Updated: Apr 26
For those hoping for Blockchain to be an innovative change in a broken healthcare system, don't fret about the recent volatility of the cryptocurrency, Bitcoin
There has been a lot of press about Bitcoin's rise in price and popularity as well as its recent fall in price with proclamations of a bubble burst forthcoming. This may be really great news…for Blockchain.
Perhaps you consider yourself a cryptocurrency investor. If you are, given all of this activity, are you worried about your Bitcoin investments? Or perhaps you're concerned about your other cryptocurrency investments, like Ethereum? Maybe you're not even involved in cryptocurrency, but are concerned this volatility may impact your non-cryptocurrency investments? The fact that a blockchain-based cryptocurrency is getting so much attention is a great sign of Blockchain technology awareness spreading. As P.T. Barnum once said, "there's no such thing as bad publicity" perhaps that's still true? "Bitcoin" seems to be the focus and in some cases "Bitcoin" has become the poster-child for blockchain technologies as a whole. That would be only partially correct.
For those of us in Healthcare, don't fret about this Bitcoin volatility, a better future in Healthcare with the help of blockchain technology doesn't need bitcoin to succeed; but it does need bitcoin to run through its paces as one of the very first applications of blockchain technology. And for those that have no idea what a cryptocurrency even is, let's sort through all of this here.
Tedx Talk with Daniel Gasteiger "Blockchain Demystified"
What is a blockchain?
Distributed Ledger Technology (DLT), more commonly referred to as Blockchain is a relatively new technology gaining attention and traction in several industries. To say it is relatively new is even a stretch considering the technology was introduced back in 2008. More on that in a moment. Much like the internet or email are protocols for accessing information or communicating electronically, blockchain is also a protocol but directed at data historically stored in silos or ledgers. Blockchain as a protocol can be leveraged in several different ways. If you’d benefit from a video, see the Ted Talk from Daniel Gasteiger above for one of the videos we found early in our learning and still find helpful. Be sure to check out our previous post where we discuss blockchain, artificial intelligence, and machine learning while providing a quick and clear analogy for blockchain.
As a continuation from that previous, explaining what a blockchain is in an analogy is one thing, it is important to identify the various types of blockchain. A blockchain can take several forms, could be applied in countless ways, and can deploy several functional elements. Here is a quick recap of the various types of blockchains, if you'd like to read more I suggest this article.
Public blockchains - similar to the internet at large, a public blockchain is a protocol that can be utilized openly for tracking a variety of items including identity, transactions, and payments
Private blockchains - comparable to an intranet, a private blockchain could be established within a single company or business partnership
Federated/consortium blockchains - are typically used by a distinct group of stakeholders and regulated by the leadership of that group
Permissionless blockchains - are open to anyone who has the capability to access the technology as an open source mechanism
Permissioned blockchains - are for only those with permission to use the blockchain technology, typically in the private scenario listed above
As the world experienced rapid technology advancement and data dispersion in the last century, so too have the places where data ends up being stored. As a consequence, that data is stored in siloes, isolated for the most part. These siloes, or ledgers, are where each business partner has their own records of transactions, historical data, and account balances, among many other things. There is a growing interest to manage data in much more innovative ways. Connect the data housed in silos separated by incompatible table structures, technology platforms, or simply lack of trust has helped spur the blockchain movement.
How would data on a blockchain relate to healthcare?
The idea of ledgers has been relied on throughout history, dating back to the ancients. As business transactions are conducted, each party relies on their own ledgers to keep track of their business dealings. There have rarely been easy ways for this data to be shared, in part due to inadequate technology as well as an element of broken trust. Enter intermediaries and clearinghouses.
