The 2018 Stories that shaped Blockchain in Healthcare

 

Re-posted from @hashedhealth on Medium

Welcome to 2019!

As we think about our community’s 2019 goals and objectives in the healthcare blockchain space, I find it helps to reflect on the important and influential news of 2018. In this list, I have done my best to include projects and announcements that I consider real or indicative of a signal and not just noise. That does not mean there isn’t marketing and spin behind them. These announcements are from notable companies, but often have little detail. Several of them took me by surprise. It can be hard to tell how real they are. 2019 will tell us what kind of results are delivered from the strategies outlined in these events and announcements.

Upon reviewing this list, I noticed a few things:

  • Maturation: We are still early in the evolution of blockchain technology in healthcare. The 2018 highlights offer a more mature view of blockchain / DLT success than what we have seen in the past. The HHS, Procredex, Synaptic, and Change announcements below all show various signs of strength and maturity. Much of this maturity is a result of non-technical achievements.
  • Pivots, Acquisitions, and Wind-Downs: This maturity is also surfacing in announcements around acquisitions (Pokitdok), pivots (Gem pivots away from healthcare), and business model crisis (ICOs losing significant value). I enter 2019 realizing that many of the people I respect and who inspired me during my early days in the space are gone. Ted Tanner’s Pokitdok was acquired by Change. Micah Winkelspecht and Gem are now a crypto wallet company. Diego Espinoza is focused on fintech. It’s a reminder that innovation in healthcare is really hard work.
  • B2B Trend: Most all of the success stories going in to 2019 are built upon DLT, not open blockchains. All of them look like B2B use cases.
  • Health Systems Surprises: Health systems are generally considered to be fast followers at best. If they have $5 to invest, they typically put that money to use in a way that immediately and directly supports patient care (or an EMR implementation). However, our list includes three health systems who have stepped up with big announcements in 2018, as well as large name-brand health systems getting involved with more mature networks such as ProCredEx (credentialing) and Synaptic (directories).
  • Provider Identity: Perhaps the two most mature networks of 2018 are ProCredEx and Synaptic. Both projects boast impressive product, business model and, perhaps most importantly, governance signs of life. Provider identity seems to be the drawing a lot of attention as the low hanging fruit.
  • What 2018 Says about 2019: 2018 was not the year where we found out the true value of blockchain / DLT in healthcare, but at this point we do have an understanding of what use cases will get us there. The results of the efforts on this list will be told in 2019. If these results are positive, I expect enterprise interest in blockchain to spike to new levels in 2019 / 2020 as all the companies and investors who took a ‘wait and see’ approach jump in.

Here are my top 15 healthcare blockchain new highlights of 2018 (in no particular order).

  1. Jose Arrieta & Oki Mek Become the HHS Blockchain Dream Team: Receive Federal Authority to Operate (ATO)

In December 2018 Jose Arrieta and Oki Mek received the first blockchain ATO (Authority to Operate) in the federal government. This announcement has made them like the Jordan and Pippen of the federal blockchain league.

While many others in the federal government and in the commercial space pilot and experiment, Arrieta’s team, with input from the Acquisition Workforce, has deployed a solution that improves access to a standard set of spend data in real-time and decentralizes the execution of logic from that data.

According to Arrieta, conservative estimates show HHS Accelerate having a measurable return on investment of over 800%. Those waiting for proof of value may have just found it.

This announcement proves that blockchain is being used to solve real problems in the government space. I expect Arrieta’s work to drive increased interest in blockchain solutions in the government space in 2019. This hard work has also created two of the federal government’s newest rockstars.

 

  1. Change Healthcare Doubles Down on Blockchain / Acquires Pokitdok

Change Healthcare is the largest claims processor in the US. At the end of their 2018 fiscal year, they had processed nearly 14 billion transactions and $1.0 trillion in annual healthcare expenditures. They are a middleman with a unique perspective on the strengths and limitations of the current payment infrastructure in healthcare. They are also one of the earliest corporate adopters of blockchain technology in healthcare.

In 2017, they hired Emily Vaughn Bailey from Gem (who, in 2018, pivoted away from healthcare and their blockchain OS to being a crypto-wallet) to lead their blockchain strategy. In 2018, they doubled down on their blockchain position with a series of announcements.

First, in January 2018, Change announced the general availability of “the first enterprise-scale blockchain solution for healthcare.” Their solution, which is built on Fabric processes a daily payload of 50 million claim events and scales up to 550 transactions per second.

