2021 will see a maturation of many of the novel solutions introduced in 2020. As a result of the pandemic, the ways we communicate, the ways we move and manage data, the ways we transfer money and the ways we invest will ultimately become a lot smarter as we fuse old and new ways of doing business.
Validating the identity and credentials of healthcare practitioners poses significant revenue cycle, recruiting, physician relations and access challenges for all healthcare organizations.
Our healthcare system is at an inflection point. The optimistic perspective is that it now seems more likely that the industry can come together to address many longstanding challenges that have traditionally limited our ability to deliver care in more efficient, effective ways. To succeed, innovators and enterprises need to shift from scaling up systems of record for enterprises to creating systems of shared record for collaborative networks. This transition represents the greatest healthcare opportunity in a generation.
At Hashed Health, our mission has always been to produce solutions that solve the most challenging problems in healthcare. We believe that the most impactful solutions over the next ten years are those that promote collaboration and shared value, which is why we have a specific focus on blockchain and distributed ledger technologies.
Before coronavirus, virtualization was trendy. A Global Workplace Analytics survey reports that remote work has grown by 159% over the last 12 years. The early adopters who moved to remote work reported improvements in productivity, employee retention, diversity, talent access, opex, and work-life balance.
Blockchain begins with the basics. In this episode, recorded at by Allscripts (@allscripts )at HIMSS 2018, COO of Hashed Health (@hashedhealth)COO Corey Todaro (@hashed_corey ) gives a brief primer on exactly what blockchain is and how organizations are already using it in healthcare. For more discussion on current uses and future ideas, visit chat.hashedhealth.com and join the Hashed Collective community.
The following is part of Hashed Health’s ongoing Resource Briefs explanation series. We have aggregated blockchain healthcare resources on our site that we believe are instrumental to understanding and designing the new future of health and wellness. Our past resource briefs have focused on the revolutionary Bitcoin and Ethereum white papers. Today’s brief explains why we look to Michael Porter for inspiration in redesigning our healthcare system. For more on Michael Porter’s background, click here.
The healthcare system in the United States has produced many miracles and scientific advancements in treating acute care injuries and sustaining life. Despite these advancements, we are not getting our money’s worth. Patients are faced with high and rising costs, restricted services, care that trails leading benchmarks, patient and quality cost discrepancies across the system, access issues, socioeconomic distress and many more concerning trends. How can this be possible in a country that spends $3.2 trillion on healthcare annually (), more than any other country in the world?
Michael Porter, the renowned Harvard Business School Professor, has done extensive research in the healthcare field and has pioneered the “Value Based Healthcare Delivery” framework. Porter’s framework focuses on the idea that healthcare systems should strive to deliver maximum value for patients. To the uninitiated, this value-based assertion may seem obvious, but in fact, our current healthcare system is not designed to promote value. Today, the fundamental health infrastructure we have in the United States is designed around fee-for-service transaction-focused healthcare. This infrastructure is not aligned with what most would agree is the core purpose of healthcare, which Porter defines as “Value for Patients.” When you accept this basic principle, it becomes clear that healthcare must shift from volume to value. The following guide will brief you on the current state of the healthcare system, Porter’s framework for creating a value-based system and Hashed Health’s vision for a new infrastructure for healthcare.
Instead of approaching care as an individual site, specialty or intervention, Porter espouses an approach that considers the patient’s medical condition over the full episode of care. From both a clinical and a financial perspective, the focus is on addressing the full set of results that matter to the patient, instead of the more narrow interests of each participating entity. In this model, outcomes become the driver of reducing costs.
In 2015, Porter introduced his value-based strategic agenda, which includes detailed analysis of the following concepts:
1. Re-organize Care Around Patient Conditions Using the Concept of Integrated Practice Units
2. Measure Outcomes and Costs for Every Patient
3. Move to Bundled Payments for Care Cycles
4. Integrate Multi-Site Care Delivery Systems
5. Expand Geographic Reach To Drive Excellence
6. Build an Enabling Information Technology Platform ()
In earlier research, Porter offered the concept of “zero-sum competition” ― a specific type of competition between parties that results in no net benefit ― as the explanation for our healthcare system’s contradictions (). In fact, according to Porter, zero-sum competition between healthcare system participants actually “divides value instead of increasing it.”
Healthcare companies and organizations are competing on vectors not aligned with the best interests of consumers; this drives the system away from fulfilling a patients’ actual needs. Instead of focusing on patient outcomes, healthcare competition revolves around shifting costs, creating bargaining power, attracting and retaining patients and restricting choices and services. This type of competition only leads to gains at the expense of another entity: or zero-sum competition.