Take for example in healthcare, a healthcare provider (hospital or physician group) would have an electronic medical record, and likely a revenue cycle management system that generates claims to be submitted to insurance or government payors. There is often a claims clearinghouse which helps the navigation of the claim data from the provider through to the right payor. And then the payor may even have their own clearinghouse as a second intermediary to aid in receiving this claim data while also scrubbing the claim information to ensure error-prone claims don’t pass this clearinghouse stage.
clearinghouse before resulting in a potential denial by the payor. At each hand off, the provider hopes that the claim moves through the one or two clearinghouses and to the payor for processing, aka adjudication. The desired goal is a payment back to the provider. The payor, one might argue, on the other hand hopes to have as many checks along the way to catch claims that don't meet the right criteria for payment. In this scenario the claim data, which by the way are delivered on universally accepted claim forms or transmission data files, might return to the provider as a denial rather than a payment. This adjudication process can take weeks if not months in some cases. Days in accounts receivable is a healthcare finance leader's batting average as a way to quickly compare financial success from one organization to another as to how well the provider is able to process claims briefly stated. The more intermediate steps and the processing time at each step only increases this all-important days in AR performance.
Each of these stakeholders have essentially their own ledgers that this claim and payment data has been stored along the way, yet they are unlikely to share this information to make each of their lives easier. Sharing this information would require not only the systematic and technological capabilities to do so, but also a rebuilding of long-standing trust, a paradigm shift to towards business collaboration, and mutually beneficial incentives to doing so. If the industry could ever find a way to make this technologically possible and shift the relationship paradigms conducting business in a collaborative way could greatly improve processing efficiency for everyone involved. This unveils several important questions philosophically and business-related, a topic in and of itself. However, this leads us to where Blockchain potentially comes back into the picture.
Let's suppose in our healthcare scenario above including the provider, the provider's clearinghouse, the payor's clearinghouse, and the payor that all four of these parties would agree to using the same ledger protocol. When a transaction is conducted the information is quickly shared electronically across all of their copies of the same ledger. Put very simply this would help eliminate the trust issues that are so common in the relationship dynamics of healthcare. Touching briefly on smart contracts as an element of blockchain technology, these could be in place so that if all parties agree that a transaction is tracked on a common protocol/ledger, is deemed complete given a specific scenario that is visible to all involved, and the data is replicated across each of the stakeholders’ ledgers, now distributed, the payment could be processed in a very prompt fashion along the same protocol. One of the big questions is what data is included, referenced, or not pertinent, another topic for another day.
Cryptocurrencies like Bitcoin use a blockchain-based technology with the transactional information distributed across all the ledgers of all involved in the crypto currency. It should be noted blockchains do not require a unique currency, in fact any existing government backed currency could be used in a blockchain use case. Our healthcare illustration just described could easily use the US Dollar as the currency that is exchanged. A cryptocurrency is not essential to the success of a blockchain implementation in healthcare or any industry for that matter. So, what is the difference between a cryptocurrency and a blockchain?
All cryptocurrencies are based on blockchain technologies, but not all blockchain technologies are or require use of a cryptocurrency.
As briefly alluded to above, blockchain technology is nearly a decade old. It was introduced in 2008 by a pen-named author Satoshi Nakamoto with the concept of a cryptocurrency based on a blockchain protocol in a now well-known white paper LINK.
Bitcoin is just one form of cryptocurrency, perhaps the most widely recognized and newsworthy. Ethereum is one that has also a lot of attention the details of each differ slightly in terms of approach and application. Bitcoin seems to be widely used as a cryptocurrency, whereas Ethereum is both a cryptocurrency and has also become a blockchain application platform for development of a variety of use cases separate from a cryptocurrency. Looking beyond the two "household name" cryptocurrencies the list grows much longer and with a lot of variety.
The concept of an IPO or Initial Public Offering is something many are familiar with for when a company "goes public", "rings the stock market bell", or issues shares of stock on an exchange like the New York Stock Exchange (NYSE) or NASDAQ exchange. In the cryptocurrency world, an ICO or Initial Coin Offering is when a cryptocurrency built on a blockchain technology becomes available for purchase. Another term for this is a Token Sale. This is becoming an increasingly common area of activity, here are a couple charts that paint this picture.
