Tirupathi Karthik

#Blockchain in Healthcare: Will it or won’t it survive? By Tirupathi Karthik, @TirupathiKarthi


What is Blockchain

Blockchain offers a permanent record of online transactions. Transactions are deemed as a “Block” and a ledger binds them in a “chain” thus earning its moniker “Blockchain”. Each transaction is validated and stored by a network participant based on rules but sans a governing central authority. Information can neither be modified nor copied or deleted.

Every transaction has a time and date stamp, offering a trusted transaction history and allowing verification of such records. Since the information is encrypted, the only way to access the blockchain is with a passcode. This shared ledger system makes Blockchain rather secure. Given this, Blockchain is gaining new use cases for applications that require trusted and immutable data.


Blockchain in healthcare

The disruptions wrought by blockchain technology in the fin-tech industry are all over the news – Healthcare is not immune to this disruption. Healthcare Rallies for Blockchain, a study from IBM, found that 16% of surveyed healthcare executives had solid plans to implement a commercial Blockchain solution this year, while 56% expected to by 2020. (1)

It is projected that 55 % of healthcare applications will have adopted Blockchain for commercial deployment by 2025. (2)


The known use cases of Blockchain in Healthcare

Presently, healthcare transactions are slow, cumbersome and expensive. As with any new technology in the hype cycle, Blockchain also generates a lot of excitement but has few real commercial applications. There are even fewer start-ups with a proven business model. This is both an opportunity and a threat. The threat comes from lack of traction which might eventually lead to Blockchain being ignored by the entire Healthcare industry. However the opportunity to make our own future is exciting. It is really up to our imagination to conjure up innovative solutions. Few key areas of interest seen thus far include

1.     Health Data Exchange and Interoperability

With transfer of data through API’s – Blockchain achieves standardization of data format, which is used to transmit data, irrespective of capabilities of EHRs, to communicate different HL7 versions.

Blockchain provides a foundation for secure, permissioned framework for data exchange thus allowing data to be freed up for enhancing efficiency in care coordination.

2.     Data Security and backups

In 2017, over 50,000 patient records were compromised through a series of breaches resulting in multi-million dollar fines for providers. However with Blockchain, malicious parties wanting to gain access would need to simultaneously breach every participant in the network, not just one. (3)

3.     Billing Management

An estimated 5–10% of healthcare claims are fraudulent as a result of either excessive billing or billing for non-performed services. (4)

Blockchain could reduce this level of fraud and automated billing would reduce admin costs by eliminating the need for intermediaries, ultimately making the process more efficient.

4. Pharmaceuticals and Drug Tracking

Using this technology supply chain management can track drug sourcing to reduce the impact of counterfeit drug on Patient’s health. 

Challenges to Healthcare Blockchain Adoption

Fig: Healthcare executives on barriers to healthcare adoption of Blockchain worldwide in 2016 (5)

Immature technology, insufficient skills and regulatory constraints were cited as a Top-3 barriers to adopting Blockchain technology in healthcare. Some others include:

1.     Existing systems and cultural shift

Presently patient EMR data is already being managed in large legacy systems by Health systems globally. In the absence of an adverse event, Blockchain based solutions don’t have compelling business case for a rip-and-replace strategy. So it will have to evolve over a period of time and large-scale Blockchain based EMR replacement projects are unlikely to be awarded any time soon.

2.     Healthcare stakeholder network is distributed so it’s hard to implement

Insurance payers and healthcare physician providers are all not consistent in terms of how different entities handle records. In the absence of single payer, who could drive data standards, it would be extraordinarily difficult to pull different stakeholders together to adopt Blockchain as a technology. 

3.     Many players aren’t willing to share

For example insurance payers and hospitals actively try to not share data. It is a competitive advantage for hospitals to keep cost data to themselves. If they are forced to share with insurance companies, they might get lowered payouts for patients. It is difficult to share data in an environment in which these entities are for-profit.

Intrinsically Payers and Providers have conflicting priorities. Both try to maximise their returns and hence collaboration that involves data sharing, especially on costs, is not in their interests. Consequently interoperability becomes a casualty.

Can the Dotcom boom serve as a guide to the future of Blockchain?


Blockchain technology may not be the panacea for healthcare industry challenges, but it does provide efficiency in the overall health ecosystem by dis-intermediating some high cost transactions. By now, most healthcare organizations around the world have recognized that Blockchain has the potential to reduce the cost, time and risks associated with the delivery of healthcare services. According to an analysis done by BIS Research, the global Blockchain (Healthcare) market is estimated reach to USD 5.61 billion by 2025. (6)

However as history has shown, not all such exciting technology solutions survive the real-life business. In the late 90s B2B exchanges were supposed to provide similar value by bringing all stakeholders on to a common platform. It did lead to a dotcom boom for a short while but the euphoria died a natural death when there were no takers for such a vision in the real business world. Today some of the big names in B2B tech industry such as CommerceOne, FreeMarkest, Covisint, Ariba are but a pale shadow of themselves or have been completely wiped out by forces of acquisitions. There is a lesson here for us. All solutions that can technically solve a problem may not be practically monetisable!

