Is It Too Soon for Blockchain in Healthcare?

Blockchain generates a lot of hype and more than a little notoriety because of its ties to cryptocurrencies. While the healthcare industry understandably seeks to avoid hype and notoriety, and mostly waits for emerging technologies to prove themselves in other industries, ignoring blockchain would be a mistake. The main reason is that it alters the strategic mindset: It offers a fresh perspective for solving some of the vexing business challenges in health IT. In a fragmented health system, the business challenges swamp the technical ones.

An example of how blockchain alters perspective is illustrated in a new white paper, Crowdsourcing Provider Directory Maintenance, written by a team led by Kyle Culver of Humana and Andrew Beal of Ernst & Young. Kyle was one of the winners in the 2017 Blockchain Challenge sponsored by HHS’ Office of the National Coordinator for Health IT. In the paper, the authors examine how to keep provider directories current through a blockchain lens.

In setting up the problem, the authors observe that health plans currently manage separate provider directory silos that are rife with inaccuracies. Provider demographics can change so rapidly that it is hard to keep these directories up-to-date. I’ve seen how quickly the accuracy of this data erodes. In just the last six months, my mom’s internist retired and closed his practice, his associates moved to another practice, and my doctor is leaving her current primary care practice to start her own practice. Keeping up with these changes requires some kind of flagging system, which doesn’t really exist right now. Even when plans hire vendors to conduct provider outreach to confirm and update provider information, inaccuracies persist, without a lot of accountability. As a result, plans are less likely to leverage their provider directories as an asset for linking data transactions and powering new digital services, leading them to forego opportunities to improve member experience.

Competitive dynamics may be the root cause for why health plans maintain redundant data silos; in doing so, they are paying for duplicative services that yield poor quality data. These costs would drop and data quality would improve if plans could eliminate these redundancies. Imagine a global provider directory that providers could update – just once. Instead of being a sunk cost, data in the directory would become a propellant for digital services that make members’ lives easier. Mobile app features would extend beyond search queries to include appointment booking, virtual health visits, and member-directed exchange of electronic health information. Competing on the basis of redundant silos is a race to the bottom. Competing on how to take advantage of high quality data from a global resource — that’s differentiating.

Relatively speaking, building a global provider directory isn’t technologically complex if plans chose to cooperate, because the data formats and repetitive, low-value tasks to update provider information can be standardized. But agreeing to cooperate and defining standards are just technical solutions. They don’t solve for underlying business questions: Who maintains the registry? Who bears the cost? How are those costs apportioned? Who updates provider data? Who ensures the data is accurate?

Culver, Beal and their co-authors answer these questions in a model for a “crowdsourced, incentivized provider registry marketplace” that is conceived on the blockchain architecture. In blockchain, contemporaneous data transactions get processed, timestamped and hashed into immutable blocks of information. As each block attaches to other blocks on the blockchain, the blockchain gets propagated across a network of business partners that collectively maintain a distributed ledger. These distributed ledgers represent the core blockchain infrastructure. It is designed to increase data integrity, data availability and system resilience. Any attempt to compromise the blockchain on one ledger is detected by the distributed network. It is very difficult to mount a simultaneous attack across a distributed ledger . Moreover, if public-private key encryption is also used, access to information located on the blockchain is further protected from impermissible disclosure.

For the authors, blockchain facilitates a market-based solution to the problem of maintaining provider directories. They envision a global provider directory as a shared, distributed marketplace, and each update to the provider directory as a unit of work with intrinsic value. The distributed ledger is the infrastructure for this marketplace, which could be maintained by health plans or a technology vendor partner. Consenting participants in the marketplace consist of payors, sellers, validators and the distributed ledger network. Plans pay for each update because they are best positioned to extract value from an up-to-date global provider directory. A diverse collection of vendors could be sellers that are compensated for producing data updates on the provider records. Plans would also pay vendors to validate these updates. Each of these data transactions (data presentment, payment, data validation, payment) also generates a separate processing fee to the business network that maintains the infrastructure/marketplace.

Each of these transactions are recorded in the blockchain, and are transparent to all of the market’s participants. With transparency comes accountability. Sellers who present inaccurate information will see their reputations decline. Conversely, sellers who develop reputations for presenting accurate provider updates may be able to negotiate higher rates of payment. The marketplace provides incentives for some sellers to specialize and build businesses, but it also harnesses the curious efficiencies of crowdsourcing, which not only keeps prices down but may achieve superior outcomes – in this case, better data quality. For test cases that don’t concern particularly sensitive information, it’s exciting to contemplate injections of the gig economy in some corners of healthcare.

Overall, the model gives equal weight to financial sustainment and technical feasibility as screens for identifying test cases. With blockchain providing the base case for financial sustainability, provider directory maintenance is an appealing first-generation test case because the data involved is not particularly sensitive, and lends itself to standardized data formats and workflows.

Of course, most healthcare CTOs will have an immune response to blockchain; the technology needs to mature, and the industry is still trying to migrate data and systems to the cloud. Even if blockchain as a technical solution is a non-starter, Kyle and Andrew’s white paper illustrates why blockchain serves an important role in reframing perennial health IT challenges as business problems. As David Brooks once observed, “The roots of great innovation are never just in the technology itself….They require new ways of seeing.”