Blockchain’s Missing Link
By Frank Poggio
Frank Poggio is president and CEO of The Kelzon Group.
The IT concept that you hear most about today is blockchain systems design and technology. If you have not, you will very soon. It’s a concept that relies heavily on core Internet communication tools and shared information.
When you mention blockchain, some people automatically think of bitcoin, but bitcoin is just one application of the block chain concepts and tools — it is not blockchain proper. HIStalk posted a good synopsis of blockchain last year .
Blockchain in its simplest form is a virtual ledger. A ledger that is available to all on an instantaneous basis via the Internet.
Let’s look at an example. Say I borrow $100 from my office buddy Joe. If it’s just the two of us involved and no one else cares, then he notes on his paper ledger an asset of $100, with an offsetting entry of his cash decreasing by $100. On my ledger, I note an increase in my cash balance of $100 and a liability to Joe of $100. If an auditor were to check our ledgers, they would see all four entries and all things would be kosher, or in accounting terminology, in balance.
Now assume everyone in our office cares and we all have electronic ledgers and all our ledgers communicate with one another via the Internet, thereby creating one big virtual ledger. Every time one ledger changes, they all change instantaneously. Everyone in our office would see I owe Joe $100. As I make payments on the loan (or fail to), all ledgers would reflect the subsequent activity.
Blockchain software maintains a universal virtual ledger by maintaining constant communication among all participants. All updates and transactions — whether add, change, or delete — are stored forever. Hence the full provenance of any activity is easily viewable. The number of participants is not limited and could be in the billions, limited only by agreed-to privacy and security constraints.
The implications of blockchain technology are enormous. For example; since the blockchain is always in balance (no single entity entries allowed), goodbye auditors, bookkeepers, accountants, financial intermediaries, clearinghouses, many regulators, and so on.
Some industry pundits are predicting that blockchain will transform healthcare and make the interoperability mountain into a mole hill. A deeper understanding of the healthcare landscape with its many non-technical issues makes me a skeptic.
On the business side of healthcare, the impact should be pretty much the same as in commercial business. You can expect a big impact on finance and supply chain management. Operations such as scheduling and resource management will see significant impacts. Many will happen within the next decade. Legacy systems will have a tough time adapting, more so than their adaptation to the Internet, but slowly they will adjust.
On the clinical / medical side, I predict a much longer runway before we see any real impact. There are two reasons. First, blockchain is highly dependent on definition and structure. Terminology must be consistent and procedures must be standardized. Generally Accepted Accounting Standards (GAAP) have been in place for centuries, and as they have changed over the decades, multiple oversight groups have hashed out agreed-to changes. On the supply side, UPC codes have been around for almost 50 years and go down to almost the molecular level.
Not so in medicine. A practitioner’s understanding and use of terminology and protocols is highly dependent upon where they went to medical school and who they trained under. Studies have shown that even today, after the federal government has paid out over $30 billion in EHR incentives, still over 70 percent of a patient’s medical record is entered into the EHR as free text.
The second reason is that blockchain cannot work without absolute accurate identification about the transaction initiator and the information target. Identifying the initiator is easy. The target is the person / patient and that’s another matter. Still today after decades and trillions of dollars spent on healthcare IT we do not have a unique person / patient identifier.
As I have noted in my past writings on HIStalk and other blogs, this is not a technology problem, but a political one. If blockchain is to be the savior of healthcare interoperability, as the technocrats suggest, then it’s Congress that will have to forge the most critical first link in the chain.
My prediction is that systems developers will continue to jury rig solutions around this missing link. Providers would do well to remember that a chain is only as strong as its weakest link.