2017 was a breakthrough year for blockchain, although this didn’t become evident until late in the year when the market for cryptocurrencies suddenly heated up. What most people heard about was the rise of Bitcoin, the mysterious cryptocurrency that made overnight millionaires. And while Bitcoin was making headlines, the technology pushing Bitcoin ahead was blockchain.
So what is blockchain and how is this digital phenomenon relevant to healthcare? Blockchain is a decentralized, vast database of both publicly and privately distributed ledgers (blocks), with each block containing specific, encrypted information. Each block contains a specific timestamp and link to a previous block, resulting in a chain of blocks…or blockchain. Once a block is recorded and authenticated, it is permanent and cannot be changed without altering the previous blocks related to that block, making it nearly impossible to change the information contained in an established block.
To date, blockchain has primarily been used in the financial sector, as investors have been trading cryptocurrencies for several years now. But the benefits of blockchain are starting to be realized and utilized in other sectors such as Healthcare, Real Estate, Media, Transportation, and Legal. Currently, numerous healthcare companies are working on platforms based on blockchain technology that look to revolutionize the industry. In the near future, there will be several use cases for blockchain, four of the biggest ones being:
- Data Interoperability.
- Data Security.
- Staff Efficiency.
- Payment Automation.
Data Interoperability
Data Interoperability is the exchange and use of information from one system to another, regardless of the initial technology that the individual systems are built on; for example, the ability for a Gmail user to send emails to a Yahoo user. Imagine a more streamlined and secure data exchange from a hospital to a nursing facility, or a small physician’s office to a hospital, without having to go through an intermediary. Interoperability covers health and patient information, clinical data, as well as financial data. The increase in interoperability would improve access to health data, as well as improve the quality and safety for patients to maintain and provide their information to healthcare providers. Providers would consequently be able to improve their data systems as well as their data collection, enabling greater statistical and financial analysis.
Data Security
Data Security was one of the biggest concerns in healthcare in 2017. According to a healthit.gov report, the number of individuals affected by protected health information breaches from 2010 – 2015 climbed from approximately 5 million to 112 million. Currently in 2018, more than 375, 000 individuals have already been impacted by data breaches, according to the Department of Health and Human Services (HHS). Not only is a patient’s data and identity at stake, so are millions of dollars in damages that come along with each of these data breaches, not to mention the fines associated with Health Insurance Portability and Accountability Act (HIPAA) violations. Companies are working on platforms using blockchain that will greatly reduce the risk of breaches by allowing patients to have control of their information and be able to assign permission for providers to access the encrypted information.
Staff Efficiency
Blockchain will also provide the ability to quickly share and validate a patient’s medical history. The ability to access this information will save valuable time for virtually every department within a healthcare facility. Billing departments can gather and authorize insurance and billing information instantaneously, admissions and social service staff can pre-screen and verify patient demographic information within seconds of receiving a referral, and physicians and nursing staff will have vital and accurate health information at their fingertips as soon as the patient arrives at their facility, whether it is an Emergency Department at a hospital or a new admission in a nursing facility. The reduction in staff hours performing routine duties like pre-screens and data entry will help save providers money in the long-term and enable staff to devote more time to direct patient care.
Payment Automation
Another big impact that blockchain will have on healthcare will be on payment automation and reduced reliance on fiscal intermediaries (FI). The ability for a healthcare provider to utilize blockchain technology for payment automation, as well as contracting, will lower staffing costs and decrease the time from claim submission to payment. Additionally, any payment that is processed will be locked into the chain, and any disputes over payment can be easily resolved.
While blockchain technology is still in its beginning stages, it will prove to play a major role in revolutionizing how healthcare data is transferred, stored and utilized. As you are reading this, companies are rapidly working to create new platforms, hoping to get them released for use within the next 6-12 months. Providers looking to implement these new systems will soon reap the benefits of greater staff efficiency, greater data security and access to patient information, and more timely payments.
For questions or comments please contact Marcum LLP for further assistance.
