Benefits of Introducing Blockchain in Healthcare

By Karl Brown, EVP Quality and Group Operations, HealthCare Partners And April Shapiro, Director of RA and Technology, Aetna

Karl Brown, EVP Quality and Group Operations, HealthCare Partners

The blockchain is an emerging technology that is reshaping many industries. This technology has the potential to reshape the healthcare industry as well.

What empowers this technology in healthcare is not the code itself, but the product of the code, managed in such a way that the product is a trust-free environment, meaning trust comes from the technology and not in people or organizations. The result, of course, is unprecedented trust. The shared open database is linked and secured by cryptography, open code, encryption, operating in a trust-free environment—unlike traditional centralized institutions. Embracing this new technology represents a rejection of inefficient hierarchically impaired organizations.

Blockchain functionality is achieved mainly through proof of work and consensus of a distributed nodal network utilizing hashing. Each distributed block is validated by an algorithm with consensus on all computers on the respective blockchain. No one computer can make an alteration without achieving nodal consensus. Hence, transactions are essentially immutable. First generation blockchain is a distributed, consensus verified, open-source database. The second generation blockchain is a distributed ledger. Unlike the first generation, the second generation blockchain can execute code, including smart contracts. Smart contracts are tamper-proof and execute automatically. These contracts decrease redundancy, arbitrage, and competition. Third generation blockchain incorporates cloud computing and is infinitely scalable.

How can this technology add value to a healthcare system? It’s through utilizing smart contracts in claims processing, utilization management, contracting, quality, and risk adjustment to exchange needed data in an objective, relationship-free, and completely trusted environment for value exchange. Powering the trust in these trust-free transactions in and between organizations are public and private keys. Value can be assigned to a public key and directed via automatically executed code in smart contracts within the block. Private keys are like passwords that give the owner the ability to interact with a block’s corresponding data. Public keys then correspond with a private key via encrypted messages that send the value to public keys and must be deciphered with the private key. Hence, effective security and accuracy of transaction require a private key.

DFINITY, EOS, Iota, and Ethereum are technology companies developing the third generation blockchain. These companies are either developing or are built on technology platforms that remain secure without having each node calculate each transaction. Some have developed high throughput with networks that are not arranged chronologically, but in parallel nodes and tangled transactions the more the users, the faster this network is. Current health plan operations flourish with opportunities to eliminate waste and to add value, but traditional process improvements are mired in outdated technology. Blockchain represents a comprehensive upgrade to the entire plan resulting in a paradigm shift. Start with something simple like claims or prior authorizations, and then move down the production line. When blockchain is adopted, not only can analytics have a real-time view of the moment-by-moment status of departments utilizing blockchain, each plan operation on the chain can have the ability to function at capacity without information bottlenecks in other departments (contracting slowing configuration, configuration limiting claims, claims to delay appeals, and so on).

"Blockchain functionality is achieved mainly through proof of work and consensus of a distributed nodal network utilizing hashing"

Claim processing can be automatized through execution of data edits that are in place for each line of business, replacing the need for third-party vendors. Yes, their vendor edits would still be needed, but the plan could feed the edits into their own system with the automated execution of the claim. This one pass would then eliminate the need for much of the second and third pass validations we routinely see in the industry, representing massive increases in capacity! Then claims could be automatically submitted and tracked with a public key and would execute in real-time as criteria are met for the claim under a smart contract (following Medicare, Medicaid, Marketplace guidelines, and contractual agreements). Claims lag would be eliminated and the wasted manpower and systems maintenance would be virtually eliminated! 

April Shapiro, Director of RA and Technology, Aetna

The same principle would apply to utilization management. With inter-operator variability creating waste (administrative, nursing, and medical director reviews) through adjudication error and variation, data put into blocks from the health plan, including clinical policies (national and local) and governmental regulations and guidelines would eliminate the variation and secure a medically responsible and fiscally sound determination. There could also be care management triggers which would alert the health plan to ongoing or higher-level care needs including complex disease management or transition of care facilitation (e.g. hemoglobin A1C levels, blood pressure readings, etc.).

The appeals and grievances processes are next. Just improvements in processing time alone would improve member outcomes and perceptions resulting in increased Star ratings. Turn-around time compliance would improve due to direct visualization without reporting lag, resulting in much resolved provider-health plan friction points. Prior authorizations, a point of much contention, could be automated and visible to both parties, using a public key.

Contracting processes would be streamlined, resolving the need for often difficult to arrange face-to-face negotiations, with the contracts being discussed and signed through use of hashes. Access to contract details based on private key tiers, and execution of contracted rates, discounts, bonuses, non-standard authorization templates could all be worked into the components of a block to be executed automatically.

The black box of credentialing could be illuminated by providing a public key with the need to know access to providers’ credentialing status. As well, performance measures could be coded to automatically create and maintain provider network tiers, with bonuses, withholds, and rates set according to performance metrics and thresholds.

Interactions with governing bodies and accrediting organization could also benefit from the addition up-to-date clarity visualization of unbiased quality and risk results that could be directly retrieved using public key access. Audits costs would decrease as medical records would be immediately available…chart pulls and data extraction would nearly be a thing of the past as natural language processing and medical dictionaries could be interfaced with the blocks’ contents. Blockchain technology is also compliant with US privacy law and guidelines. When set up that way, the US citizens would have visibility into their medical record, and the availability of the entire of a patient’s record would reduce medical errors in primary, urgent, and emergency care centers across the nation in an unprecedented way.

The only real questions remaining is what is taking so long. The capability currently exists. We already do most of this processing outside the blockchain. Yes, it’s up to us to pioneer a new approach to reduce costs while dramatically improving care! Image a world where the current trillion dollar healthcare budget is actually spent on providing healthcare, instead of waste, fraud, incorrect, and outdated data mitigation, all the while freeing up practitioners to focus on the patient? With the implementation of the blockchain, this is the future. 

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