October 6, 2016

Several members of the Productive Edge Labs team attended the first ever Distributed Health conference in Nashville, TN on October 3rd. Billed as “The First Healthcare + Blockchain Summit”, the conference was conceived to bring together leading minds who are actively pursuing opportunities to leverage blockchain technology to improve the overall healthcare ecosystem. The PE Labs team stands out in this category, as we’ve been deep in the development of blockchain applications for the past year. The conference also served the purpose of educating blockchain newcomers regarding the technology and its value propositions.  

The conference was a well-organized and memorable event that represents an important milestone for those of us who have been active participants in the blockchain movement.  The following are six observations from the conference:

1.) Blockchain’s potential impact to healthcare is starting to be taken seriously.  The time has finally arrived that significant players in the healthcare space are recognizing the disruptive potential of blockchain beyond the finance industry.  A noteworthy indication of this was that the Chief Innovation Officer from Humana, one of the nation’s most influential and innovative healthcare companies, served as the keynote speaker at the conference. Likewise, several of the world’s leading healthcare business process consulting firms have partnered with blockchain startups that were in attendance, offering their healthcare domain expertise to complement the thought leadership of the technology entrepreneurs.  

The excitement of blockchain for healthcare revolves largely around its potential to eliminate inefficiencies that constitute an inordinate portion of the costs within the healthcare industry.  These “friction points” significantly diminish focus on patient care, while also resulting in confused and disempowered consumers.  Blockchain’s promises of peer-to-peer transactions, immutable transactional recordkeeping and streamlined payment capabilities are some aspects of the technology that were highlighted at the conference as offering antidotes to the existing pain points.  Use cases around the provenance of medical supplies and pharmaceuticals were also cited as prime opportunities.  

At the same time, there was healthy skepticism about the practicalities of such transformational change – but from all appearances, that skepticism only seems to further enthuse the members of the movement.  As panelist Charlie Martin of Martin Ventures aptly pointed out, “the royalty never starts the revolution” – and if that’s true, then there seem to be enough people ready to carry the flag.

2.) The demand for knowledgeable blockchain technologists exceeds the supply.  Our PE team has spent the last year doing actual hands-on blockchain prototyping, so it didn’t take long for our team members to be approached by leaders of companies who were scouting for blockchain talent.  This is understandable, as the population of talent with practical blockchain experience was seemingly sparse.  Many developers indicated that they were only recently exposed to blockchain, even including one of the hack-a-thon winners.  There was a conspicuous deficit of deep technical questions asked in technical discussions, and there was a stated effort by presenters to prevent topics from veering into the “too technical” realm.  By extrapolation, this demonstrates a significant opportunity for developers who are looking to broaden their skill sets and move into this potentially game-changing, and yet still unsaturated, space.  Likewise, for companies and entrepreneurs who are interested in developing blockchain solutions, it highlights the criticality of finding strong engineering partners.  In the astute words of panelist Susan Ramonat from SEI Investments, “Choose partners wisely, as you won’t easily be able to attract or retain blockchain talent”.

3.) Most blockchain healthcare applications are still toddlers.  The mantra that “2016 was the year of the prototype and pilot” for healthcare blockchain was a common refrain, and it was apparent in the maturity of many of the solutions presented and discussed.  While there were certainly some impressive outliers, it was noteworthy that many of the applications so far are not yet very sophisticated or mature.  At PE Labs, we’ve been developing on the edge of emerging blockchain platforms for a while.  We have followed their maturation and know the light speed at which progress is happening, so the newness of the products was not entirely surprising – but it was notable that even some companies with substantial funding are still in early prototype mode.  One related memorable interaction was the assertion by a panelist that “almost nothing is production-ready”, against which a fellow panelist vehemently protested, pointing out that his team had given a production-ready demo the week before – to which the original panelist responded with the clarification, “well, I said almost nothing”.   

