BlockchainThe Savior of Healthcare?

Florian QuarréChief Digital Officer, Ciox Health

Blockchain in HealthcareA bit of context

Blockchain - Convergence Of Exponentials.Blockchain, IoT, Cognitive Computing are heading towards a convergence where their complementary benefits can be combined. Blockchain is core to the data capture and interchange capability of the ecosystem.

• Simulates perceptual and cognitive skills to perform tasks only humans used to be able to do• Cognitive technologies which have seen rapid progress and investment include Machine Learning

(ML), Natural Language Processing (NLP), Speech Recognition (SR) and Computer Vision (CV).

• A distributed ledger used for recording transactions – one that is copied to all of the computers participating in a network

• A blockchain stores every transaction ever executed between the participants of the network and through an innovative validation process ensures consensus of the entire network at all times

• Connecting an every day device to the internet to created ‘connected devices’ or ‘smart devices’ that can receive/send information

Blockchain

Cognitive Computing

Internet of Things

Interconnected Exponential

Future

Blockchain has seen a drastic acceleration in interest since 2015 – yet, was it a fad?

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Blockchain Blockchain in Healthcare

Satoshi writes initial Bitcoin code

By then, $1.5B+ “stolen” via hacking of the technologiesBlockchain started ~2009, and has since caught everybody’s

attention. Started in Finance via Bitcoin, many other industries / functions have caught up – Governments/Public-Sector, Telco, Mining, Property, Retail, Entertainment, Supply-Chain, … Healthcare.

Era of Invention Era of Early Adopters Era of Fast Followers

Bitcoin’s genesis blockcreated, and first BTC Tx

Satoshi published initial Bitcoin whitepaper

First real-world transaction:BTC10k for 2 slices of Pizza

First BTC Exchangeestablished

BTC Magazine starts,Interest is brewing

Ethereumis launched

R3 is launched as a consortiumof 40+ legacy Financial Inst.

GEM Health Network, Patientory, are Launched

HHS/NIH Reach outto private sector on

Healthcare Blockchain

~50+ HC BlockchainCompanies

launched

?

NASDAQ discloses a Blockchain Pilot

Mistakes have been made, lessons learned… now time for real world applicationBlockchain doubles in performance/price reduction every 12-to-18 months, making it one of the fastest growing Exponential Technologies, creating opportunity to rapidly transform existing industries while creating new products and services. Implications

Disruption

Changes to Talent and Operations

New Products & Services

The disruptive potential of exponentials occurs when technologies can better align with customer needs, at a lower price point. Providing the opportunity for newcomers to overthrow incumbent companies that rely on antiquated technologies

Exponential innovations help companies and individuals connect with each other, empowering them to combine technologies, practices, and business models in interesting ways to create a seemingly endless array of new products, services, businesses, and new technologies.

Application of the exponentials requires new skillsets to implement, maintain, and use; resulting in changes to existing processes and identification of new resources or training of existing resources

Blockchain in HealthcareIntroduction

Blockchain in the news – what’s the latest, How is this technology making an impact?

Pulled as of 7/12

Blockchain – A Brief IntroductionBlockchain, the result of the assembly of existing technologies, and often compared to the disruption internet created, has been called the ‘information game-changer’ of the 21st Century due to the use cases it enables.

Blockchain is a crypto-technology, relying on well-established cryptographic principles and operating as a distributed repository that provides a way for information to be recorded and shared through a peer to peer community. In this community,participants maintain their own copy of the blockchain, and can participate in the validation (mining) of the transactions (block) that are wished to be added onto the chain – also called a consensus-based process. Once a transaction is written to the chain, contained within a block and chained to other blocks, it cannot be tampered with, and the blockchain is synchronized across the community.

What isBlockchain?

So, how does Blockchain work?

Source: Deloitte Consulting

Figure 1. Blockchain: How it worksBlockchain allows for the secure management of a shared ledger, where transactions are verified and stored on a network without governing central authority. Blockchains can come in different configurations, ranging from public, open-source networks to private blockchains that require explicit permission to read or write. Computer science and advanced mathematics (in the form of cryptographic hash functions) are what make blockchains tick, not just enabling transactions but also protecting a blockchain’s integrity and anomity.

1 - TRANSACTION Two parties exchange data; this could represent money, contacts, deeds, medical records, customer details, or any other asset that can be described in digital form.

2 - VERIFICATION Depending on the network’s parameters, the transaction is either verified instantly or transcribed into a secure record and placed in a queue of pending transactions. In this case, nodes - the computers or servers in the network - determine if the transactions are valid based on a set of rules the network has agreed to.

3 - STRUCTURE Each block is identified be a hash, a 256-bit number, created using an algorithm agreed upon by the network. A block contains a header, a reference to the previous block’s hash, and a group of transactions. The sequence of linked hashes creates a secure, interdependent chain.

4 - VALIDATION Blocks must first be validated to be added to the blockchain. The most accepted form of validation for open-source blockchains is proof of work - the solution to a mathematical puzzle derived from the block’s header.

5 - BLOCKCHAIN MINING Miners try to “solve” the block by making incremental changes to one variable until the solution satisfies a network-wide target. This is called “proof of work” because correct answers cannot be falsified; potential solutions must prove the appropriate level of computing power was drained in solving.

6 - THE CHAIN When a block is validated, the miners that solved the puzzle are rewarded and the block is distributed through the network. Each node adds the block to the majority chain, the network’s immutable and audible blockchain.

7 - BUILT-IN DEFENSE If a malicious miner tries to submit an altered block to the chain, the hash function of that block, and all the following blocks, would change. The other nodes would detect these changes and reject the block from the majority chain, preventing corruption.

