With Insurers Signaling Interest, Can Blockchain Disrupt Healthtech?
Late last week, IBM and several other large companies that serve the healthcare industry announced a collaboration aimed at determining whether, and how, blockchain technology could be used to improve patient care and lower costs for industry stakeholders.
The announcement came about nine months after a separate conglomerate of healthcare businesses, including insurer and health services company Humana, announced a similar, blockchain-based initiative.
Most people have heard of blockchain technology as the underpinning of digital currencies. So the public impression of the technology can be tainted by recent struggles in the cryptocurrency market. Many digital currencies had a rough 2018, following a major upswing in coin values the previous year.
Some leaders in the software and business worlds, including healthcare experts, have long seen potential in using blockchain in areas outside of cryptocurrency. Others remain skeptical about all of the hype the technology has generated.
With blockchain technology, users can create a public, decentralized ledger of transactional data, distributed among multiple computers, so that those transactions can later be authenticated. Certain data about the transactions are visible to the public, but those involved in an exchange—paying a hospital bill, to give a hypothetical healthcare example—can use encryption tools to ensure that specific information contained within the ledger is kept private.
IBM’s (NYSE: IBM) partners in the recently announced blockchain-based collaboration are PNC Bank (NYSE: PNC) and three health insurers: Anthem (NYSE: ANTM), Health Care Service Corporation, and Aetna, which is now part of CVS Health (NYSE: CVS). The effort is aimed in part at keeping current and accurate directories of physicians and other healthcare providers. These directories are used by health plans, hospitals, and other organizations.
Ensuring that provider directories are up to date is important because they indicate which doctors are in a patient’s network. This information can guide patients as they decide whether—and where—to receive certain healthcare services. Some states, like California, have laws requiring health plans to review and update such directories every six months.
Using blockchain to manage provider directories is likewise a goal of a collaboration announced last April among Humana (NYSE: HUM), Quest Diagnostics (NYSE: DGX), MultiPlan, and Optum, which is part of UnitedHealth Group (NYSE: UNH).
But the IBM-led coalition’s ambitions appear to go beyond provider directories. The companies involved say they also plan to dig into how blockchain technology could improve “interoperability,” a term that refers to the ability of hospitals and clinics to exchange information on their patients, no matter what type of software they use to manage patients’ medical records. Processing payments and claims sent to health insurers for reimbursement is another area where IBM and its collaborators believe blockchain could help improve the status quo.
All three industry challenges—directories, interoperability, and payments—are large, complex areas of healthcare that of course cannot be reformed overnight by using blockchain technology.
Both business conglomerates announced in the past year that are concentrating on applications for blockchain in healthcare still appear to be in the exploration and experimentation phase. However, if both groups were to, say, successfully use the technology to create an improved framework for provider directories, problems with access and exclusivity could emerge in the future.
“It’s network-dependent—if you’re in a network with Aetna, then you can transact with Aetna,” says David Watson, a veteran healthcare IT executive. “Either they would have to agree to all be in the same network, or … Next Page »