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According to a 2016 IBV study, “Healthcare Rallies for Blockchain,” healthcare seemed to be “setting the pace on blockchain adoption,” even ahead of the financial services industry. The study surveyed over 200 healthcare executives and found that 16 percent expected to have commercial blockchain solutions in place by 2017. Now three years later, there’s no denying that healthcare has lagged behind other industries in blockchain adoption despite initial enthusiasm. Outmoded legacy systems, heavy regulation, privacy concerns, and a history of noncooperation within the industry have slowed adoption by healthcare companies.
Healthcare’s big win: HUN
The initial strategy, similar to other industries, focused on delivering specific blockchain use cases first, each with its own network and application. However, it was difficult to get competitors to collaborate with this approach.
Given the lessons learned from early blockchain work in the healthcare industry and the industry’s unique nature, IBM, Cigna And Sentara Healthcare established the Health Utility Network (HUN) along with the following members: Aetna, Anthem, Health Care Service Corporation (HCSC), and PNC Bank. This is a blockchain-based ecosystem for the healthcare industry that incorporates a platform + network design. Instead of building a network for one use case, the intent is to build a network for a platform that can scale for multiple use cases. In this model, a collaborative entity will stand up a blockchain-based platform and an open, inclusive ecosystem upon which everyone will build solutions.
Platform-based solutions will leverage the data amassed by the network. The network is pre-competitive, and therefore, it can and will benefit all parties involved. At its essence, the network establishes a set of rules: a governance procedure for how data gets exchanged across the network, how participants join, and how regulatory compliance is adhered to. Then comes the platform, on which all interested parties will both develop and consume applications. The network, as a not-for-profit, will have costs that will be sustained by a percentage of profit from the platform and its apps.
This shift from the use case first method has made blockchain a safer investment and allows competing solution providers to enter a network and work together for profit. The platform expands the scope beyond blockchain to carry applications leveraging technology like cognitive computing and robotic process automation. A recent IBV study discusses the importance of thinking just beyond the first use case and the steps critical to designing successful blockchain networks.
The government’s response
In order to comply with regulatory requirements, the cloud based blockchain system to underpin the HUN platform is HIPAA compliant. At IBM, various assets have been developed with the FDA and CDC including an application that manages consent between parties, a series of tools that can process and interpret claims, and tools to prove healthcare payments.
On the regulatory front, conditions have taken an agreeable turn for blockchain. Earlier this year at the annual HIMSS (Healthcare Information and Management Systems Society) conference, CMS (Centers for Medicare & Medicaid Services) unveiled new requirements for interoperability of health data, enforced with fines for noncompliant organizations. To accommodate these requirements, CMS has been loosening regulations on the interaction between healthcare entities, laying favorable ground for the formation of blockchain networks in the healthcare space.
Another signal of the government’s support of blockchain has been the FDA’s recent selection of IBM, KPMG, Merck and Walmart to be part of a pilot program to assess the use of blockchain to meet the Drug Supply Chain Security Act’s (DSCSA) requirements to track and trace pharmaceutical products.
What is next in blockchain for healthcare?
Right now, the HUN network is in the founding phase, solely comprised of founding members focused on establishing policies and procedures. When HUN goes into production later this year, the plan is to open the network to any organization that stands to benefit from participation, ideally expanding to one day include all healthcare payers and providers in the nation.
The use cases being prioritized right now are efficiency and back-office based, with a focus on improving processes by streamlining and reducing costs. These are conservative use cases that can prove the efficacy of blockchain right out of the gate. Once HUN has proven its value, the hope is to expand the platform to be more transformative for the industry.
For example, HUN may one day improve the patient’s experience by transferring records between providers with their consent, eliminating the need for the patient to fill the same forms repeatedly. Before long, patients may be able to see the journey of their data across a network that includes all healthcare payers and providers in the country.
Bringing competitors together to be interoperable requires a radically new way of thinking for all involved parties. We are eager and excited by the prospect that we may have found the recipe to make blockchain networks truly scale.