3 Blockchain Implementation patterns have emerged

Blockchain started with the storage of financial transactions, and has evolved to being a distributed, computing operating system.

3 patterns have emerged as viable implementations – digital records (bitcoin, title ownership), digital assets (cryptokitties), and smart contracts (augur).

That said – limitations exist. Blocks are not meant to store large amount of data. Smart Contracts are … arguably Smart.

Mapping an implementation to a specific patterns a great design thinking tool to consider blockchain as part of the helps ensure that blockchain is the right technology for to solve for the business problem. It also provides Source: Deloitte Consulting

1 – Storing Digital RecordsBlockchain allows unprecedented control of information through secure, audible, and immutable records of not only transactions but digital representations of physical assets.

2 – Exchanging Digital AssetsUsers can issue new assets and transfer ownership in real time without banks, stock exchanges, or payment processors.

3 – Executing smart contractsSelf-governing contracts simplify and automate lengthy and inefficient business processes.

Ground Rules Terms and conditions are recorded in the contract’s code.

Implementation The shared network automatically executed the contract and monitors compliance.

Verification Outcomes are validated instantaneously without a third party.

Blockchain is Bitcoin• Bitcoin is a type of cryptocurrency• Blockchain is the underlying technology to Cryptocurrencies (Bitcoin, Ether, Stellar, …)

Blockchain is an Enterprise Database

• Blockchain is designed to record small, atomic transactional information• Ecosystems requiring high throughput, random read/write, etc. should still used traditional RDBMS++

Blockchain Security Means Data Privacy

• Blockchain’s security comes from its blocks hard-locking mechanism, not a virtue of authentication• Private / permissioned blockchain add a necessary layer of user access control

Blockchain is Always Public

• A public blockchain is available for anyone to add to, and participate in the consensus process which is to determine which data blocks are valid and should be added to the chain

• A private blockchain controls access contains permissions stipulating the ability to view data, add to the chain, and participate in the consensus process

Blockchain cannot be hacked

• Blocks appended to the chain create a locking mechanism for all blocks prior.• Attackers with enough resources to re-compute all links from the tampered block to the end, and

owning over 50% of the nodes on the network can tamper information in the chain

Myths and Facts on Blockchain have emerged, know how to spot them!Although Blockchain is many things to many people, understanding what blockchain can and cannot do helps validate whether it’s the right technology for select use cases

Blockchain in HealthcareDeep Dive

Blockchain in Healthcare – What are some of the main issues we face in our industry?

Fraud & AbuseData Breaches

Long Dispute / Negotiation Cycles

4.6 million claims per day. >2% containing incomplete information

Claims adjudication require the coordination of disparate systems, taking 30-45 days to finalize a claim

Inefficient Claims Processing Counterfeits & Abuse

112M healthcare record data breaches in 2015 due to a hacking / IT incident

An estimated 1 in 3 health care recipients will be a victim of a health care data breach

An estimated 5-10% of health care costs are fraudulent, totaling $272B across the health care system

Abuse includes excessive billing and falsifying information

An estimated 30% of drugs sold in developing countries are counterfeit

$12.5B in fines have been levied against pharma companies for failure to accurately report drug safety data

Multiple Legacy Systems

Lack of Medical Record Control

No Trust in the HC Industry

Poor Network Coordination

Scattered View of Transactions

Inconsistent Clinical Trial Process

Lack of Drug Traceability

ProviderPayer Patient Pharma

Most “data-hungry” health organizations fail in their business model due to the complexity and cost in acquiring data

It can take from sub-second to weeks to acquire information in an executable format that can be used for research, and serve patients in need of targeted care

Highly complex, costly and lengthy processes to retrieve, extract, curate, federate and augment health information due to heterogeneous systems, variability in standards, quality and accuracy

Limited executable insights on patients’ health, inability to create longitudinal view of the patientHealthInformation

Access

For select claims, use smart contracts to auto-adjudicate and fulfill immediate

payment / Reimbursement

Bring Pharma’s supply chain to blockchain, and trace drugs from

“compound to counter”

Bring Patient control over records distribution, reduce leaks by increasing

transparency

Share to a select network efficiency and cost of care for risk sharing and better

provider coordination

Value Based Care

Smart Claim Contracts

Longitudinal Patient View

Pharma Drug Monitoring

Blockchain in Healthcare – Blockchain to help solve these problems.

Patient Engagement

Define the standard structure for information stored / exchange via blockchain, determine what is kept off-chain, and solve last mile data illiquidity.

Blockchain in Healthcare – In action!

Source: healthit.gov, Frost & Sullivan

Blockchain in Healthcare – The Savior of Healthcare?

1. Now is the time. There’s been enough learning across the board to apply against real world scenario.

2. Yet – let’s apply caution. Patient’s privacy is critical, should be core concern to any open distributed healthcare ecosystem. A “trustless” environment requires critical engineering thinking, not all can be a happy discovery.

3. consortium / co-opting / collaboration model is necessary - this is a structural build out:

i. We need all major players to agree on core fundamentals of the chain, and how we can all use it as a shared capability,

ii. We need to agree on the standard, and collaboration of implementation and operation,

iii. We need to prevent proliferation of different chains, and favor mutation towards selections of the right solution for the right problems.

4. Solve in iterations, and don’t try to fix the industry as a whole, at once.

5. Find answers that enable healthcare’s infrastructure growth while bringing the patient at the center of the ecosystem.

Questions?Answers!

Thank You!Want to continue the conversation?

florian.quarre@cioxhealth.com

@FlorianQuarre