Then, in December 2018, Change announced they were acquiring Pokitdok who, under the leadership of Ted Tanner, was an early leader in the blockchain space.  From the press release it seems that Change is focused on the Pokitdok assets (API technologies, blockchain use case assets, network assets), rather than its talent. The combination of Pokidok’s API marketplace with Change’s legacy payment infrastructure could open the door to some excellent opportunities for Change.

 

  1. Senator Bill Frist’s Distributed:Health 2018 Keynote

One signal of the maturation of the blockchain market were the companies on stage and in attendance at this year’s Distributed:Health conference. Distributed:Health is the premier healthcare blockchain conference in the world.  What began in 2016 as a relatively obscure conference of early thought-leaders has evolved in to a legit healthcare conference of over 700 people from around the globe.

The day one keynote speaker was former Senate Majority Leader Bill Frist (followed by an excellent panel with Michael Painter of The Robert Wood Johnson Foundation), who summarized his experience at Distributed:Health 18 and his thoughtful view of how the technology has matured in this Forbes article published in October.

 

  1. Provider Data Management, Part 1: Procredex Announcement at HIMSS 2018

2018 was a year when the world discovered which would be the first use cases to prove the value of blockchain-inspired technologies in healthcare. After all the talk of ICOs, cryptocurrencies, and medical records on the blockchain, a series of use cases focusing on provider data management have surface as the low-hanging fruit.

Procredex was announced at HIMSS18 as a new solution to the old problem of physician credentialing. Using a distributed ledger to solve for the authenticity of verified provider credentials enables a new business model that the world has never seen before. In addition, a string of announcements introduced a network of health systems and health plans who are coming together to bring this product to market in 2019. Procredex seems to have found the sweet spot between the technical solution, a new business model, and the governance structure necessary to make the use case stand up in a meaningful way.

 

  1. Provider Data Management, Part 2: Synaptic Announcement

Procredex is not the only provider data management use case to show viability. The Synaptic Alliance was announced in April 2018 as an inter-company data-sharing solution aimed at the problem of provider directory data. The Synaptic solution is similar to Procredex in that it deals with physician data, but instead of credentials, the Synaptic Alliance focuses on provider demographic data.

Like Procredex, Synaptic has an equally impressive consortium of healthcare enterprisese. Synaptic is an excellent example of a group of “competitive” organizations coming together under a common mission to solve an industry problem. Kyle Culver from Humana, Mike Jacobs from Optum, and the other founders of this project have been very thoughtful in their approach, especially in terms of governance objectives. Synaptic is definitely a project to watch in 2019.

 

  1. Two Medical Records ICOs Announce Agreements with Major US Health Systems

In 2018, we saw a pair of brand name medical records announce that they were exploring medical records on the blockchain. What made these announcements even more interesting is that the agreements are with Initial Coin Offerings (ICOs) Medibloc out of South Korea, and MedicalChain which is based in the UK.

In June 2018, UK- based MedicalChain announced an agreement with Minnesota-based Mayo Clinic to explore storing patient data on a blockchain. At the time, blockchain thought-leader, Robert Miller, was at MedicalChain and is rumored to have brought the deal together. Miller has since left the organization to begin his own initiative, Honeycomb Health in New York. It is not clear what, if any, effect this will have on the working relationship with Mayo.

Then, in December, Mass General announced a partnership with Korean ICO MediBloc to explore the storage and sharing of PHI. Under this agreement, Mass General will “explore potentials of blockchain technology to provide secure solutions for health information exchange, integrate healthcare AI applications into the day-to-day clinical workflow, and support [a] data sharing and labeling platform for machine learning model development.”

These are two announcements I was not expecting, given a) the relative immaturity of blockchain technology for medical records storage; b) the unclear business model related to the medical records use case; c) questions around regulatory concerns with PHI on the blockchain; and d) the 2018 ICO landscape and the perceived risk around crypto-focused blockchain projects. It will be interesting to see whether these projects gain real momentum and publish results in 2019 or if these announcements fade.

 

  1. Mount Sinai Places its Bet on Blockchain

Another big health system announcement came in July 2018 when Mount Sinai announced their Center for Biomedical Blockchain Research, which is being led by Joel Dudley (Executive Vice President of Precision Health at Mount Sinai, Mount Sinai Endowed Chair of Biomedical Data Science, Associate Professor of Genetics and Genomic Sciences, and Director of the Institute for Next Generation Healthcare) and Noah Zimmerman (Assistant Professor of Genetics & Genomic Sciences and Director of the Health Data and Design Innovation Center). Besides having extremely long professional titles, Dudley and Zimmerman will be leading academic evaluations of blockchain solutions, leading partnership and consulting opportunities with various companies, and building their own systems within Mount Sinai.

