Last week for the Distributed: Health conference, over 725 healthcare and blockchain leaders from around the world converged in Nashville, Tennessee, to explore how blockchain technology is transforming the healthcare industry. Now in its second year, this groundbreaking conference brings together the brightest minds in healthcare innovation to reimagine how new technology will streamline medical records, payments, processing and analytics.
This year’s conference included a 24-hour hackathon, a two-credit continuing legal education (CLE) course, a code camp providing hands-on workshops for engineers, an investor roundtable and two days of panels and speakers. Since last year, the audience grew by 40 percent.
In this report we will recap and highlight conference events.
Hackathon (September 23-24)
(Report by Daniel Mangum, Software Engineer at Hashed Health and Hackathon participant)
Just 24 hours before the Distributed: Health conference, I was sitting in a small meeting room at Vanderbilt University with my fellow Hashed Health software developers. While most of the media from the weekend focused on partnerships announced at the conference, approximately 50 developers spent the preceding 48 hours creating the products which later drove many of the conference’s keynote speeches.
Blockchain-themed hackathons often attract a different and more varied crowd than other notable programming competitions. Teams are often comprised of people ranging from smart contract architects to business professionals. The expert judges are just as likely to have pioneered a new protocol from their parents’ basement as they are to have spent 20 years at one of the “Big 5” tech companies. This diversity breeds an atmosphere that revolves around experimentation and learning, rather than the development of common web and mobile applications. Decentralized applications (Dapps) introduce a new dynamic to development projects. While a social media application can be built out to its production state without a single user signing up, Dapps require an architecture that is just as reliant on the network as it is on its underlying technology.
Building network-reliant applications creates an accessible but potentially high-achieving product that may be more likely to revolutionize an entire industry or economic system than it is to sit idle in a public Github repository. The new wave of blockchain developers are dreamers. Unsatisfied with the current inefficiencies of centralized systems, we strive to bring fairness and trust to human spheres through technology. Blockchain technology application is inherently about the redistribution of power. For a new protocol to succeed, the community will demand the underlying code is be open sourced, available for the public to audit, critique and modify.
The project that we developed during our sleepless 24-hour adventure is an excellent example of these concepts. Our goal was to address issues surrounding wellness incentive programs. While many programs are solely funded by employers or insurance companies, we desired to bring these two parties together, while also creating an opportunity for unrepresented parties to participate. Building on Qtum (a platform that aims to combine Bitcoin’s consensus protocol with Ethereum’s concept of smart contracts), we deployed contracts allowing multiple parties to fund computationally measurable wellness goals, ensuring payout to program participants based on predefined metrics. Because one of the major barriers to production-level blockchain system implementation is the disconnect between back-end functionality and an effective user interface, we created an application programming interface (API) and React web application that allows users to interact with the contracts using their own wallet addresses.
Our application, called Collective, addresses a relatively niche situation. However, like most blockchain applications, it has the potential to change the lives of many, and that is something that often gets lost in noise and speculation.
This year’s conference was co-hosted by Hashed Health, BTC Media and Change Healthcare. David Bailey of BTC Media and John Bass of Hashed Health kicked things off before John introduced Change Healthcare’s CEO Neil de Crescenzo. Neil was certainly one of the most important speakers of the conference: in terms of large, thought-leading companies in the blockchain space, Change is quickly becoming the leader.
Change is also the world’s largest claims processors. While one might assume Change would be worried about how the blockchain could disrupt their business, this is not actually the case. Change recognizes the blockchain as a way to not only create new services (such as real-time claims management), but also strengthen existing resources. Perhaps the biggest news of the week was de Crescenzo’s announcement that Change is building a revenue cycle platform designed to help providers and payers process claims and payments more effectively.
Perhaps one of the best panels of the day was “The Future of Payment Models,” a discussion that followed de Crescenzo’s keynote. Ray Herschman (VP, Accountable Care Strategy and Business Development at Cerner Corporation), Francois de Brantes (VP & Director, Altarum Center for Payment Innovation), Aaron Symanski (CTO, Change Healthcare), and John Bass (CEO, Hashed Health) explored the limitations of the current payments infrastructure for value-based payments and benefits. The panelists discussed how blockchain technology provides an opportunity to create new systems that allow designers to embed rational economic principles and incentive structures into fundamental processes.
Another highlight was a series of product demonstrations, including a joint project by Hashed Health and the State of Illinois showing how the blockchain supports interstate licensure reciprocity. Cab Morris from the Illinois Blockchain Initiative provided an overview that was simple and easy to grasp for those who are fairly new to the topic.
Day one ended with an amazing rooftop party hosted by BTC and Pokitdok at the top of the Westin Hotel. The weather was perfect and the views of downtown Nashville were amazing. By the end of the night, many of the party-goers had entered the infinity pool. They shut down the bar before things got too weird.
Day two featured a number of interesting panels with impressive speakers addressing identity, public health data surveillance and pharma. The day two keynote speaker, Charlie Martin, gave an interesting and insightful overview of how the healthcare system’s design no longer works. As usual, Charlie did not hold back explaining the shortcomings of the system he helped create.
Other conference highlights:
- Major companies are rapidly entering the blockchain arena. Change, who in March merged with McKesson Technology Solutions and is rumored to be preparing for an initial public offering (IPO), is the first major company to make a major blockchain product announcement. This is the probably the biggest blockchain healthcare news so far this year.
- The pace of healthcare product development is faster than anyone expected. There are real projects underway, though nothing yet is being used.
- Traditional investors seem bewildered by what they are seeing and hearing from the crypto world.
- Initial coin offerings (ICOs) are coming to healthcare in a big way. There were at least five companies at the conference who are planning ICOs.
Hashed Health Investor Round Table
Contributors: Daniel Mangum, Ben Schecter, Les Wilkinson, John Bass
Alongside the Distributed: Health conference, Hashed Health convened an investor roundtable, held on the 28th floor of the Pinnacle Financial building inside the Bass, Berry & Sims office overlooking the Cumberland River. The individuals present represented a cross section of the venture capital industry, including institutional funds, corporate venture, family offices and angel investors. Various attendees focused on seed stage investments while others concentrated on Series A or growth. Some addressed healthcare or financial services while others took a more opportunistic approach. Also in attendance were representatives of the relatively new crypto hedge fund space.
The 30 or so attendees included Satoshi Fund, Crypto Asset Fund, Core Innovation Capital, Wildcat Venture Partners, NEA, BlueCross BlueShield Venture Partners, Meridian Street Capital, Nashville Capital Network, Jumpstart Foundry, FCA Venture Partners, Avondale Partners, Heritage, Cultivation Capital and many others.
The gathering’s purpose was to exchange ideas among individuals investing in companies that leverage blockchain and distributed ledger technologies to solve business problems. Series A investors confirmed that blockchain companies are of great interest but the pool of companies that meet their investment criteria, particularly around recurring revenue, is very limited.
Many of the group’s questions were directed toward representatives from the crypto hedge funds, especially Tim Enneking from Crypto Asset Fund and Kyla Kovalenko from Satoshi. As mentioned, these organizations are relatively new and reflect yet another innovation of blockchain. Rather than investing in blockchain companies, crypto hedge funds invest in cryptographic asset tokens, either in advance of a public token sale or on the secondary markets after the token is launched. While these organizations have been in existence for a relatively short period due to the novelty of cryptographic asset tokens, their returns have been impressive. That said, these organization fully recognized that due to early market inefficiencies, their success clearly occurred in a bubble.Long-term winners will bring a multi-disciplined approach combining aspects of traditional early stage venture finance with futures trading and, of course, technical acumen.