When most think of blockchain, they think of Bitcoin, the cryptocurrency that has been in the spotlight for more than 10 years. Initially, Bitcoin was thought to be destined to augment, if not replace, "fiat" currency—a vehicle to securely and anonymously store value and effect transactions without the need for a central clearinghouse or source of truth. Then Bitcoin became a speculative asset traded by hedge funds and discussed at cocktail parties. Most recently, the bubble in Bitcoin, which peaked at $17,555 in December 2017 and crashed to just over $6,000 today, has garnered media attention. As all of this occurred, the focus on cryptocurrency shifted attention to blockchain, the underlying technology that enables Bitcoin and its application in healthcare.
According to a May 2018 Wall Street Journal article blockchain was first theorized by a Bell Labs physicist at a Friendly's Restaurant in New Jersey in 1990.1 Fast forward 27 years to the 2017 HIMSS conference in Orlando, which in many ways was the coming-out party for blockchain in healthcare. Blockchain was validated by IBM CEO Ginni Rometty, whose hour-long keynote speech and Q&A session made several references to blockchain, and who said it would have "a profound impact on healthcare." We observed at least one panel discussion, and there may have been more, with respect to blockchain's applications in healthcare at the 2017 conference.
In the ensuing year, more than 30 healthcare blockchain technology companies raised hundreds of millions of dollars2 (yes, fiat currency) in initial coin offerings (a fundraising method very different than a traditional IPO) largely outside the purview of the SEC. As mentioned above, Bitcoin went on to become a household name in 2017. By the 2018 HIMSS conference, Bitcoin had traded down to below $10,000, but blockchain was top of mind for many attendees. We counted at least five separate blockchain-related events at HIMSS 2018.
Wikipedia defines blockchain as "...a continuously growing list of records, called blocks, which are linked and secured using cryptography. Each block typically contains a cryptographic hash of the previous block, a timestamp and transaction data. By design, a blockchain is resistant to modification of the data." It is "an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way."
Because blockchain enables both data security and data transparency, it has been presented as a solution to many of healthcare's most vexing problems - data-interoperability, medication adherence, physician satisfaction, healthcare consumerism and elimination of waste and fraud, to name a few. It has already been adopted with some success in industries such as fintech, insurance underwriting and supply chain management. Technology companies such as Alphabet and IBM have major initiatives in the area. In April, Humana, Multiplan, Quest Diagnostics and UnitedHealthcare announced a pilot program applying blockchain technology to improve data quality and reduce administrative costs associated with changes to healthcare provider demographic data. The FDA has launched a pilot program with four major hospitals to test blockchain's ability to share data. While the sector is ever slow to adopt the latest technologies, the promise of blockchain suggests the inevitable adoption, in some form, within healthcare.
A quick survey of the current state of health records demonstrates a problem for which blockchain might provide a solution. An American adult is unlikely to have one complete medical record. Records generally reside with the healthcare provider, so any number of providers—pediatricians, hospitals, primary care providers, dentists, dermatologists and other specialists—can have a portion of an individual's medical history, most likely siloed in their own EHR platform. Even if a provider is inclined to share data, securely sharing Personal Health Information (PHI) is complicated. As a result, an individual's records are inevitably incomplete, data is scattered and no one has a single, longitudinal health record accessible at every point on the continuum of care.
Blockchain to the rescue! Imagine the possibilities if, via blockchain, all of an individual's medical records could be readily accessed by permissioned clinicians, researchers and patients in a HIPAA compliant, cybersecure fashion. Physicians could make clinical decisions with complete knowledge of a patient's medical history. Patients could manage their own medical record. Clinical research could be expedited by accelerating patient recruitment and enrollment, trials could be easily replicated and results verified and easier to reproduce. Physician and patient satisfaction improves, quality goes up, cost goes down, and eureka—blockchain has achieved the Quadruple Aim!
Not so fast. Cryptoskeptics argue that blockchain will not become as pervasive as its advocates insist. The cost to store data on a blockchain is high, so it may not be practical for storage of EHRs, imaging records and other PHI. There is no interoperability between separate blockchains, limiting data transfer opportunities. Security claims may be overstated and future computing power could render blockchains hackable.
We don't know which camp has the better argument, but we are intrigued by how the technology could impact revenue cycle management in the future. Here are four examples:
Credentialing: Duff & Phelps' September 2016 Healthcare IT Report discussed the importance of credentialing, privileging and enrollment on the revenue cycle. Credentialing is the process that verifies a physician's qualifications to practice and be reimbursed for performing specified services in a specified setting. It involves gathering education, employment and other professional information of a physician. It is a complicated, expensive and time-consuming process—the industry averages 90 to 120 days to enroll a physician with providers and payors, and until enrolled and on-boarded, the physician cannot bill for services. The entire credentialing and enrollment process must be repeated when a physician moves to a new hospital or enrolls with a new payor or when the hospital with which the physician is affiliated is sold. A lengthy enrollment period can cost hospitals thousands of dollars per physician per day in foregone revenue. Blockchain could be used to confirm credentialing information the first time it is requested and to confirm, when subsequently requested, the continued validity of the information. In the case of a hospital acquiring another hospital with a 500-physician group averaging $2,000 in facilities fee charges per day, accelerating the credentialing process could accelerate revenue by $1 million per day.
Provider Data Management: Provider directories are used by health plan members to find in-network physicians. Physicians are in-network with multiple plans, and each plan administers its own provider directory, resulting in duplicative efforts to maintain directories. Unfortunately, the provider records in directories are often error prone and out of date. A recent report by Humana laid out a blockchain-based approach using smart contracts (a transactional protocol written in code that can self-execute when contract terms are met and verified) that would improve the quality of data and efficiently distribute data among users. The report estimated that an approach like this could save the U.S. healthcare industry more than $1 billion per year.
Instantaneous Claims Adjudication: Blockchain could be used to provide the instantaneous verification of a claim. Using smart contracts claims could be instantaneously adjudicated and paid upon submission to the payor, reducing denials, and secure payments could be triggered, eliminating the need for a clearinghouse. According to CMS, 26% of all claims processed are rejected and 40% of those denials are never rebilled. CMS asserts that providers can increase total collections by as much as 7% by managing claims more efficiently.
Patient Matching: Patient matching is the first step in attaining a truly interoperable medical record. The problem is threefold: The amount of data being collected in EHRs is growing exponentially, data is being collected in multiple EHRs in disparate formats and standards and demographic data is constantly changing. During the ordinary course of life people change their names (marriage, legal name changes), use their middle initials, adopt hyphenated last names and change their addresses. A single source of truth could eliminate the problems that arise from inaccurate patient matching: duplicate tests, unnecessary procedures, medical error and increased denials, to name a few.
When discussing the hope for blockchain in healthcare, a friend who is a chief medical officer and transplant surgeon reminded us that blockchain won't cure cancer or create world peace. He is, of course, right. But while this technology may be overhyped, it could make a difference—perhaps initially at the edges and then at the core of revenue cycle management and healthcare IT. IBM, Alphabet, Google, UnitedHealthcare, the FDA and many others are invested in this technology. Blockchain could become part of every EHR and RCM company's strategy for addressing the needs of the U.S. healthcare system over the next decade.
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