 

  1. CDC + IBM EHR

One of the most popular topics at Distributed:Health in 2018 was specific to the opportunities for blockchain to help with the opioid crisis. In September, IBM and the CDC discussed this use case with Fast Company. The two companies are hopeful the technology can be used to track patient symptoms and treatments.

 

  1. Amazon Rising

At times it seemed that Amazon was making healthcare technology news every week. Certainly, it was not all about blockchain, but it all seems to add up to a long-term healthcare strategy that includes blockchain-inspired technology. It is clear that Amazon sees a number of opportunities to capitalize on the chaotic, irrational marketplace that exists today. I think they are right.

Here are a few of the many Amazon headlines that caught my attention:

  1. CBInsights Amazon in Healthcare Briefing: This was required reading at Hashed. Great research by Nikhil Krishnan and the CBInsights Team (who, by the way, did great work in 2018).
  2. The Amazon, Berkshire, JPMorgan Health Venture
  3. The Pillpack acquisition
  4. EHR-focused machine learning designed to improve physician workflow.
  5. Amazon announces their Quantum Ledger Database (QLD) a “fully managed ledger database that provides a transparent, immutable and cryptographically verifiable transaction log. Owned by a central trusted authority.”

These a few of the many interesting Amazon initiatives that set the stage for a lot more news in 2019 that will push healthcare to innovate faster.

 

  1. Signal Stream Announcement at Distributed:Health

Distributed:Health has become the premier event where companies announce new products and initiatives. Over the years, healthcare’s leading companies including Change Healthcare, Hyperledger, Gem, Hashed Health, TIBCO, PokitDok and others. 2018 was no exception.

The most significant new product announcement at Distributed:Health 2018 was Signal Stream, a new platform that enables healthcare enterprises to automate multi-party or multi-system workflows and agreements. It solves existing administrative issues related to contract adjudication (ex. outcomes-based contracts and other types of multiparty workflow tools) and creates a new way to innovate on contract design.

It seems that payments and value-transfer seem to be an area where blockchain will be able to solve real problems for real companies in 2019.

 

  1. ConsenSys Hunkers Down (and re-positions itself in Healthcare)

On their flight to the moon Consensys encountered some turbulence in 2018. Things seemed to change very quickly in late 2018. One example of how fast things changed was Civil, a seemingly high quality journalism network project. I was surprised when I saw the announcement that Civil failed to raise their floor and would refund investors.  That failure provided further validation for the general cooling of the ICO market. It also said a lot about the marketability of projects following the framework of the Brooklyn Project and the general lack of appetite for application token sales. The project approach seemed like a risky strategy from a securities standpoint. It was an unexpected, high profile public failure that seemed an indicator of where the crypto market is in 2018.

This disappointment was followed by a string of negative press related to announcements of layoffs and the cutting off most of its 50+ “spoke” companies.

It seems clear that, with the decline in the price of Ether, ConsenSys is now digging in for the long haul by doing what needs to be done. I am sure these weren’t easy decisions. I see these moves as healthy signs that ConsenSys has its eye on the future.

It seems that part of their strategy could include healthcare. ConsenSys has tapped one of the top minds in healthcare blockchain, Heather Flannery, as Healthcare Circle Global Lead. They could not have picked a better spokeswoman to represent their interests. If ConsenSys Health is given room to grow, it could be a leading player in the healthcare space in the coming years.

This is not ConsenSys’ first foray in to healthcare. Back in 2017, Diego Espinoza’s Healthcoin project joined ConsenSys as a spoke project. Once absorbed, that project quickly rebranded as “Linnea” and quickly lost its healthcare specificity. Diego is now working on a new fintech blockchain startup and it is not clear what Linnea’s fate will be in the new ConsenSys restructuring where most spokes are being spun out to survive on their own.

 

  1. Crypto On the Ropes

As mentioned in #11 above, crypto had a really tough year.  There were announcements of ICO layoffs, SEC crackdowns, and horrible results reminding us that most of the $30B invested in crypto have “nothing to show.”  The 2017 healthcare ICOs are not immune to these criticisms. They come under fire for their lack of decentralization and massive declines in value.

As more ICOs come under fire for securities violations, the scary truth is that those electing recission must pay back FMV as of the date of the original investment and, I would assume, probably have to pay it back in fiat.

 

  1. B2B Heating Up

While the crypto market is in question, the B2B market for blockchain and distributed ledger solutions continues to heat up as we enter 2019.  Recent research by Markets&Markets and others predicts significant growth over the coming years in areas such as supply chain, interoperability, payments, and other areas.

