Up next in health care analytics: Blockchain

Blockchain is already in its third generation.

• It started in 2008 as the tracking database for bitcoin ownership, and companies soon began using blockchain for inter-organizational cooperation.
• Blockchain 2.0 gave rise to “Ethereum.” This is an open-source, public blockchain platform that enables small computer programs called “smart contracts.” Smart contracts enable exchange of new financial instruments that have attributes similar to currencies like the dollar, commodities like gold and securities like stocks.
• Today, with blockchain in its third phase of maturity, businesses are experimenting with it to track, trade, find, collect, synchronize and validate data.

Key to these efforts is finding ways to drive out costs associated with data management.

There’s a lot of hype and misinformation about what blockchain can and can’t do today.

• Blockchain is a digital ledger of transactions that are chronologically recorded and tamper-resistant.
• Blockchain makes it possible to trace information back to its original source and view every detail in between.
• It simplifies commercial relationships by letting an organization track and trade something of value (such as data) without a middleman.
• Blockchain enables organizations to collaborate on problems that post little or no risk to competitive positions. But even where there’s willingness, we may need to create incentives to participate.
• Blockchain use cases should be strongly vetted to confirm the ROI for participating organizations.
• When organizations strip away blockchain hype and understand its utility for solving data quality problems, they can begin to experiment.

We believe payers will take the lead and providers will join them to streamline back-office processes. Consumers will follow in the long-term as their records become available.

What’s unique about this technology is that blockchain requires density of adoption. That is, it requires a group of organizations who are willing to cooperate to test the efficacy of the technology.

Start by finding use cases that reflect business problems shared by many organizations in your ecosystem. Identify those that will benefit from working together to solve common data-sharing problems.

Ask these questions to guide how you identify a use case:

• Where is the overlap of data and data processes between our organizations?
• Where would the addition of mutually beneficial processes help?
• Where are the barriers or dependencies the lowest?

The answers will help you hone in on a use case that is productive and doable in the near term. It will identify those that can deliver value to all participants.

Blockchain works when organizations come together to share and audit information and automate common processes.

• The first step is evaluating the groups of organizations or types of organizations that will benefit from a single source of truth.
• As you build an alliance, you want to make sure that there’s a good cultural fit among members. Look at their appetite for early adoption of new technology, and look for people who are open and willing to learn.

We often start with IT professionals because the solution requires technological expertise to establish a blockchain node.

In particular, CIOs will need to educate their leadership on the benefits of joining forces with other organizations to tackle data problems and costs together.

Blockchain requires a different business mindset. Blockchain technology will put you in the race. Relationships will get you across the finish line. All alliance members are responsible for the result of the alliance, but none owns the blockchain. Instead, every participant is working together to solve an issue for the industry.

• Go to prospective members with a high-level conceptual overview.
• Present one that clearly demonstrates the mutual benefit of blockchain to solving a specific business issue.
• Define how the collaboration will work. Use a memorandum of understanding that defines roles and resource commitments.
• Tools can include project charters, governance processes and decision-making frameworks.

Ultimately, these efforts will culminate in a definitive legal agreement.

The beauty of blockchain is that it facilitates trust in the data. But that’s only the starting point. Defining the business benefits and building a business case for a blockchain project is critical to rallying support inside alliance organizations. When the rubber hits the road, it still comes down to:

• Creating a well-defined set of objectives
• Clarity around project scope
• An efficient organizational structure for the alliance
• Open and transparent communications
• A use case that will deliver return on investment for all alliance parties