Point of View

What every Blockchain or Digital Platform needs to solve for Mass Adoption

Physical assets are rapidly being digitized and digital assets are being accepted everywhere, exchanged with new business... Read More

Blockchain can ‘redefine’ healthcare, Solve.Care CEO says

Blockchain has serious potential in healthcare to reduce administrative costs, eliminate fraud and combat waste, Solve.Care... Read More
Editor's Corner

Blockchain and the Federal Government

The recent selection of Jose Arrieta to be HHS CIO was widely applauded by Blockchain advocates. Mr. Arrieta has long been a Blockchain supporter in both talk and action at GSA and more recently as HHS...

Read More | See all blogs

The recent selection of Jose Arrieta to be HHS CIO was widely applauded by Blockchain advocates. Mr. Arrieta has long been a Blockchain supporter in both talk and action at GSA and more recently as HHS’ senior procurement official. Under his sponsorship, HHS Accelerate, a procurement tracking system, was the first Blockchain government project to get a security authority to operate (ATO).  Although he has only been in his new position a few weeks, Arrieta has already signaled that he is looking to expand Accelerate beyond HHS and is thinking of other blockchain initiatives.

There has also recently been an accelerating news cycle about various large industry players forming Blockchain consortiums to work together on Blockchain use cases.  For example, this month IBM, Merck, Walmart and KPMG announced a partnership for a drug supply chain pilot.  Aetna, Anthem, and HCSC also announced a joint Blockchain partnership earlier this year.

Is Blockchain, which started as simply as a remark in a line of Bitcoin code, and now the foundation of the cryptocurrency revolution, finally ready to live up to the hype that started several years ago?  Before we answer that question, let’s do a quick review of Blockchain and some key use cases that were envisioned for it in healthcare. The promise of Blockchain was first shown when it was introduced as the “permissionless” distributed ledger for bitcoin transactions. The inherent benefits of a distributed ledger with provenance, non-repudiation, and a single source of truth, while protecting the privacy of participants, seemed to be an ideal solution not only for the Bitcoin revolution but also supports innovative approaches for many use cases across multiple industries.  In healthcare, patient consent, drug and food supply chain management, clinical trials management, and prior authorization were among the most popular use cases proposed initially. However, additional use cases that truly disrupt healthcare delivery, such as tokenized economics and patient self-sovereignty, are envisioned but not yet realized.

Unfortunately, the promise ran into certain realities that slowed the hype.

  1. Building the business process and policy rules to facilitate the use of Blockchain is challenging.  Decentralizing process governance has huge cultural implications and data management capabilities that are difficult to address. This is compounded by the fact that many business cases simply don’t need blockchain.
  2. Which road to choose? There are multiple “flavors” of Blockchain out there and many organizations do not fully understand how to best integrate Blockchain into their lines of business. Understandably, this is complicated by marketing hype, and in some case religious fervor, to adopting “one chain to rule them all”, rather than have a technologically agnostic perspective on adoption, just like other solutions have historically been considered.
  3. Achieving industry lift-off. Tied to #1, getting a critical mass of large industry players engaged in doing pilots to test operational feasibility and scaling is difficult.  Large-scale adoption in any industry vertical is driven by large company buy-in and industry consensus.
  4. Supporting the life cycle. Creating the ecosystems that support end-to-end requires multiple committed partners.
  5. Crowning a champion. Getting high-level evangelists at companies engaged is a must to get the necessary funding, resources, and cooperation.

To better understand where the Blockchain revolution is currently, I asked an industry expert, Jim St. Clair, CTO of Dinocrates to provide his insights.  Jim has been a tireless advocate for Blockchain for years, is a much sought-after speaker and industry award winner on Blockchain technology and applications.  Here are Jim’s thoughts:

Tony - Several years ago, there was tremendous hype about Blockchain and how it was going to revolutionize many industries including healthcare.  Like many highly touted technology innovations, the hype far surpassed the reality.  Today, halfway through 2019, are you seeing progress in the health space, beyond just announcements of grand consortiums and publicized pilots by major vendors?  If so, what are the most promising developments?
Jim - Yes, the issue of the Gartner “Hype Cycle” comes up in every substantive blockchain discussion. The challenge for industry adoption isn’t from a dearth of activity. Certainly, the newest announcements such as the FDA-approved Drug Supply Chain Security Act (DSCSA) pilot projects are moving the ball forward significantly. Additionally, the continued evolution of blockchain in the asset tokenization and digital payments arena has big implications for healthcare – they just might not know it yet.
Tony - Recently HHS announced the selection of Jose Arrieta as their new CIO.  Jose has been a major champion of Blockchain both at GSA and HHS.  How do you see him in his new role helping to promote Blockchain in Federal health?
Jim - First, as someone who worked in the HHS Office of the CIO, let me offer some perspective. HHS represents the cabinet-level agency with administrative oversight to the parts of HHS most people know about, such as Centers for Medicare and Medicaid Systems (CMS) and the Centers for Disease Control and Prevention (CDC), just to name two. Jose’s role allows him to message and inculcate blockchain concepts across a spectrum of HHS IT activities, and provide guidance and assistance to CIOs at the HHS Operating Divisions to promote blockchain adoption. Jose has several advantages in this effort, as he has the foundation, he built at the Program Support Center (PSC) with “HHS Accelerate”, plus ongoing efforts in blockchain at FDA and CDC. CMS offers a huge opportunity that correlates more with claims management and application of crypto-assets that could guide benefits programs throughout the country.
Tony - Based on your observations, what health use cases will be the first to have significantly scaled implementations?  I’m talking about outside the supply chain ones that have been touted by the pharmaceutical industry.

Jim - That’s a great question, and still relies on some prognostication. You’ve certainly hit on one of healthcare’s biggest use case for decentralized transactions, that being supply chain management.

The challenge with healthcare is that various aspects of the industry that are all represented by different professions and industry groups – AMA, HFMA, HIMSS, AHIP, etc. To add to the fun, these groups/professions don’t coordinate very well with each other, so “end-to-end” solutions we may consider, such as the FDA and Pharmas are doing, aren’t as easy to define and gain acceptance.

Based on what I’m seeing, I think claims management has the greatest potential for adoption next, and this seems to be coming from a lateral approach through the insurance community. State Farm launched a blockchain initiative in property insurance that has parallels to healthcare claims, and I think this year should see some cross-over.

What’s next? There is a huge universe of blockchain start-ups offering solutions and data management, some going so far as to replace Electronic Health Records (EHRs). I think those companies offering solutions that help clinics and healthcare systems managing data from healthcare encounters that help manage the “transaction” of the patient data and clinical information. I don’t think that’s caught up in the hype cycle, but only is a matter of time to demonstrate its efficacy and gain adoption.

Lastly, the concept of patient self-sovereignty represents that opportunity most appropriate for blockchain that also presents the longest mile in adoption. Healthcare delivery is entirely centralized and arguable driven by regulations and customers that WANT it to be centralized. Centralized management means participants are bound by the guidance and direction of the “care administrator” (a persona which includes providers, administrators, and regulators). Just like Bitcoin set out to decentralize a globally controlled and centrally managed system of financial transactions, blockchain can provide patients/customers with the ability to manage their own healthcare transactions, on their own terms – who sees their data, what they do with it, and what the subsequent cost involved. I’ve been excited by this “bill of rights” for years, yet see a system still bogged down in medieval thinking (where the church as central authority dictated all aspects of life beyond worship) that patients aren’t willing to move beyond. I’m thinking the continuing “death spiral” of costs and scarcity of resources will drive new patient engagements that blockchain can support, the way financial markets are applying new transactions that are driven by blockchain as the foundation.

Our Publications

DistilNFO HealthPlan Advisory DistilNFO IT Advisory DistilNFO HospitalIT Advisory DistilNFO Retail Advisory DistilNFO POPHealth Advisory DistilNFO HITRUST Advisory DistilNFO Ageing Advisory DistilNFO Safety Advisory DistilNFO Life Sciences Advisory DistilNFO GovHealth Advisory