 

  1. Harder Than We Thought

In 2018 we realized that successful blockchain use case development is harder than it seems. ICO projects are not the only ones struggling to prove themselves. ICO’s catch a lot of flack because they raised so much money and have produced so little, but we are all learning that meaningful work in the space is really hard. It requires a clever piecing together of technical, business, and governance concerns that often feel like a three dimensional chess match. Even as the technology matures, many good projects have failed or will fail for non-technical reasons.

 

  1. Happy Birthday Bitcoin

This year we wish Bitcoin a happy 10th birthday.  To celebrate, I went back and re-read the Satoshi Whitepaper which I first discovered in 2015. This vision of a totally decentralized digital currency and payment system changed my life. I saw it as an invitation to apply it to what I know about healthcare.

I like how Laura Shin (if you don’t listen to her podcasts you are missing out on a great source of information) recently described Bitcoin as a global, leaderless, user-owned IT department which is now more valuable than Goldman Sachs (over $100b market cap). And despite the value flowing through it, Bitcoin has never been hacked.

Our original summary of the Satoshi whitepaper can be found here. The Bitcoin genesis block was introduced ten years ago on Jan 3, 2009. It is amazing how far we have come and we are just getting started. Thank you Satoshi whoever you are.

————

So there you have it.  The top 15 healthcare blockchain news highlights of 2018. These announcements indicate use cases that I think are real as well as some interesting new hype.

The announcements I’d like to see next year have everything to do with results from the projects announced in 2019 and host of new concepts.  In terms of a goal for 2019 for the larger healthcare blockchain community to strive for, I think we can aim for four (4) DLT or blockchain projects that are in production, being used by a network of real companies, and have publicly recorded results of value created by the end of the year. This is a goal for the larger community of which Hashed is a member.

At Hashed, our contribution to this goal comes through our efforts to solve real problems for real companies in today’s world while building bridges to a more rational, value-based, patient-focused future. Using blockchain and DLT, we build products that unlock new solutions to old problems in healthcare. I believe we will look back on 2019 as a banner year for Hashed, our network partners, and the larger healthcare blockchain community.

 

See the original Medium post here: https://medium.com/@hashedhealth/2018-in-review-6bf92c6d273d

Link to Original Post on Medium

DAML Driven Development:

Hashed Health

Guest post by Corey Todaro,

Chief Product Officer, Hashed Health

How do seasoned veterans at one of the world’s top provider of blockchain technology healthcare solutions rate DAML — Digital Asset’s smart contract modeling language for distributed ledger technology (DLT) — for solving core healthcare business problems? In this third of a series of guest blog posts by our partners, customers, and others working with the DAML SDK, Hashed Health’s Corey Todaro discusses how DAML is helping them bring their Signal Stream product to market.

Since 2016, Hashed Health has worked to introduce blockchain and distributed ledger technologies (“DLT”) to healthcare. Founded by and comprised of healthcare industry veterans, Hashed Health engages with enterprises from all corners of this diverse industry, ideating and building innovative distributed solutions to address healthcare’s long-standing issues. Hashed Health believes in the disruptive potential for DLT but knows that change within a highly regulated and complex industry like healthcare is challenging. Hashed Health rises to that challenge with thoughtful and strategic design. Our obsession is DLT use case design, balancing varied constraints and regulatory realities to produce DLT frameworks and platforms that meet the needs of diverse stakeholders — easing inefficiency and generating measurable business value for our clients.

Our design process has always been agnostic as to DLT platform selection. We’ve designed multiple prototypes on a variety of blockchain and DLT platforms in an effort to assess their ease of use for both developers and end-users. We’ve mapped a wide range of DLT options to problem classes commonly faced by our enterprise healthcare clients. The metaphor of a toolbox is apt — blockchain and DLT platforms comprise a toolbox which contains a variety of tools useful for addressing and tackling specific problems.

For every business or administrative challenge, there is a right tool to provide a solution. By early 2017, our design process had identified a missing but essential tool. As we worked to reimagine and redesign various business processes in healthcare, confidentiality and privacy were — and remain — essential requirements in any design. While nearly all enterprise-grade DLT platforms provide features for transactional confidentiality, these features at best resulted in over-complicated designs and at worse failed to meet the stringent privacy requirements of the industry. Put simply, we didn’t have the right tool for the problems before us.