4.) Data storage and privacy considerations are front and center for healthcare blockchain solutions.  It’s no mystery that HIPAA regulations, along with the intrinsic personal nature of healthcare data, bring with them privacy concerns that financial services blockchain solutions don’t face.  Additionally, the substantial volume of health data that is relevant to patients – both at the individual record (e.g. EMR) and aggregate levels (e.g. IoT) – negates its candidacy for physical storage on the blockchain.  Therefore, it’s necessary to leverage secure and private off-chain data storage solutions, while at the same time ensuring that they don’t rely on a central party and diminish the core benefits of the blockchain.  Distributed storage solutions like IPFS have emerged to address these challenges, but they also need time to mature.  Other products are focused on approaches to simplify the creation of secure on-chain references to data stored in more standard off-chain data storage solutions, such as Amazon S3 and Azure Blob.  It’s clear that scalable, private, decentralized data storage solutions are fundamental to many healthcare blockchain use cases, so it was encouraging to see energy being exerted toward addressing that need.

5.) Some blockchain healthcare applications are simply optimized workflows of existing processes that leverage blockchain instead of an RDBMS.  The vision of applying blockchain to eliminate waste from processes that involve unnecessary steps and extraneous participants has inspired people to relook at existing workflows that no longer make sense.  Countless processes – from enrollment, to eligibility, to claims adjudication and payment – require refactoring irrespective of blockchain technology, but the blockchain movement is catalyzing their optimization.  The result is that solutions are emerging whose principal value is in the overall process improvements that they encompass, often through streamlined user experiences and simplified workflows – but the benefits of blockchain technology are often relegated to the back seat.  In these cases, it’s difficult to distinguish these applications from other optimized web or mobile solutions that leverage a traditional RDBMS as their transactional data stores – except that in these implementations, the RDBMS has been replaced by a blockchain ledger.  With few exceptions, the immutable nature of the blockchain does provide value in these scenarios – and many do leverage chain code to enforce business rules – but some of them stretch the case for blockchain, so they are a reminder to ensure that tunnel vision doesn’t overtake the solutioning process.

6.) There is still an abundance of untapped opportunities.  If the conference hit home one fundamental message, it was that the healthcare universe is so vast, and in many respects so dysfunctional, that there are literally countless use cases with the potential to benefit from the merits of blockchain technology.  Within the US healthcare system alone, opportunities abound to harness the “trust machine” of the blockchain to create registries and smart contracts that can facilitate, track and govern multi-party interactions that currently rely on costly intermediaries.  Extending the scope globally, particularly into developing markets that lack well-established healthcare systems, numerous green field opportunities surface for modeling new processes on blockchain from the ground up.  While a focus on the reduction of waste and inefficiency elicits a number of logical use cases, our PE Labs team is exploring uncharted dimensions of the technology for applications that we believe will increase patient engagement and reduce disease and episodic health problems.  The role that rich user experiences play in effective blockchain solutions cannot be understated, so we’ve also been integrating leading client platforms like Xamarin into our blockchain solutions.  Stay tuned for future blog posts on our vision and progress.

Overall, the Distributed Health conference was a successful and thrilling convergence of business and technology visionaries with the courage to challenge the healthcare status quo.  The PE Labs team at Productive Edge was proud to participate, and we look forward to continuing to identify ways to help our clients leverage blockchain technology to realize new forms of business value.  In our next post, we’ll dig into some technology highlights from the conference.  There was a broad collection of impressive companies represented, but we’ll take a look at some solutions that stood out to us.  Among them are Tierion’s “proof engine” and their ChainPoint standard, Gem Health’s GemOS platform and PokitDok’s DokChain offering.

Productive Edge blockchain services

If you are considering blockchain for your business, our Productive Edge team can help you assess whether the technology is the right fit for your situation – and if it is, we can help you implement the best possible solution.  To learn more about Productive Edge Labs and the work we are doing with blockchain technology, contact services@productiveedge.com.

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