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How blockchain could solve 4 major problems in healthcare

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The healthcare IT industry faces a host of challenges today, including silos within hospitals that restrict information sharing, integrating artificial intelligence into clinical practice, to solving the opioid crisis. While distributed ledger technologies such as blockchain won’t mitigate all of them, this technology can resolve a number of significant pain points associated with routine business processes.

Blockchain is best suited to solve problems in healthcare that result from the following conditions: the need to share data in real-time across multiple participating parties, a lack of transparency, a requirement to verify the integrity of data and the need for a high standard of security.

Much of blockchain’s value in healthcare stems from “smart contracts,” which effectively organize the terms of an agreement between two or more parties into lines of computer code. Because smart contracts implement an agreement’s business and legal rules into code via a shared, decentralized distributed ledger, they facilitate transactions among various entities without the need for an external enforcement mechanism or central source of authority.

As a result, blockchain enables ordinary healthcare business processes that are tedious, manual, error-prone and redundant to happen in real-time, accurately and securely.

Here are four use cases for everyday healthcare business processes that can be improved using blockchain.

Payer-provider data sharing. In an increasingly value-based ecosystem, interoperability issues between separate medical information systems have long frustrated payers and providers—and virtually all stakeholders in the health system—by creating difficulty in exchanging clinical and claims data. As a result, it is very challenging for multiple payers and providers to view and share patient data while simultaneously maintaining a comprehensive and up-to-date record of a given patient’s diagnoses, medications and treatments.

With blockchain, all permissioned participants in the care delivery process can continue using their own information systems while also sharing patient records. Blockchain provides a single source of truth (a shared ledger) that can’t be altered. This single source serves as a master record of all transactions, detailing the who, what, when and where of the information associated with each transaction. In this context, think of each transaction as any update to a patient record, for which multiple parties need real-time data sharing.

Revenue cycle management (RCM). In healthcare, RCM differs from other industries in one important way: billing and payment processes move slowly and require more time to resolve. In the claims settlement process, payers and providers squabble over issues that result from the inability to address real-time information at the point of service, such as questions about patient eligibility or patient financial responsibility.

For providers, this back-and-forth sometimes leads to the costly problem of claim denials, 90 percent of which are estimated to be preventable. Using smart contracts, blockchain offers an avenue to alleviate the problems of slow payments, denied claims and patient data sharing.

Using blockchain technology, key patient and payer information such as eligibility and benefits, as well as applicable contract rates from fee schedules, smart contracts can accomplish at the point of service what often takes months through the traditional RCM process.

Referral management. Provider groups often manage referrals via laborious manual steps involving a combination of paper, phone, and email-based communications that cost time and money. This mishmash of communications can lead to errors and other negative effects such as delayed care, unscheduled appointments, duplicative and costly tests, and frustrated physicians and staff.

Many of the challenges related to referrals can be traced back to poor communication and can largely be addressed through automating the referral process. Blockchain provides an excellent method of automating referrals because it permits secure, real-time data exchange among different parties, lessening the likelihood of errors, discrepancies and missed connections.

Under a blockchain scenario, each key player in the referral process (providers, staff, payers and care team members) has access to real-time information. All participants are alerted to events along the continuum of care, meaning referring physicians stay informed of whether patients have—or haven’t—obtained prescribed treatment, medications and tests. Further, because provider groups have more real-time insight into referrals, they’re able to reduce network leakage.

Supply chain management. Blockchain’s ability to connect multiple parties around shared data that is updated in real time makes it the “killer app” for supply chain management, providing enhanced insight into provenance and chain of custody.

Complete traceability across the supply chain is essential to the successful execution of clinical trials, as an example. In many clinical trials, thousands of biological samples are collected from different sites over sometimes an extended period of time, which often creates complications such as excessive manual data entry work, frequent opportunities for error and difficult end-of-study reconciliation.

Today’s supply chain management industry standards lack technology that offers a single-source, real-time record of all transactions to all relevant participants—manufacturers, intermediaries and customers—according to a 2018 report from Accenture. Through blockchain, a “master ledger” can be created that reduces processing costs by offering a single, authoritative real-time view to all clinical trial participants, and enhances confidence and trust.

It’s important for blockchain evangelists to acknowledge that, while the technology holds great potential to increase efficiency in many areas of healthcare, it isn’t the be-all, end-all solution. For example, blockchain works well to facilitate the transfer of electronic health records but is not a replacement for EHR systems.

While a number of compelling use cases, such as those discussed earlier, exist for blockchain’s application to healthcare, we are still in the early days of discovering how we can harness this promising technology for the ultimate goal of lowering costs and improving outcomes for patients.

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