What It is: You’ve heard of bitcoin, that magical digital money not attached to any national economy or banking system? Blockchain is the technology behind it. It’s a clever extension of existing encryption techniques that enables trusted, secure transactions of any type, even with total strangers, even without knowing the identity of the counterparties — all with no central institution holding the keys.
Why It’s Important: Think of the pain points of healthcare right now. It is struggling to grow beyond a cottage industry based on simple fee-for-service billing into an integrated industry serving populations. It needs new ways to share risk, income, and information across multiple providers, while the partnerships, the payers, and the individual customers continually shift. How do they share that income and risk? How can they do that securely and transparently? How can they share patient data, both individually and in aggregate? How to link up everyone who contributes to a successful outcome across institutions and networks, get everyone paid appropriately, and make sure everyone is accountable?
The healthcare of the future, as it is grafted onto the healthcare of the past, is a vastly more complex transaction environment, with higher expectations than any other industry. Mis-identifying a patient or even a transaction, even mis-placing the decimal point on a prescription, or being unable to tell who made what change to a transaction or record, can have disastrous consequences for the patient, the physician, the institution.
Blockchain technology is a way to make every transaction, order, and patient record instantly transparent to all parties, owned by all parties, with built-in error correction and accountability, without having to trust any central database or institution.
Here is a report on its use in healthcare from Deloitte.
Will it work? In the future, yes. In fact, it is a prerequisite for any future that can move healthcare beyond its current stuck, ineffective state toward a better, faster, more available and far cheaper state.
Two things stand in the way.
First, the technology is not currently mature enough. It can serve for financial transactions, but for the huge amount of data involved in medical records and medical finances, across tens of thousands of institutions and hundreds of millions to billions of patients it must be extended and strengthened.
Second, most of the institutions of healthcare have shown that they do not want true transparency and accountability.
Blockchain technology would greatly help the system and the customers and the future state of today’s institutions, but not today’s institutions as they are still trying to work the rules of the old fee-for-service code-based economy.