A blockchain is essentially a database in the form of what’s called a distributed ledger. That is, information is distributed across a network of participants. The participants can see activity on the ledger, but no single party controls it. Once data is in the blockchain, it can’t be changed. New information is timestamped and linked to the previous entries, making the blockchain auditable and secure.
Blockchain is probably best known as the technology that supports bitcoin, but its potential goes well beyond cryptocurrency. Innovators see promise in using a trusted, shared database of transactions for payments and money transfers, records and verification, to reduce risk and fraud.
The technology, while still evolving, is becoming mature enough that some states have announced that blockchain would be treated similarly to existing electronic record systems. This development should encourage broader acceptance of blockchain applications.
Steve Betts, chief information officer for Blue Cross and Blue Shield Plans in Illinois, Montana, New Mexico, Oklahoma and Texas, explains why health care innovators are excited about blockchain.
The perfect fit
Some experts also believe blockchain has the potential to revolutionize health care.
“The reason all the hype is there is because if it works, if it’s true — if half of it is true — it has the potential to fundamentally change market structures and the movement of value,” says John Bass, founder and CEO of Hashed Health, a company focused on solving problems in health care with blockchain technology.
“There’s so much potential to improve how care is delivered and paid for, and that’s got everyone very, very excited,” Bass says. “Part of what’s driving all the cost and quality problems is fundamental issues around trust, transparency and sense of alignment.”
That’s because the health care industry has so many different parties — insurers, doctors, hospitals, consumers and more.
These groups have their own data, and it’s often a struggle to share accurate, up-to-date information in a secure way. That’s what blockchain was designed to do.
And innovators are taking notice. More blockchain initiatives are focused on health care than any other sector, according to a report from the Stanford Graduate School of Business.
Bass is particularly excited about blockchain’s potential to shift the health care industry toward true value-based care — paying for care that improves patients’ well being and rewarding physicians for quality instead of the quantity of services they provide.