Blockchain technology is set to transform health insurance.
But what is blockchain? And what are the potential upsides and downsides of the innovation?
Let’s take a look.
Blockchain is a relatively new data structure anonymously introduced to the world in 2009. Being a digital ledger of transactions between a public network of computers, the blockchain allows each participant (through complex algorithms and cryptography) to securely manage their own data, without the need for a central authority.
The key characteristics of the blockchain include:
- Consistent accessibility
- Strong data integrity
- No central point of control
- And network-wide public accountability
Not only does the blockchain give insurers a secure outlet to store personalized health information and payment plans, it gives policyholders ‘always available’ access to those records.
The Rise Of Blockchain In Healthcare
As a result, the healthcare industry is seeing huge advantage in adapting blockchain to its companies. But in order to maximise its usability, most (if not all) must participate in the public network. In fact, current insurers partnering up with blockchain-linked businesses are already seeing impressive innovations in their sphere of influence.
Optimizing Health Coverage Through Better Data Management
Since blockchain permanently logs all transactions between its participants, it offers a level of transparency not available in the current paradigm of the insurance world. There are often multiple levels of middlemen throughout the lifecycle of a health insurance policy. Information is shared between several stakeholders, but it takes forever for the cycle to go from one end to the other. The process is riddled with inefficiencies and blockchain can help with that.
For example, applying automation to blockchain-developed programs, patients can establish ‘contractual agreements’ with hospitals, physicians, and pharmaceutical companies. Completed transactions between parties take up a ‘block’ that’s subsequently linked to the ‘chain’, and over time results in a dependable record of all concurrent interactions. As an illustration, take your standard health plan agreement, where each party would usually give the other a paper contract while dealing with various third-party entities.
With blockchain technology, each participant can now individually (and digitally) load only the information that’s relevant to their shared contract. This way when a transaction is being executed, everyone involved can view the status, history, and process of what’s being authorized.
Hypothetically, if you ever need a specialized health professional (like an orthodontist to treat your sudden wisdom tooth impaction), they’re now able to send and receive information solely related to that case. The peer-to-peer (P2P) freedom and privacy blockchain offers is what’s making it an incredibly valuable proposition for the industry.
How Insurers Will Benefit From Using Blockchain
Presently, a handful of health insurance companies are working on projects incorporating blockchain technology to accelerate their growth and market share. Since it’s a relatively new development, smart insurers are paying extra attention to the long-term benefits — while remaining focused on maintaining short-term vigilance.
For example, The Office of the National Coordinator for Health Information Technology, in response to the blockchain challenge (where everyone needs to participate in order to maximise usability), is now spreading awareness through white papers on the technology and its potential use in health IT “to address privacy, security and scalability challenges of managing electronic health records and resources”.
Fortunately, there are great educational resources available to anyone aiming to stay ahead of the curve.
However, the days of using accelerator programs and bootstrapping methods to boost your business are waning.
Insurers can instead now work with digital transformation platforms to design and develop blockchain technologies to target specific needs instead of using a one-size-fits-all approach. But, targeting the right investments involves building an experienced team that knows what to look for in the clutter of emerging products and market developments.
Promises of Blockchain In Health Insurance
The goal of blockchain is to implement a user-oriented, user-friendly, and voluntary method for maintaining any health information (like patient records or prescription scripts).
According to Tieron’s 2016 report on the potential for blockchain in healthcare, you now can (and should):
- Improve your integrity and security by providing better management of patient data
- Call for a higher quality of clinical trial records
- Reduce regulatory and compliance costs
- Set up new standards and practices
- Optimize interactions between healthcare professionals, insurance companies, and policyholders
- Form partnerships with leading ventures using blockchain technology
However, although the grass is greener on the other side – it’s not without its own set of problems. There are potential risks involved for companies choosing to embrace blockchain innovation.
The Risk With Blockchain
Developments regarding technology in healthcare are notoriously slow, partly because of the grave consequences of failure. After all, we’re talking about people’s lives here. This being said, most superficial risks can definitely be avoided with the right type of guidance and support.
For instance, developers with blockchain expertise aren’t common, so it’s important to link up with networks that can provide (and train) you with skilled data employees. I cannot overstate how important this is.
Healthcare data is a prime target for hackers, and according to Tieron, “cybercriminals sell medical records on the dark web for $20 compared to $1 per credit card number”. Such pressures undeniably validate the need for health insurers to use proven technologies before wasting time haphazardly building their own.
Blockchain presents many promises, but it also holds a few pitfalls as we’re still in the early stages of discovery. Insurers should stay optimistic, proceed with caution, and not hesitate in seeking expert assistance in traversing the coming waves.
To learn more about the potential of Blockchain and other exciting developments in the industry I highly recommend checking out The Health Insurance Innovation Summit.
Hosting up to 20+ health insurance experts, leaders, and innovators from around the world, this online conference features leading innovators and experts from around the world.
This FREE Web Conference is being held on 16-20th January, and serves as a great starting point for our new year. Anyone is invited to join, and all I ask is that you share this with anyone else who may be interested.
Click here to claim your free ticket today.