Blockchain and healthcare are not a pipe dream but need to be tested, doctors say

While there is a lot of hype about blockchain and healthcare, some industry insiders say such applications are not just a pipe dream.

As blockchain technology continues to gain traction, it appears to be a solution that can simplify electronic health record (EHR) management and health insurance, and it can also reduce the complexity of the system.

Yet despite its many advantages, entrepreneurs exploring these applications are still unsure whether blockchain technology will be the panacea for the healthcare industry’s problems, according to new interviews.

Dr. Alyssa Hoverson Schott of Sanford Health said:

“The healthcare industry cannot be real-time as it relates to claims,” she said in remarks at the Distributed Health Conference earlier this month.

Hooveron Schott sees about 39 patients a day, and between each visit she enters medical visit and procedure codes.

“I often don’t have time to enter the code,” she said.

Those codes are then sent to the insurance provider, who reviews the claim and negotiates the bill, a process that can take up to 90 days because of the back-and-forth between the hospital and the insurance provider.

The problem, in Hoverson Schott's view, is that these technology solutions don't really understand the day-to-day delivery of healthcare services.

She told CoinDesk:

“A lot of times these entrepreneurs are talking about things that aren’t actually feasible, and I don’t think they understand how busy we really are and how our underlying systems work.”

That’s not to say she doesn’t believe blockchain can solve problems in healthcare, but she questions whether startups can work well with traditional industries.

Medical industry concerns

Blockchain has also piqued the interest of other medical veterans, such as Dr. Nathan Holt, a former practicing physician who is now focusing on his two startups: SeqTech Diagnostics, which does genetic testing of foods, and TranSendX, a company that is applying blockchain technology to medical interoperability, with the goal of giving patients more control over their medical records.

He argues that health care providers, like financial institutions, have an incentive to keep patients' information private.

Holt is not alone in believing that health care providers will continue to be wary of new systems for storing data that could expose patient health records and lead to huge fines or even bankrupt some institutions.

Tech entrepreneurs encountered this kind of skepticism as they pitched their ideas during the conference.

Another reason healthcare providers are hesitant to embrace blockchain technology is that they have invested a lot of time and money in their existing infrastructure. Just as the financial services industry may not completely divest its legacy systems, healthcare providers are more willing to update rather than overhaul them.

In addition to this, most hospitals are now moving to Electronic Health Record (EHR) software.

“Other innovations are stagnant,” Holt said. “Blockchain is a cutting-edge technology that’s only three years old. It will take some time to come to fruition.”

The potential of drug source analysis

Rather than focusing on EHRs and insurance claims, Michael Gucci, a practicing emergency physician and founder of Bitcoin venture firm Fortress, believes blockchain entrepreneurs have a better chance in the drug provenance space.

He said that while counterfeit drugs are not a problem in the United States, they are a huge problem in developing countries, costing the industry tens of billions of dollars and causing thousands of deaths each year, according to the 2014 U.S. Health and Drug Benefits Report.

He said there are already companies working on practical solutions, citing Block Verify, which has recently been developing several pilot projects for drug provenance analysis, allowing medical professionals and consumers to scan QR codes on pill bottles and connect to the blockchain for verification.

As for streamlining the insurance claims process and the transfer of EHRs between providers, Gucci said it may take 10 to 15 years to develop.

“The hospital isn’t going to implement any huge changes right away, it’s going to take small steps,” he said.

Baby steps forward

This is consistent with Holt's idea that blockchain entrepreneurs should first develop systems for data integrity and drug provenance.

One example is Saavha, a blockchain startup that aims to verify the integrity of medical schedules. This is particularly interesting given the 2014 Veterans Affairs (VA) scandal and the ongoing problem of the VA’s falsified waiting lists.

This is also one of the problems that a US congressman has proposed that distributed ledger technology can solve.

Holt said the VA has a greater regulatory burden than most other hospitals. Much of its data must be encrypted, stored on a hard drive, locked in a cage and monitored by video 24/7. Yet the information can still be manipulated.

“People tend to focus on the big problems,” said Mathew Rose, a junior doctor in Ireland and co-founder of Saavha. “If you look at history, every problem is huge, and it’s the smaller problems within the larger problems that are easier to solve.”

For example, look at the development of medicine. Part of the reason medicine has been able to advance so far is that every medical researcher is solving a part of the problem, Rose said. In cancer research, some doctors focus on removing tumors, while others focus on inhibiting blood supply, and others study what proteins do.

In Saavha's practice, a hash of the agreed data is stored on the blockchain, which can prove that the data has not been changed. This problem also bypasses one of the core criticisms of blockchains, that they are inherently slow databases and are not good at storing large amounts of data.

However, there is an argument that these centralized databases could benefit from other less immediately viable blockchain applications.

Adrian Gropper, chief technology officer of the nonprofit Patient Privacy Rights, believes that these centrally stored data need to be drastically reduced. Today, centralized medical databases contain 5 million to 10 million patients, he said.

"We've created a honeypot of 10 million patients, and the number of staff at these hospitals who have access to these records is about 50,000 people. These systems are completely opaque to the users," Gropper said.

This is already a big problem in the healthcare industry. Last year, fraudsters pulled off the largest healthcare hack in history, exposing the data of more than 78 million people. In March, MedStar, the clinical information system for 10 hospitals, was hacked and had to be taken offline.

This is likely to continue, as healthcare data is estimated to be nearly 100 times more valuable than credit card information.

“Really, the only hope for managing this type of personal information is to distribute it across a diverse group of holders, and blockchain will play a central role,” said Gropper, who is building HIE of One, a patient-centric blockchain platform for medical records.

In his opinion, blockchain can be used as a storage for identity data.

The long road ahead

In reality, it may take a lot of time for the healthcare industry to experiment and implement this technology.

The medical industry is unlikely to undergo a radical change, and will instead opt for a cautious, piecemeal approach, which is arguably a safer and more desirable option for healthcare to adopt blockchain applications.

Rose believes that from this perspective, technological solutions also need to prioritize patient safety, which he says remains the core mission of the industry.

He explained:

“The medical industry loves this technology, but it has to be safe. No one wants to put their loved ones at risk because their doctor decided to use an unproven technology.”