In the spring of 2018, Hashed Health participated in the developer preview program for the DAML SDK and the Digital Asset Platform. The result was more than the simple addition of another platform to our design kit. Rather, DAML — Digital Asset’s modeling language for developing smart contracts — has become an indispensable tool, already serving as the foundation for our healthcare contracting platform, Signal Stream.

In our experience, DAML combines a set of features that make it not only distinct from other DLT platforms but also make it an ideal platform for innovative designs for the healthcare industry. It gives us the ability to do something we’ve not been able to do before with distributed ledger technology.

Language Matters

At the heart of the platform is DAML itself, a domain-specific modeling language used to create transactional templates that define counterparty and related third-party behavior. The majority of enterprise-focused DLT platforms offer the ability to create application logic that can operate on the ledger (so-called Smart Contracts). Developers usually employ a general-purpose programming language to develop these smart contracts. By contrast, DAML is specifically designed to model business and commercial agreements. The concepts of business are core structures of the language itself.

Built on a functional programming foundation, DAML can feel a little restrictive at first, limiting the approaches a developer can take to define a transaction. Indeed, our developers initially found it off-putting. However, within a few short days, we understood that these seeming limitations actually deliver great advantages. DAML is designed for formal correctness. In other words, contracts and transactions written in DAML operate precisely as expected — essential for business trust and value. On other DLT platforms, we need to decide how to best approximate a business interaction and constantly test to assure that the approximation behaves as required because, when you use a general-purpose language, the behavior of that contract can vary. The same input can potentially give a range of unexpected and undesirable outputs — the contract can behave in strange ways. With DAML there is no need to approximate. This led to more efficient use of our development resources.

Language matters; how you write the smart contract and what language you use to write the smart contract matters for the business performance of that contract.

Confidential by Design

One of the more difficult design problems with DLT is transparency of the ledger. Many DLT platforms bear a resemblance, or even a direct relationship, to the original cryptocurrency blockchain platforms. These early platforms were designed for radical transparency. This transparency is essential to both their operation in open, permissionless environments and their trustless, tamper-resistant nature. For enterprises, this transparency at best complicates and at worst limits the benefits of DLT. DLT platforms such as Hyperledger Fabric and Quorum (as well as other Ethereum derivatives) have introduced confidentiality features like private channels, private data collections, and hidden contracts, while still operating on transparent, yet permissioned, ledger networks. While important, these platform developments are secondary designs, often at odds with the original design intention of the platform itself. As a designer, I find these confidentiality schemes to be inelegant after-thoughts.

By contrast, DAML is confidential by design — transactional confidentiality in DAML is a first-class, first-order feature; it is not a secondary add-on. Transactions are only visible to direct counterparties and/or third parties who have been explicitly granted rights to view. Prior to DAML, Hashed Health’s design work was constrained to either ‘data sharing’ use cases in which privacy is not essential or to overly-complicated transactional data models which attempt to preserve privacy on an otherwise open ledger. DAML’s focus on privacy — an essential regulatory business requirement in the healthcare industry — has given us a powerful tool to extend our design and DLT product development. And because of DAML’s fine-grained control over what can be shared with other parties, we can bring in observers, auditors, regulators, third-party service providers — and control precisely what they see out of the transaction. Even if it’s a single piece of data.

Radically Scalable

In 2014, as the financial services and other industry began to consider DLT technology, the scale limitations of open and even permissioned DLT platforms quickly became apparent. Supporting scales of only a few dozen to at most a few thousand transactions per second, many DLT platforms are incapable of supporting the throughput requirements of enterprise workflows.

In healthcare, the needs don’t often approach those of financial markets. In fact, the old saying is that in healthcare, any process taking less than 30 days is ‘real-time’. But as DLT solution designs move from proof-of-concept to production, the problem of scalability is becoming acute. In 2018, Hashed Health has begun work on a number of solutions which require scales beyond the abilities of many DLT platforms. In the DA Platform and DAML, we have found a reliable DLT platform that can accommodate transactional scales achieving 27,000 financial trades per second (which translates to 81,000 ledger updates per second) — the highest I’ve seen. This radical scalability has allowed us to begin designs to address the core payment infrastructure in healthcare — including fee-for-service claims processing, risk-based payment contracts, and other health plan and pharmaceutical financial workflows.

Our new DAML driven product: Signal Stream

Building on our experience with DAML, Hashed Health has recently announced a new healthcare contracting platform, Signal Stream. Built atop the DA Platform and DAML, Signal Stream enables clients to automate multi-party agreements and create an outcomes-based contract adjudication and management platform. This shared performance view is real-time and synchronized through a distributed ledger contractual engine. Addressable areas of healthcare include value- or risk-based contracts, procurement contracting, pharmaceutical rebates and outcomes-based payments and health plan administration. The platform works to:

  • Reduce administrative burden related to value-based contract automation;
  • Delineate value creation within agreements;
  • Offer real-time tracking of contract performance;
  • Achieve counterparty consensus regarding performance against contract value metrics and benchmarks.