When we talk about value-based care, we tend to focus on the U.S. system. However, in more recent research, Porter adds a global perspective to the conversation. The data shows that value-based conversations should not be limited to the U.S. ().
Similarly, variability in outcomes is also a shared concern.
Around the globe, we share a common interest to ensure advances of the value-based agenda in healthcare.
At Hashed Health, we are committed to building solutions that focus on patient outcomes throughout the entire cycle, and thus improve patient care and drive value-based care delivery. We believe that blockchain and distributed ledger solutions offer a once-in-a-generation opportunity to redesign the fundamental infrastructure in healthcare by embedding rational economics into health processes. This is a unique chance to align incentives and change behaviors that are central to the policies Porter describes.
Value is all about the relationship between cost and quality. The very concept of value-based care suggests a need to reconsider the technical infrastructure that has been created to support fee-for-service care. The merging of clinical and financial paradigms is challenging, especially to traditional for-profit health system CFOs who have built careers around the concept of “heads in beds” and systemic business incentives that pay more when patients return.
To make the shift from volume to value, we must consider the basic infrastructure that we are dealing with. One of a blockchain’s core concepts is that of programmed value exchange. Using the blockchain, we can design and embed economic systems in the patient’s full cycle of care. This will allow us to program value exchange based on behaviors, compliance to protocols and attestations from both sides of the “marketplace.” These mechanisms are not possible using fiat currency in today’s claims-based systems.
For example, today’s bundled payment programs have shown promise, but they are hamstrung by trust and administrative complexities that are a result of trying to force a value-based system on top of fee-for-service infrastructures. We believe there is an opportunity to demonstrate that with a new blockchain-based information-technology platform, we can advance Porter’s Strategic Value Agenda.
Several members of the Hashed Health team have a background in bundled payments: John at InVivoLink, Corey at Vanguard Health System, Les at Martin Ventures and Philip at Humm. We have had many productive discussions regarding these efforts; we now feel that while these ventures successfully innovated and improved how bundles are managed, they were intrinsically limited because they were developed or implemented on top of systems that were not designed for value-based care. Building applications on top of (or offering minor improvements to) traditional relational databases simply can’t address that core issue. Other examples of solutions that suffer from these limitations, as described by Porter himself, include:
● Prior authorization for expensive services
● Patient copayments and deductions
● Electronic medical records
● Evidence-based medicine
● Safety/eliminating errors
● Introducing “lean” process improvements
● Care coordinators
● Retail and urgent care clinics
● Programs to address generic high cost areas (e.g. readmissions, post-acute care)
● Mergers and consolidation
Restructuring health care delivery is necessary, not incremental improvements.We believe blockchain technology is the answer. We can now design our own economies and trust systems that support the value-based agenda. We can engage employers whose perspective on value is sorely needed. We can work to harness the power of outcomes and embed outcomes data directly in payment and incentive processes. We can use new IoT devices on the blockchain to understand what’s happening outside the clinic and between surveys (a current shortcoming for Porter’s Tier 2 and Tier 3 measures hierarchy). We can directly link payments and benefits. The possibilities are enormous, and great work is starting to bring about positive changes.
Hashed supports the work that leaders such as the Altarum Institute, the International Consortium for Health Outcomes Measurement (ICHOM), the Organization for Economic Co-operation and Development (OECD) and others are conducting to accelerate the value-based agenda. At Hashed, we are engaging in productive discussions with surgeons, providers, manufacturers, payers and other constituents around the world about how we can begin using the blockchain to advance the value agenda. This is truly a collaborative effort,t and we are immensely proud to be a part of it
Whereas Satoshi Nakamoto’s Bitcoin Whitepaper is often credited as a catalyst to the current blockchain revolution, the Ethereum Whitepaper was a dramatic breakthrough in unlocking the power of decentralized technologies. This guide is designed to introduce you to Ethereum, which was introduced to the world in 2013 by Vitalik Buterin. Ethereum is the second largest blockchain protocol in the world, behind only Bitcoin. Any person attempting to understand how future applications will sit atop of blockchain protocols should start with understanding Ethereum. To make that easier, we have created this guide to help you understand the Ethereum whitepaper.
