What is the “blockchain” and how does it apply to healthcare?
Note: this article was originally published on KevinMD. The content is original, and the thoughts are my own.
In 2016, I was at an angel investor’s conference in Las Vegas when I met a certain individual pursuing their MBA at Stanford University.
We got to talking about angel investing, and the term “blockchain” was mentioned.
I asked, “the blockchain: that’s Bitcoin, isn’t it?”
“Oh no,” was their reply, “Bitcoin is only the beginning of what is to come.”
They further added, “the blockchain is going to change the world in ways you can’t even start to fathom. It is going to be even bigger than the internet”.
Having lived through and witnessed the birth of the internet, the tech boom-bust cycle, the Amazon e-commerce boom, and the continuing evolution of companies including the likes of Google, YouTube, Facebook, to the birth of social media, artificial intelligence, streaming video, IoT, to the gig and sharing economy with Uber, Airbnb, and DoorDash, I have seen the potential that the technology sector has on transforming the world for better (or for worse).
Since 2010, I’ve been a huge proponent and an early adopter of blockchain technologies when I started purchasing Bitcoin and other digital currencies as a component of my overall portfolio investment strategy.
To be clear, I don’t consider Bitcoin and digital currencies as investments, and I don’t advocate the average physician purchasing cryptocurrency unless they know what they are getting into and have the necessary risk tolerance.
Bitcoin is a highly volatile and speculative digital currency and is still in its infancy. It has an asymmetric risk-reward profile meaning that it can either go boom or go to $0. Think about the rise from $0.01 to the current high of $19,403.59 at the time of this writing. As we’ve seen over the last several years, it still has a long way to go before reaching the “tipping point” where it is widely accepted and adopted by mainstream society. There are both opponents and supporters of Bitcoin, but only time will tell with all innovative, potentially disruptive technologies.
However, I view Bitcoin and other digital currencies as necessary to read about and understand to understand blockchain technology, its relationship to the future, and what’s yet to come, especially in health care.
Since delving into, learning about, and studying the blockchain, FinTech, data analytics, cloud computing, and artificial intelligence, I’ve come to the conclusion that the blockchain is going to revolutionize the way we do things in health care in several key applications.
Let’s first look at the pace of technological change.
I like to think of the blockchain as the internet “on steroids.” Going back to the year 1996, when the internet was just formed, when I sent and received my first “e-mail,” and adding all of the versatile API’s, software applications to the hardware innovation of smartphones, headsets, and wearable devices, where we are no longer tied to desks, and can now do our computing walking, running, and “on the go.”
Add to this accelerating progress the COVID-19 pandemic this year, and you have the recipe for accelerating accelerations as evidenced by companies including TelaDoc, Peloton, and Zoom, among others.
In the next few years, it is predicted that virtual reality will become mainstream, autonomous vehicles will be entering the picture, augmented by artificial intelligence and quantum cloud computing, all of which will soon accelerate the pace of change across all industry sectors, including health care, education, and other industry laggards.
At the core of it all is that all of these applications previously mentioned were built upon the basic structure of the internet, which has revolutionized the way we are doing business, learning, interacting, socializing, networking, communicating, and has upended many long-standing pre-existing incumbents.
According to Peter Diamandis, MD, technology is changing the world through democratization (easier access), demonetization (making things cheaper), dematerializing (digitization). All innovative technology goes through a period of deception before ultimately becoming disruptive (think about the first time you saw a Tesla on the road, to the current day where they are very commonly seen at every street corner).
What is the blockchain?
A blockchain is a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on the blockchain.
The key concept here is that the blockchain is immutable, decentralized, secure, transparent, self-governing, and self-regulating.
It is a system of recording and storing information that cuts out middlemen, eliminates waste, blocks out fraud and waste, and is not dependent upon third parties.
The blockchain will streamline many of the processes, allowing greater efficiency and efficacy across all industries.
Bitcoin and digital currencies are among the blockchain’s first applications, but the blockchain will allow for infinite innovation and possibilities still untapped.
What does the blockchain mean for health care?
The future of health care will be focused on prevention rather than focused on performing excessive medical treatments, diagnostic tests, and procedures. Many centralized processes, services, products, and entities will become unbundled, including insurance, hospitalization, inpatient and outpatient coding, medical billing, payments, patient care, medical education, licensure, and certification. Physicians, including Leah Houston, MD, are developing blockchain-based platform technologies for improved physician credentialing.
The current applications of blockchain technology that are currently being worked on in the field of health care include enhanced data security, transparency to financial operations, eliminating excessive administrative burden and waste, decreasing billing cycle complexity, improved methods for recording, storing, and access data records, credentialing, and supply chain management.
Obviously, with blockchain just still a nascent technology, a whole host of other unnamed applications are possible, as the sky is the limit.
In the end, think of companies such as K-Mart, Blockbuster, Nokia, MySpace, the taxi cab and hotel industry, and other business incumbents who had their business models disrupted by the Internet, failed to adapt, and ultimately lost out to the Innovators.
Imagine a day when blockchain technology hits the “tipping point” in health care and becomes widely adopted and mainstream, facilitating a massive wave of innovation. I hope to be alive to see that day.
While the politicians, regulators, state entities, political lobbyists, and current incumbents will continue to fight hard to keep and maintain the status quo, I imagine a day when blockchain technology upends the health care industry making the diagnosis and treatment of diseases, the education of physicians, and the business of health care increasingly more affordable, more efficient, more effective, and easier access to top quality of care for people from all walks of life.
Christopher H. Loo is a physician and author of How I Quit My Lucrative Medical Career and Achieved Financial Freedom Using Real Estate.