A token sale is often a financial mechanism used by a startup to arrange for funding for an application they are developing that addresses a business or market need. This can be somewhat controversial and in other cases entertaining. Each day seems to reveal another legitimate cryptocurrency as well as those that most imaginations wouldn’t have fathomed, and some that are simply fake for notoriety’s sake. Not all business processes need to tokens issued in order to be functional on a blockchain.
Certainly, many ICOs by startups want to use their own token mechanism for customer incentives, marketplace monetization, among other reasons. A few cases of token offerings have come up as parodies of the concept. The important take-away is that a blockchain can be fully functional without the need for a cryptocurrency token mechanism, it depends on the intended purpose. In general, a blockchain could be functional if US Dollars or any other established government-issued currency is applied.
Will Bitcoin become the household name for blockchain technology?
Bitcoin is the first major application of blockchain technology, it happens to be the most
Bitcoin is the first major application of blockchain technology, it happens to be the most widely known cryptocurrency, which happens to be a blockchain. There is a lot of attention lately on Bitcoin, it has a growing number of participants, and its gaining increasing press as well as speculation. The more activity and attention that a cryptocurrency like Bitcoin gains the more this relatively new technology, blockchain, will be able to experience trial, error, and most importantly refinement to perfecting its methodology. There are a lot of refinements still needed for blockchain technologies to gain even wider acceptance.
As Bitcoin moves through its valuation highs as well as its pricing lows the more the technology will be discussed. The more it is discussed the more doubts, hopes, concerns, and benefits can be identified. The technology won’t be adopted if it isn’t tested and evaluated. It certainly won’t be refined on its own with a small group of programmers in a room. Multiple stakeholders need to be involved and speak their perspective to find its weaknesses, accentuate its strengths and shore up deficiencies.
Bitcoin getting all of the cryptocurrency or blockchain attention could create a problem for blockchain as a whole. Right now, Bitcoin is the household name. The number of people that have heard of Bitcoin may be increasing, but the number of people that know it is a blockchain-based technology applicable for a wide array of applications may not be all that large a population. Just like Rollerblade made its way into the household for what is called inline skating and a Kleenex is requested when someone needs a facial tissue when about to sneeze or has a runny nose, Bitcoin as only one specific use case for blockchain technology could become the de facto label for all of blockchain.
Regardless of Bitcoin succeeding or failing, in the long-run it is important to distinguish Bitcoin as just one form of blockchain and not The Blockchain. In fact, it is really important for the blockchain advocates and the blockchain adversaries to make clear that Bitcoin is just one deployment of a public blockchain and there are still many other variants available, especially if, when, where, and how Bitcoin fails.
Bitcoin trials and tribulations will be great for making blockchain technologies even better
"There's no such thing as bad publicity," says P.T. Barnum, unless Bitcoin succeeds at becoming the household name for all there is in the blockchain environment while proceeding to either fail as a cryptocurrency or bring about negative connotations. If that is the result for Bitcoin, blockchain for most other use cases will be given a bad name.
However, Bitcoin working through its own trials and tribulations to becoming a more widely accepted cryptocurrency could be a good thing for blockchain. The more scrutiny addressed at Bitcoin, being the first major deployment of blockchain, will help make improve blockchain as a technology and increase its overall acceptance.
It will be very important to differentiate Bitcoin from the rest of the blockchain spectrum. And for those of us in healthcare Bitcoin's growing pains may just help make any of the forthcoming blockchain innovations even better for which our industry so desperately needs. Regardless of Bitcoin, there are many non-cryptocurrency blockchain implementations being explored already so Bitcoin may not even have any effect on healthcare anyway.
Help spread the good news
Tell your friends in healthcare worried about Bitcoin they can take a deep breath, the future of blockchain for healthcare is still alive and well. And for those of your friends who have never heard of Blockchain, Bitcoin, or cryptocurrencies tell them about this site and especially our resources page to help get them up to speed.
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