Throughout history, banks and third-party institutions have existed to provide trust between multiple parties of a transaction. Bitcoin radically changed this construct, allowing transactions to take place within a protocol, without the need to depend on third-party entities (to read more about Satoshi’s Whitepaper on Bitcoin, click here). By moving trust from the intermediary to the protocol, Bitcoin changed the way money flows and set the stage for the Internet of Value. All the Blockchain initiatives we talk about today, including Ethereum, are a result of Bitcoin.
As world-changing as Bitcoin is, it does not allow for easy repurposing of the Bitcoin protocol for alternative blockchain applications. Developers were faced with a tough choice – go through the labor intensive process of creating a completely new blockchain, or attempt to expand past the limitations of the current protocol.
Whereas Bitcoin was specifically constructed to administer a specific use of blockchain technology, Ethereum was created to provide a framework to run all decentralized applications. Ethereum includes a Turing-complete programming language for users to create “smart contracts”, or arbitrary rules that dictate the execution of actions. The breakthrough lies in the inclusion of a complete programming language, empowering complete freedom for developers to build any application they wish.
Below is a brief outline explaining how the Ethereum blockchain works:
1. New transactions are sent to the nodes within the network
2. Nodes compile and store these transactions within a block
3. Each nodes works to solve an energy and computing intensive Proof-of-Work (PoW)
4. The node that first finds a solution broadcasts it to the rest of the network
5. Nodes accept the solution if it is valid
6. Nodes show acceptance by beginning to work on the following block
The process is extremely similar to Bitcoin. Algorithms regulate the difficulty of the PoW puzzles to maintain a constant frequency of block creation (about every 12-15 seconds). The winning miner is rewarded with 5 ether. This process has two main functions – it allows new Ether to be circulated without a central authority and it validates transactions in a decentralized manner. The mining process makes hacking nearly impossible, due to the sheer computing power that would be required to reverse prior transactions. However, we must note that Ethereum is planning to begin the transition an alternative mining process, Proof-of-stake. To learn more about Proof of Stake, here are a few good resources:
Most people know about Ethereum because of the Ether (ETH) token. With a market cap of ~$36B (as of 8/31), ETH has cemented itself as the second most valuable cryptocurrency, trailing only Bitcoin (BTC) in value (~$77B).
Although Bitcoin may be more well known, Bitcoin exists primarily as digital gold. Meanwhile Ethereum has become a platform for distributed computing, distributed applications, and digital tokens. In Vitalik’s words, Ethereum is “a fundamentally new class of cryptoeconomic organisms — decentralized, jurisdiction-less entities that exist entirely in cyberspace, maintained by a combination of cryptography, economics and social consensus.” In other words, it represents a whole new way thinking about and building systems.
Ethereum has largely been responsible for the proliferation of Initial Coin Offerings (ICOs) in the past year. Just in the past two months, these ICOs have surpassed early stage venture funding in dollars raised by startups. Whether or not the explosion in ICOs has created a bubble is up for debate, but the revolutionary effect of Ethereum as a catalyst for new blockchain applications is not. To date, over 850 currencies representing $44B in digital assets have been created since Ethereum set the stage. Many believe the ICO tokens are Ethereum’s ‘killer app.’ Now, any innovative development team can create and program their own unique cryptographically secure financial system with unique economic principles for incentivising behavior. To make things even more interesting, the tokens used can be fractionalized to support any level of micro-payment needed. The container of the current banking system can’t dream of doing that. It’s not just that you can build a new economic system, it’s that you can design it to out-perform any existing system on the planet. And, as a result, before our very eyes, we are watching as entrepreneurs change the way currency flows. Get ready…
At Hashed, we are very excited about what Ethereum has accomplished and the potential it holds for healthcare. We are using Ethereum and related technologies to build out various use cases and concepts. Smart contracts are fairly immature, but are showing tremendous promise in automating business processes and programming value exchange in our healthcare use cases. This will be an amazing 3 years for some of our favorite projects such as payments and care coordination.
Healthcare has seen its first ICO and we’ll see many more in the future. Personally we know at least four healthcare ICOs planned for later this year. If done correctly, the ICO model has the potential to help us tackle large, systemic problems that could not be accomplished through traditional means. If done incorrectly, the ICO model may actually stifle innovation and set back the industry. Let’s hope we do it right, because we have an amazing opportunity to help a lot of people.
- Assure Virtual Panel March 24, 2021
- Hashed Health Themes for 2021 January 26, 2021
- HFMA Article – Distributed credentialing: The new provider mobility imperative January 6, 2021
- The Shift to Systems of Collaboration December 3, 2020
- Meetups to Startups: Hashed Health’s Evolution to a Healthcare Venture Studio October 20, 2020
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