DAML represents an essential innovative platform design, enabling enterprises to harness DLT within the business frameworks and realities of enterprises today. Hashed Health is excited to partner with DA to realize the promise of DLT for the healthcare industry.

Follow Digital Asset on Medium or Twitter, or join the community and register to download the DAML SDK Developer Preview at www.daml.com.

About the author

Corey Todaro, Chief Product Officer, Hashed Health

Corey Todaro is CPO of Hashed Health. Hashed Health is a healthcare innovation firm focused on accelerating the meaningful development of blockchain and distributed ledger technologies. Corey is at the forefront of blockchain and distributed ledger designs for the healthcare industry. He brings to Hashed Health experience in venture capital investing in the health IT space as well as a wealth of operational experience in large national health systems with a focus on the challenges of healthcare payment innovation.

About Hashed Health

Hashed Health delivers to payers, providers, and suppliers real technical blockchain product solutions focused on decreasing the cost of care and reducing the administrative inefficiencies. We offer strategic services to accelerate blockchain adoption and product development across the healthcare industry by providing subject matter expertise and strategic advisory services to innovative organizations looking to create new networks and redefine business models leveraging blockchain/distributed ledger technology.

Hashed Health Newsletter June 26 2018

 

 

 

Tipping Point: The Transformation of America’s Healthcare System

We are accelerating towards a healthcare financial crisis in the US.  For many families, it’s already here. In the last 10 years, US healthcare prices are up 22% (vs 17% for the general economy). US Healthcare expenditures are up 45% (vs 28% for the general economy). We have institutionalized a dangerous marketplace known for a lack of competition, obscure pricing and contracting, high administrative costs, and the consumer’s willingness to pay without asking questions or having answers.

The winners have leveraged the current design to profit in an irrational market.  Pricing variation, over-consumption and administrative waste are all someone’s profit margin.  These companies are emboldened by the infrastructure-heavy business processes that persist in healthcare.  These models rely on centralization of data and business models that aggregate and leverage consumer data for profit.

This will not continue another ten years.  The government, employers and patient customers are at a breaking point.  There is a crisis of confidence in foundational healthcare systems. There will be a dramatic shift, either forced or voluntary.

In March, Alex Azar of the HHS outlined his policy that focuses on empowering patients with their data, transparent pricing, value-based market structures, and removing government influences that impede value-based health. He told the Federation of American Hospitals, “There is no turning back to an unsustainable system that pays for procedures rather than value. In fact, the only option is to charge forward — for HHS to take bolder action, and for providers and payers to join with us. This administration and this President are not interested in incremental steps. We are unafraid of disrupting existing arrangements simply because they’re backed by powerful special interests.”

In response to these pressures we have discovered a potential answer.  Recently entrepreneurs and incumbents in the healthcare industry have embarked on an inviting new conversation that has the potential to, over time, fundamentally change our healthcare delivery model.  A growing community sees the chance of a lifetime to improve how healthcare is accessed, delivered and paid for. Work is underway to transform delivery through the convergence of healthcare blockchain, IoT, AI, machine learning, mobile devices, telehealth and precision medicine.  This technology cocktail leverages a disruptive combination of trust, transparency, behavioral economics, big data and automation. The hope is that we may enable the restructuring of inefficient, ineffective, corporate-focused value chains in healthcare.  Doing so could change the market structure under the feet of healthcare companies around the world.

Blockchain provides the foundation for this change.  Most people see blockchain as a new technology, often referred to as the “Internet of Value.”  What most people don’t understand is that its power for value-transfer disruption lies in the enablement of new business models and the blockchain’s ability to embed belief systems in to the software itself.  This combination of open source technology innovation, business model innovation and governance innovation makes it challenging to get right, yet potentially very rewarding for those who use it effectively.

Most people have not spent the time and energy to fully understand the convergence that is happening.  It takes a lot of work to fully understand the opportunities presented when you bring together new business models, new technical models and new governance structures.

With all the hype, it’s healthy to be skeptical.  Whether or not you believe in the technology, you have to admit that emergence of blockchain is creating an amazing opportunity to collaborate in new ways.  Collaboration begins with communication around ideas.  These ideas represent a refreshing new conversation in healthcare. It gives us a chance to imagine a world where we can stop repeating the mistakes of the past and stop repeating the same conversations around the obstacles that stand in the way of empowering patients, transparency, interoperability, value, and irrational market forces in healthcare.