As Captains of the Healthcare IT industry we need to make Blockchain count for the industry and ensure its commercial success. Let’s keep the solutions small and affordable but with a laser like focus on generating lasting benefits for the providers. Once that is done, scale will come as also the eventual benefits that will allow us to monetise our investments.

Source

1.https://www.forbes.com/sites/bernardmarr/2017/11/29/this-is-why-blockchains-will-transform-healthcare/#4aa71a101ebe

2.https://www.statista.com/statistics/759208/healthcare-blockchain-adoption-rate-in-health-apps-worldwide/

3.http://health.oliverwyman.com/drive-innovation/2018/04/is_blockchain_thean.html

4. https://hackernoon.com/how-blockchain-is-set-to-disrupt-the-healthcare-industry-in-2018-5d4fda455911

5.https://www.statista.com/statistics/759312/barriers-to-healthcare-adoption-of-blockchain-worldwide/

6. http://makingthehealthcaresystemwork.com/2018/07/06/beyond-the-buzz-real-opportunities-for-blockchain-in-health-care/

The article was first published on Mr. Tirupathi Karthik’s LinkedIn pulse Blog, the article is republished here with the Author’s permission. 

Author
Tirupathi Karthik

A leader in the Healthcare IT space, Tirupathi Karthik has extensive business leadership experience across Asia, the Middle East and USA, particularly in the enterprise software space. He is a passionate advocate for the innovative use of technology that turns IT investments into competitive differentiators for their stakeholders rather than using IT as a pure cost containment initiative.

In various hospital implementations, he has been championing the use of Mobility as a pervasive information delivery channel. His vision led to the use of themFirst approach with the infusion of HTML5 and Apple’s mobility products across the Napier platform. Napier’s leadership in the global marketplace continues to gather momentum on the back of one of the most modern implementations of such a technology stack.

As an Eldercare thought leader, he has been driving productivity agendas for aged care models globally and seen to the expansion of Napier’s product vision to include elderly care services delivery. Applying technology-enabled solutions for senior care providers offering nursing home, home care and activity-centre services, Napier today enables productivity and improved quality of care.

Why should standalone Hospitals in India focus on IT enabled productivity by Tirupathi Karthik, @TirupathiKarthi CEO at @NapierHealthit


Fresh out of HIMSS India’s inaugural Digital Healthcare Summit, (2015) in Gurgaon, I lamented over the state of healthcare IT in the country. At the time, we were showcasing our hospital information system and launching our telehealth and patient referral management solutions. I should have been proud to be a part of the innovation on display at the event, and understandably so. But what struck me harder than pride at the event and left me with a lingering sense of disappointment was something else. And that was just how far some parts of India lagged behind the rest of the developed world in terms of healthcare delivery and quality.

Napier Healthcare is a global company headquartered in Singapore, where it manages the development of technologies to world-class standards. My other point of reference is the US. So whenever I consider the industry in India, I am invariably piqued by its difference from the industry in Singapore and the US. Especially the US, since it is a democracy like India and has similar health problems on a large scale.

In the time that has passed since HIMSS India, I have thought through some options that the Indian healthcare should seriously consider moving forward. 
EMR Enforced By Law

The most obvious difference I see between India and the US is in their standards and certification environments. We do business in the US and have to be certain that our solutions meet that market’s most stringent regulatory and certification requirements. They include HIPAA and a few others, but more significantly in the case of hospital information systems, the Meaningful Use Stage 2 (MU2) compliance certification. These certifications create significant entry barriers for non-serious players, and make certain that healthcare IT (HIT) quality is maintained in the market.

The policy framework in the US sees to it that EHRs (Electronic Health Records) are sold with certain features that ensure nearly zero medical errors, well-supported transitions of care and ultimately higher quality care delivery.
India has been working on a national EHR standard since 2013, when the Ministry of Health & Family Welfare (MoH&FW) announced its first set of requirements. The MoH&FW has subsequently made continual enhancements of this set of standards. Translating policy intent into effective outcomes still remains a distant goal in most states as software vendors have an option, not a mandate, to comply with this EHR standard.
I must admit, though, that for a large country such as India, executing that would take quite a few years. Even then it would most likely reach only those under some form of formal insurance, and that too only in the metros and some larger cities. As a result, the majority of the population in the semi-urban and rural sector would be excluded from this. 

