BLOCKCHAIN IN HEALTHCARE: WHERE IS THE BUSINESS VALUE?
When looking at distributed ledger technologies, there are usually two types of use cases: the ones that optimize and improve existing systems and processes and the ones that create entirely new economic models. Both scenarios can bring value and opportunities to healthcare business if pain points are correctly identified and if solutions take into account the specificities of the industry.
The ecosystem includes over 200 startups building blockchain solution in healthcare, among which more than half are working on ways to share and secure medical data. Although the majority of these companies are still at an early stage of development, they have triggered a growing effervescence in the industry. For the first time, big corporations have started questioning their traditional business models and looking for opportunities outside their comfort zone.
This wave of enthusiasm isn’t entirely brought by blockchain technology, but rather by the digital health revolution as a whole. Every stakeholder in the healthcare industry can see parts of its traditional business disrupted by Artificial Intelligence, IoT or Augmented Reality, to name a few. Blockchain, adds to this excitement by creating a trustful frame to share and secure sensitive information.
Pharmaceutical companies focus on long-term use cases
Blockchain technology is often seen as a long-term investment for companies in the healthcare industry, especially Big Pharmas. Indeed, research suggests that there are three main areas where blockchain could have a real impact in 3 to 5 years:
- Clinical trials: blockchain technology will allow stakeholders taking part in a clinical trial to verify the authenticity of a document whether it is a consent form or scientific results. Moreover, patients will be able to securely share real-life data with pharmaceutical companies in exchange for a reward.
- Supply chain management: There is growing interest around the use of blockchain combined with IoT to track the evolution of physical variables like temperature, humidity or pressure down the supply chain.
- Quality control: Tests are done on a regular basis in the pharmaceutical industry to track the level of quality of a certain product. This process can be facilitated by storing data on an easily auditable ledger using blockchain technology.
Creating value on the short run
Blockchain technology can also bring strategic value on the short run if businesses follow three simple rules:
- Correctly identify pain points: although it seems obvious, many companies address use cases that do not reflect their real pain points. The ideation process is therefore particularly important as it allows to identify valuable applications that are specific to the company.
- Take into account existing regulation and standards: today, most projects fail to go into production because the regulatory barriers have not been taken into account during the experimentation phase. Moreover, the lack of standards involving blockchains discourages companies to take a stand and invest in new projects.
- Improve first, disrupt later: on the short term, most applications will be optimizing existing processes rather than creating new disruptive practices. As such, it is essential to identify simple friction points that could benefit from the use of blockchain technology. This will allow the ecosystem to gain new skills and truly understand the functioning and use of the technology.
Upgrade vs. disrupt
Distributed ledger technologies have the potential to change processes across a wide range of industries. In healthcare, use cases can be classified in two categories:
Upgrade the business: this category includes all the applications that improve and optimize existing structures with the objective of reducing costs.
- Payments: as a decentralized technology, blockchain can remove middlemen and facilitate transactions between companies.
- Record keeping: healthcare organizations are well known for their obligation to keep a record of their activity whether it is in the pharmaceutical industry or in hospitals. A transparent and immutable ledger can greatly facilitate audits and internal processes.
- Proof-of-existence: healthcare providers are sometimes sued by patients when they believe that professionals haven’t respected their engagements or done their work correctly. By storing a digital print of the documents reflecting their actions, organizations can provide incontestable proof.
Disrupt the business
- Data management: blockchain technology can put patients in charge of their personal data. As such, they can decide if they want to share it, with whom and when. This can represent a good opportunity for healthcare professionals to share information with one another without having to lose time collecting data each time they meet the patient. Regarding the pharmaceutical industry, the concept of “reusable data” represents the opportunity for the patient to share his/her information with multiple companies at the same time and get rewarded for it.
- Funding: ICOs represent an opportunity both for startups and large companies. Indeed, this type of funding has created new models for big corporations to invest in emerging companies and support them in creating value.
- Incentivizing behaviors: at the age of preventive medicine, companies and healthcare professionals can use blockchain-based tokens to incentive their patients to pursue a healthy lifestyle. This approach is already being tested by insurance companies.
By making information transparent and immutable, blockchain technology creates trust in a network of stakeholders. In an industry like healthcare where trust is essential, this technology can greatly improve the image of health organizations and their relationship with the patient. Last but not least, it can create a favorable climate for the adoption of other technologies and be the source of new solutions with value both for the patients and for the industry.