For good reason healthcare is resistant to change.  Transformation won’t be easy.  In fact, it has never been done before. It will require us to shift our paradigm from a model that rewards the centralized business models that underpin many of the largest healthcare companies today.  It will require us to double-down on the shift from volume to value.  It will ask us to trust software protocols where we formerly trusted companies and middle-men.

In return, we can expect to see new ecosystems in healthcare arise that are in line with the needs of patients, employers and other communities.  These ecosystems will center around new types of market structures that provide more efficient access to health resources.  These new markets hold the promise of rationality and transparency.  Consumers can make choices based on information, cost, and a seller’s reputation for delivering value.  Innovative offerings can be listed on new exchanges by innovative sellers that reflect the needs of innovative buyers like the VA or Amazon, JP Morgan, and Berkshire Hathaway.

To succeed, we will use a variety of new distributed and decentralized protocols that embody the belief systems of their creators who come together around solving the industry-level problems borne of centralization. These parties (new and old) have already begun to collaborate and offer an alternative to healthcare’s current value chains that keep us locked in 1990’s-era pipelined processes where rent-seeking rules the day.  We are already building ground-up economies that use programmable value transfer to automatically respond to behavior, quality and outcomes.  We will no longer need to depend on infrastructure (ex. claims) that is not designed to support the important relationship between cost and quality.

The winning innovators will differentiate themselves based on trust, value and collaboration.  Across the globe, “minimally viable networks” are coming together to test production systems that solve old problems in new ways.  The early use cases focus on physician identity, patient identity, claims adjudication, consent, supply chain and payments.

Experts will tell you it’s just a matter of time.  It will happen network-by-network over the next ten years or so.  The decentralizing forces that have been unleashed cannot be held back.  Hiding from these realities is akin to hiding from the internet in 1999, but even more dangerous.  In the 90’s we were changing the container of the flow of information. Today we are changing the container of the movement of value and digital assets.  That’s a much bigger story that could shift the landscape in dramatic ways.  There will be companies who ignore the shifting market structures under their feet, possibly resulting in a new corporate extinction event in a relatively short period of time.

That might be what it takes to right-size a system that has outlived its design.  It also just might be our only viable alternative to the next US financial crisis.

John Bass is the Founder & CEO of Hashed Health, a healthcare innovation firm that focuses on using blockchain and distributed ledger technologies to solve unmet needs in healthcare.

Blockchain Rises at SXSW

SXSW 2018 BLOCKCHAIN

SXSW 2018 – STARTUPS AND TECH BLOCKCHAIN PANEL

South by Southwest (SXSW) has wrapped up in Austin, TX.  This annual 10-day convergence of music, media and technology that began in 1967 has grown over the years to become known as the conference of the year for creative innovation.  SXSW Interactive, the technology focused sub-conference has become the biggest, most important emerging technology conference in the world.  It is known as a breeding ground for new ideas and creative tech.  Among the trends that SXSW focused on this year, the two areas that garnered the most attention were AI and Blockchain.

Blockchain was a brand new addition to the 2018 lineup.  The conference had a series of sessions that focused on how blockchain will “revolutionize all data-driven transactional systems” in areas such as healthcare, entertainment, finance, mobility, and social good.   These sessions were led by top innovators such in the blockchain space.

 

 

Highlights included:

  • Joe Lubin (CEO Consensys) & Laura Shin- Why Ethereum Is Going To Change The World
  • Amber Baldet (Exec Director Blockchain Program at JP Morgan) & Brian Behlendorf (Exec Director Hyperledger)- Business on the Blockchain
  • Kathleen Breitman (Co-founder Tezos), Michael Casey (Sr Advisor Digital Currency Initiative at MIT Media Lab), Vinny Lingham (CEO Civic), and Paul Vigna (Reporter Wall Street Journal)- Bitcoin and the New World of Programmable Money
  • John Bass (Founder / CEO Hashed Health), Aaron Symanski (CTO Change Healthcare), Dominique Hurley (VP Strategic Partnerships & Innovation Healthverity), Beth Breeden (Assoc Professor Pharmacy, Lipscomb University)- Blockchain and the Crisis in Healthcare

Blockchain and the Crisis in Healthcare

Moderator:  John Bass (Founder & CEO, Hashed Health)

Panelists: Aaron Symanski (CTO, Change Healthcare), Dominique Hurley (VP Strategic Partnerships & Innovation, Healthverity), Beth Breeden (Assoc Professor Pharmacy, Lipscomb University

The crisis was defined by the group as largely a financial crisis of our own making.  The primary drivers of the crisis are prices and administrative burden.  Though blockchain is young and has its challenges, the panel agreed that the technology is an enabler because of its ability to address issues of trust, transparency and incentive alignment.  This can have a major impact in areas such as medical records, clinical trials, payments, insurance design, and behavior.