Automation to Level the Playing Field

The World Bank tells us that private hospitals account for 67 percent of total healthcare expenditure in India. World Bank numbers also tell us that in 2014, citizens paid for 89.2 percent of their healthcare expenses out of their own pockets[1]. These figures have been rising constantly since 1995, and they clearly show two major trends.
One is that private healthcare is enjoying explosive growth in India, with larger private healthcare providers, such as Fortis and Apollo, gaining the lion’s share of the market, and smaller private hospitals being edged out of reckoning slowly but surely. The other is that healthcare is becoming an increasingly heavier burden on Indian citizens. And on poorer households in India, that only drives them deeper into poverty.
My recommendation is for < 100 bedded hospitals to focus on quality rather than volume, and to leverage HIT and automation in their efforts. Automation helps  improve patient-care coordination and ensure the consistency of patient care across facilities, and foster patients’ (and their families’) engagement in their own care. This all adds up to better care and lower costs of delivery for hospitals, and better health outcomes for patients. Today most healthcare providers think of Billing and Inventory as the key areas for automation to the exclusion of everything else. This myopic vision leaves a lot of value gaps that goes un-leveraged and un-monetised.
From the industry standpoint, smaller private healthcare providers who leverage HIT effectively ensure their survival and success, help bring about a more competitive provider market, and ultimately offer better quality care at lower costs.

Get Over Short Termism

Short-term thinking is holding back progress in the healthcare industry and preventing innovation among HIT vendors. Our studies have shown that hospitals  seldom spend more than 0.5 percent of their revenue on IT. Mostly they tend to source customized software solutions from small time players and the mindset seems to be—“cheap is good but free is better.”
Clearly, they do not see IT as a competitive differentiator that can help reduce cost and improve productivity. Small time IT players seldom invest in R&D and rarely provide yearly updates and upgrades. This means that hospitals need to re-implement every time they need to do a technology upgrade. But instead of seeing the potential loss of patient relationships and revenue opportunities that comes with every implementation, many hospitals stay fixated on just how cheap it is to get a new solution every time.

Compared to a global average of 2-2.5 percent of investments by hospitals, or 6-15 percent by other sectors in India itself,  hospitals are far behind their global peers in recognizing the value of good software. The impulse is always to invest for the quick ROI. For example, instead of investment in IT, many CEOs traditionally have wanted to invest in CT Scan or other equipment, which can generate revenue from the following morning itself.

By extension, this approach of managing the affairs of the hospital stifles innovation among IT vendors and limits their ability to invest in R&D for creating innovative IT solutions.
I strongly urge the healthcare leaders to change their mindset and start looking at generating productivity gains by setting up lean and mean operations. The skilled work force is increasingly hard to come by. Hospitals need such critical resources like Doctors and Nurses in abundance to support the opening of newer facilities and not having them will limit growth, like one of our customers in India is realizing very quickly. With abundant money supply Hospitals can easily raise capital today but not having good physicians and nurses will limit their growth for sure.
The only way to achieve sustainable growth is to focus on enhancing productivity rather than just adding to the labor force alone. And quite simply the most effective approach to enhancing productivity at any organization incorporates the innovative use of good technology.
So my key message here goes directly to senior executives of healthcare facilities:   is to view IT as a competitive differentiator rather than as a cost management tool. And recognize that the right software and other tools are essential to making those gains and sustaining your business growth. Continually benchmark your practices to hospitals globally and not just with peers locally.

Finally, Insurance is coming

Increasingly top hospitals are becoming aware that the Insurance reimbursements are a significant portion of their revenue and rising every year. DRG classifications and reporting are going to become commonplace as Insurer’s seek to reduce their cost by paying for “packages” rather than individual services. This means that Hospitals that won’t or can’t respond to the Insurer’s will be left to address private-pay market that will shrink slowly but surely. If one studies the evolution of the US system you will find a strong parallel to the trends in the Indian healthcare system. This will be an existential question for providers.

Like they say “the best way to predict the future is to invent it”. 


Conclusion

  • Healthcare providers need to implement software and other tools with a view to generate productivity gains – not just to generate bills
  • View IT as a competitive differentiator rather than as a cost management tool

The author is the CEO of Napier Healthcare, a Singapore based software provider of technologies such as HIS, EMR, Portals and revenue generating solutions such a Referral management and CRM. He has personally witnessed smaller Singapore healthcare providers with ~100 beds overcome manpower crunch by using technology.

The Article was first published on Mr. Tirupathi Karthik’s LinkedIn Pulse blog, here, and has been republished with the author’s permission.

Author
Tirupathi Karthik

A leader in the Healthcare IT space, Tirupathi Karthik has extensive business leadership experience across Asia, the Middle East and USA, particularly in the enterprise software space. He is a passionate advocate for the innovative use of technology that turns IT investments into competitive differentiators for their stakeholders rather than using IT as a pure cost containment initiative.

In various hospital implementations, he has been championing the use of Mobility as a pervasive information delivery channel. His vision led to the use of themFirst approach with the infusion of HTML5 and Apple’s mobility products across the Napier platform. Napier’s leadership in the global marketplace continues to gather momentum on the back of one of the most modern implementations of such a technology stack.

As an Eldercare thought leader, he has been driving productivity agendas for aged care models globally and seen to the expansion of Napier’s product vision to include elderly care services delivery. Applying technology-enabled solutions for senior care providers offering nursing home, home care and activity-centre services, Napier today enables productivity and improved quality of care.

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