The Blockchain in Health: What are the opportunities for value creation?

Article written by our expert  Anca PETRE  (Co-founder of 23 Consulting ) specialist in Blockchain technology in the Healthcare sector

“Distributed Ledger Technologies” or DLTs are distributed registry technologies that form part of the Blockchain, which usually result in two types of applications: On the one hand, those that optimize and enhance existing systems and processes, and other, those that create new economic models.

These two scenarios can lead to many business opportunities in the healthcare sector, but only if the issues are properly identified and the solutions take into account the specificities of the industry.

 

At the time of writing these lines, we see that the ecosystem includes more than 200 startups that are working to build solutions for the health sector. Of these, more than half are working on ways to share and secure medical data. Although the majority of these companies are still in an early stage of development, their projects have sparked a boom in the industry. Key accounts are beginning to challenge traditional business models and look for opportunities outside their comfort zone.

The Blockchain alone is not responsible for this wave of enthusiasm sweeping the health sector and carrying with it its share of changes. In fact, this is more largely due to the digital revolution in its entirety.

Every stakeholder in this industry has seen parts of its business disrupted by the advent of artificial intelligence, IoT (Internet of Things) or augmented reality, to name a few. The Blockchain adds to this infatuation a flow of confidence in the transfer and storage of sensitive information.

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Pharmaceutical companies focus on long-term use cases:

Blockchain technology is often seen as a long-term investment for healthcare companies, especially Big Pharmas. Indeed, studies suggest that there are three main areas of application of Blockchain on a time scale of between 3 and 5 years.

1- Clinical trials:

Blockchain technology will allow stakeholders involved in a clinical trial to verify the authenticity of a document, be it a consent form or scientific results. In addition, patients will be able to securely share real life data with pharmaceutical companies or research centers in exchange for a reward.

2- The management of the supply chain:

There is a growing interest in the use of Blockchain associated with IoT to monitor the evolution of physico-chemical variables (connected sensors of temperature, pressure, humidity, etc.) or of logistical data (sensor measuring stocks). By creating a common register between intermediaries in the supply chain, manufacturers want to improve their visibility on product and information flows in order to increase their responsiveness and reduce the costs of logistics that are often perceived as complex and opaque.

3- Quality Control:

Many tests to evaluate the quality of a product are carried out continuously in the pharmaceutical industry, especially on production lines. This process can be facilitated by storing data on an easily auditable registry using technology

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How to create value in the short term?

Blockchain technology can bring strategic value in the short term if companies follow 3 simple rules:

1- Identify the problems correctly:

Although this seems obvious, too many companies are working on use cases that do not reflect their real issues. The process of ideation and conceptualization of the project is therefore particularly important because it identifies useful applications that are specific to the company.

2- Take into account existing regulations and standards:

Regularly, projects seem attractive at first sight, do not come into production because the regulatory barriers were not taken into account during the experimentation phase. In addition, the absence of standards or recommendations around the use of Blockchain in health, discourages companies to take a stand and to invest in new projects. De facto, framing the Blockchain and its actors in a legally defined environment is of fundamental importance.

3- First optimize, then transform:

In the short term, it is likely that most applications will optimize existing processes rather than create new disruptive practices. As such, it is therefore essential to identify simple friction points that could benefit from the use of Blockchain technology. This will allow the ecosystem to learn new skills and really understand the operation and use of the technology.

Block chain concept on technology background

Disruption vs Optimization:

Blockchains have the potential to change practices in a wide range of industries. In health, the use cases can be classified in two categories, namely the optimization of the activity and the disruption of the company.

1- Optimization of the activity

This category includes all applications that enhance and optimize existing structures with the primary goal of reducing costs.

Payments :

Thanks to its distributed registry, the Blockchain can reduce the number of intermediaries and facilitate transactions between companies.

Record keeping:

Organizations in the health sector are known for their obligation to keep a record of their activities, whether in the pharmaceutical industry or in health facilities. Keeping a transparent and immutable registry can greatly facilitate audits and process flow

Proof of existence:

Health professionals can be subject to legal proceedings when patients feel they have not respected their commitments or done their work By keeping a digital fingerprint of documents reflecting their actions, organizations will be able to provide evidence undeniable and thus to facilitate procedures.

2- Disruption of the company

Data management:

Blockchain technology allows patients to take charge of their personal data. As such, they can decide if they want to share them, with whom and when. But this is also a great way for health professionals to share information with each other. Regarding the pharmaceutical industry, the concept of “reusable” data offers the patient the opportunity to share his information with several companies at the same time and to be rewarded. It is a safe bet that this easy access to patient data in a transparent and secure environment will have an impact on the relationship with the authorities and the process of placing health products on the market.

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Funding :

Initial Coin Offerings (ICO) represent an opportunity for both startups and large companies. In fact, this type of financing creates new models that allow large companies, for example, to invest in emerging companies and support them in creating value.

Encourage virtuous behavior:

In the age of preventative medicine, businesses and health professionals will be able to use tokens based on the blockchain to encourage their patients to adopt a healthy lifestyle. This approach is already tested by insurance companies.

In conclusion : 

By making information transparent and immutable, Blockchain brings trust by design to a network of actors. In an industry like health where this trust is essential, this technology can greatly enhance the image of health organizations and improve the relationship with the patient.Last but not least, the diffusion and adoption of the Blockchain can create a favorable climate for the implementation of other technologies and be the source of new solutions that are valuable for both patients and patients. companies. Disruption and optimization for some, incentive for others, Blockchain will be the common denominator of change.

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