Blockchain-based medical records was a center of attention for a large section of the panel, as well as much of the Q&A.  While there was consensus around the medical records use case, there was some disagreement on how quickly this would happen.  This is certainly not going to be the first healthcare application on the blockchain to scale.  The benefits of carrying a longitudinal health record on your phone is most attractive to pockets of patients, not the general public.  Many companies have tried to tackle this problem over the years.  “What has the blockchain changed?” was a point of debate amongst the panelists.  Challenges still exist around data protection and consumer incentives.  The answers could take some time to understand.

So what projects will move more quickly?  The panelists focused this section of the discussion on Hashed Health’s Professional Credentials Exchange and Change Healthcare’s claims transparency product as two examples of 2018 initiatives that solve real problems in today’s world.

For Hashed Health, provider licensure and credentialing is the perfect initial use case.  It has an ROI.  It has an innovative “exchange” business model that does not threaten incumbents, and it does not deal with sensitive information like PHI.

For Change Healthcare, a product that can “accurately track, in real time, the status of claims submission and remittance across the complete claim lifecycle” has tremendous strategic value.  By starting with Change’s own claims process, Change Healthcare argues can begin a process by which they use blockchain to solve a real problem while learning about how to scale the technology out to a larger and larger network.

Other near term use cases discussed included Lipscomb’s collaboration with Hashed around creating a shared ledger for recording graduation data on the blockchain, where they are providing transparency to the market while reducing their back-office overhead associated with manual graduate verification processes.  Healthverity is working on a e-consent application that they feel can move quickly as well.

 

Nashville Panel

SXSW SPOTLIGHT ON NASHVILLE

Spotlight on Nashville

Also in the spotlight at SXSW2018 was the city of Nashville.  John Bass participated in a panel with Nashville-based technology leaders including Sal Novin from Cognizant, Kearstin Patterson from HCA and Lindsey Cox from LaunchTN.  The panel was filmed live for the Comcast SXSW Lounge series.  The topic Comcast wanted to discuss was Nashville as a healthcare technology innovation hub.

Nashville has become a national hub for the creative class, enjoying the competitive advantages of a creative culture, a well-educated population, and a thriving tech industry which has become a leading force in the region’s growth, with thousands of technology job opportunities in fields from music and entertainment to healthcare to enterprise software development.

A few stats, according to Brian Moyer of the Nashville Technology Council:

  • Per capita income above national average
  • Cost of living below national average
  • A national hub for the creative class
  • #1 in the nation for job growth from 2015-2016 – U.S. Bureau of Labor Statistics 9/17
  • #2 in the nation for job growth over the past decade – U.S. Bureau of Labor Statistics 9/17
  • Home to 18 publicly traded healthcare companies generating $38 billion in local economic impact and more than $84 billion globally
  • Home to one of the fastest growing technology sectors with 2,346 tech business (up 16% in the past year) and 41,233 tech workers
  • #8 hottest city for tech jobs according to Money Magazine 6/17
  • #7 in the country for the growth of tech jobs according to Forbes 8/17

Furthermore, Nashville specializes in healthcare. Nashville is differentiated by its impressive concentration of HIT assets that includes 40% of the investor owned hosptals in the US and over 4000 healthcare companies (18 of which are publically traded).

This sets Nashville up very well to be a center of gravity for the next generation of healthcare companies that will use technology such as blockchain, AI, ML, and IoT.

Healthcare is about to go through a wave of innovation unleashed by the convergence of these technologies.  This wave is coming at the right time as our government and our industries are being eaten away by healthcare costs.  The panel discussed these opportunities and how we plan to cap

In addition, the panel discussed how Nashville’s collaborative culture can help it harness this moment to bring together diverse resources around the health crisis.

Thinking of trying a blockchain project? Here are some must-do first steps

As healthcare organizations start to dip their toes in the waters of distributed ledger technology, the CPO of Hashed Health offers advice about doing it right. By Mike Miliard March 19, 2018 Blockchain is no longer the far-out and inscrutable mystery it once was. More and more healthcare professionals are starting to understand how it works […]