Today, blockchain no longer rates as a hot buzzword. But its absence from headlines belies the fact that blockchain is more important in 2020 than ever before. Leaving the bitcoin association completely out of the equation, the blockchain paradigm now underpins the best hopes for future function in the increasingly complex and digitalized business world globally.
At a fundamental level, blockchain was developed to be an irrefutable database and log for distributed exchange and reconciliation. The ability to digitally establish and manage trust and transactions among multitudes of far-flung individuals and/or organizations is blockchain’s source of power. It is no wonder, then, that trades as divergent as journalism and diamond sales have turned to blockchain infrastructure to retool business practices and operations for the modern age.
The healthcare sector is no exception. Over the past few years, there’s been a lot of investment and experimentation on how to best use blockchain technology to alleviate serious choke points and inefficiencies hampering U.S. healthcare modernization.
Those efforts are now beginning to bear fruit. We’re finally starting to see the roll-out of potentially transformative healthcare applications using blockchain as the connector. Here are two important areas I predict blockchain’s real impact on healthcare will become evident early in the new decade:
Payment Transformation
Because blockchain was initially designed as a public transaction ledger for cryptocurrency, related finance functions formed the obvious first wave of expanded use cases. The ensuing proliferation of blockchain-based fintech capabilities for digital payment has matured to the extent that it’s not just represented in the infrastructure of finance upstarts like Ripple, but is functional in interactions among institutional banking entities and even central banks.
Basic payment reconciliation within healthcare ecosystems represents the low-hanging fruit, and blockchain solutions are already entering the space. I expect blockchain payment mechanisms to become even more prominent in the next 18 months to two years.
The benefits of blockchain payment mechanisms in healthcare cannot be understated. Consider the way Square revolutionized point-of-sale systems with mobile technology so that small merchants could accept payment digitally without expensive hardware, massive service fees or the cost burden of waiting 30 days for credit card fulfillment. If you can reduce the amount of time and equipment required for a transaction, you reduce your overhead. And payment processing overhead is a big pain point in healthcare. Blockchain can digitize that process.
Blockchain-based healthcare payment solutions can address partnership agreements through smart contracts that execute when conditions are met — securely and automatically. The introduction of real-time applications for payment authorization will institute vastly improved mechanisms for validation and remittance without having to wade through reams of paperwork.
Such efficiencies in payment infrastructure could invite new organizations to offer insurance, different types of self-pay models or cooperative payment plans. Better payment processing might seem like a small thing, but improving the way it is handled in healthcare represents massive cost savings and makes grander improvements possible.
Pharmaceutical Pioneering
Forging a path for the greater healthcare ecosystem, blockchain is already making an impact on the pharmaceutical industry in a number of ways. For example, information about pharmaceutical research and development is traditionally very siloed, and surfacing information requires enormous expertise and effort. Even for knowledgeable medical professionals, such details are spread among myriad old-school databases and incompatible platforms.
Being able to pull drug development information from, or push queries out to, a distributed mechanism that ensures they’re relayed to applicable pharmaceutical organizations would be of tremendous help to researchers, patients, care providers and drug manufacturers especially.
Blockchain makes that possible. Just last year, the Institute of Electrical and Electronics Engineers (IEEE) announced an initiative to leverage blockchain in clinical trials because “the estimated $44.2 billion global clinical trials market is facing a number of challenges related to patient recruitment and retention, rising costs to meet regulatory policies, data governance, and more.”
Further, by being able to “spend” information securely and anonymously, pharmaceutical companies can also better digitally manage functions such as supply chain, quality assurance and fraud prevention. If you look at what’s happening with Walmart and its foray into IBM’s Food Trust blockchain for tracing grocery provenance or its enormous supply and logistics blockchain, this same type of infrastructure can apply to better managing medications (not coincidentally, Walmart is also pursuing drug tracking blockchain systems with pharmaceutical partners).
Pharmaceutical companies are also using blockchain to enable other revolutionary technologies in the pursuit of new treatments and products. In Europe this past summer, the blockchain-based Machine Learning Ledger Orchestration for Drug Discovery (MELLODDY) was launched to train machine learning on chemical libraries from Amgen, AstraZeneca, GlaxoSmithKline, Janssen, Merck and Novartis, among other participating companies. According to The Lancet (registration required), MELLODDY will “accelerate the drug discovery process by making it easier to identify promising compounds” without having to pool data and while still preserving each company’s intellectual property, privacy, and control.
Why Now?
Blockchain’s emergence now springs from legacy technology’s inability to adapt to the enormous amounts of data now flowing from every interaction. There’s value in all that information, but only when it can be properly exchanged and digested while preserving the security and privacy protections essential to the sector.
But there is no single blockchain platform for the world: It’s not like the internet. What we do have today — that was not available even a few short years ago — is a host of increasingly cross-functional blockchain-as-a-service platforms supported by reliable technology companies such as Amazon, Microsoft, IBM and others. Such off-the-shelf infrastructure frees healthcare organizations from needing to create their own blockchains and lets them simply develop or adopt more efficient applications that are built on a blockchain. That shift is game-changing.
Because of this, we’re going to be using a lot more blockchain-powered technology platforms and apps to improve a lot of things in healthcare, including transaction logging, validation, contracts, health records, credentialing and more.
Payment practices and pharmaceutical projects may lead the way, but 2020 will be the start of the blockchain decade across healthcare.
