical records.
identity: We fill out form after form after form, sign our identity away, and don’t look (or dare look) at the reconciliation train wreck that ensues as it travels from system to system. Efforts to aggregate data force costly reconstruction of identity across disparate sources. Even the identity of providers is a challenge. Each friction point in the identity supply chain increases cost.
Consent: How can we truly consent to anything when we don’t understand all the risks? Patients and providers don’t easily know how much things are going to cost, and because of the complexity, patients have no option but to sign away consent to record sharing.
Medical Records: Every player in the system would like to know where every medical record is for every patient. No one today could know where they exist except the patient (with a photographic memory), and there are no ubiquitous, trusted tools that tie into the healthcare system to manage them.
There has never been an economically viable, single digital source of truth that everyone can trust for healthcare data.
Enter blockchain.
At its core, a blockchain is a shared event log with special properties that make it resistant to tampering. Like a group text message, we know who writes each transaction, but in the case of blockchain, the entries are highly resistant to edits or deletes. Transactions can be simple, like trading a Bitcoin, or much more complex, like the commit of a digital contract to the log (smart contract).
There are two primary costs that a public blockchain effects (Bitcoin, Ethereum, etc.). It brings the cost of data verification to near zero and lowers the cost of networking. The Bitcoin use case (which is built over a blockchain) provides data to verify who has bitcoins with lock-tight information security properties. Verification happens across all participants with full transparency. Everyone can see the history of all transactions. By creating a digital token that is both the reward for securing the network and that is traded in the network, a positive feedback loop is created; networking is self-funded. The network essentially pays for itself. (There are external costs associated with proof-of-work (POW), but the Bitcoin rewards are worth more than the cost of the electricity in most places, and there are other consensus models that execute at lower cost.)
Here is the challenge: What many are trying to do in healthcare is take this technology, stuff it into a permissioned box (to make it permissioned and more private), remove the tokens (which may ultimately be a big mistake), call it blockchain, and watch it fail, innovate, watch it fail, innovate, and keep this up (at great expense) until someone hopefully succeeds in proving value. Due mostly to the cryptocurrency market, the velocity of investment in this space is much greater than the last big general purpose technical invention: the internet.
At Optum, we have been working on our blockchain strategy (led by Mike Jacobs, senior distinguished engineer) for two years, from early research, to proofs of concept, to a project we have underway with Humana, UnitedHealthcare, MultiPlan, and Quest Diagnostics to tackle provider directory data. We plan to lower the cost of verification for both payers and providers in the system by creating a single source of truth for provider demographic data updates across all participants. The cost of networking should be lowered for payers sharing infrastructure and by removing the need for providers to verify the same data over and over again, costs should be removed there as well. We are hoping that the reduction in friction in the market will also create less provider validation fatigue, which will lead to more accurate data for all involved. We expect to have preliminary results in the fall.
So, what does this mean for the revenue cycle? It is possible that this new way to consider data will end up improving multi-stakeholder processes. Nearly all healthcare workflows fit into this category.
Let’s turn up the hype a bit.
What if a patient could interact with a blockchain to facilitate identity verification, and all visits to providers were written to the same, shared ledger? New types of directory services are born that give power and transparency to the patient (now closer to a consumer?). Can we stitch together records across EMR systems and HIEs with this tech?
What if a claim could be reduced to a tokenized proof of work by a provider against a digital contract in a provider-payer shared environment, paid through a currency tokenized on the network? Adjudication and settlement could be synchronous. No batching or bundling, AR days closer to zero. Can we change the calculus from “payer/provider friction” into “payer/provider collaboration” for the benefit of all?
What if we achieve the Holy Grail of lock-tight-accurate prior authorization and coordinate benefits across multiple payers? Right now the “market” cost to get it right with tech is just too high, so we pick up the phone for verification.
The reality is no one knows how the timeline will play out for blockchain. It took many years of failure on the internet before there were solid use cases that proved value (outside of email). It also should not be lost on anyone that the politics of data sharing in our industry has a history of anti-cooperation. Blockchain as just a technology will not change the culture unless the economics of these systems prove valuable.
Blockchain is still the internet in 1994, so unless you want to be an early adopter there is time to learn and get to know the impacts to your business. If you are a techie in this field, the best thing to do today is make sure you have a basic understanding of blockchain, so when you are asked about it you have a position and can meet your business’ needs. If you are a business leader, you should know enough to keep an eye out in the market; things can change fast, and blockchain could move from buzzword to mainstream in a flash.
If you want to have a discussion on this topic, please feel free to email me at Tony_Little@Optum360.com.
Tony Little is the senior director of Integration Strategy at Optum360, a UnitedHealth Group company. Optum360 is a technology and services leader in the healthcare revenue cycle space. In this role, Tony manages a team that evaluates interoperability market trends, participates in data standards creation, supports sales efforts, and builds interface technology.