In April two of the largest U.S. health insurers, Humana and UnitedHealth Group disclosed they were working on a blockchain pilot. The partners are Quest Diagnostics and technology and data companies Multiplan and Optum. Today they announced they will be joined by insurer Aetna (now part of CVS group) and Catholic healthcare company Ascension.
The consortium, the Synaptic Health Alliance, is working on a provider directory. The project involves identifying all the hospitals and medical practices, their staff, licenses and qualifications. Federal and state laws legislate that health plans maintain this information and it’s estimated that it costs $2.1 billion a year to acquire and maintain the data.
The pilot aims to share the data using blockchain, thereby saving costs and increasing quality. The quality improvements may come from more up-to-date information and less human error.
The non-profit consortium CAQH is already servicing the sector with a non-blockchain solution, the centralized provider directory called DirectAssure.
Related initiative ProCredEx
A few weeks ago Hashed Health launched ProCredEx which is another blockchain consortium targeting a similar issue. Instead of approaching it from the insurer perspective, it’s tackling the credentialing aspect purely from the point of view of the provider, especially hospitals. Today the credentialing process can take four to six months to complete.
One of the ProCredEx partners takes an average of 80 days to credential a new member of the team. Each day of delay costs them $7,500. So if blockchain could reduce that from 80 to 60 days, that’s a net benefit or ROI of $55 million.
But also once one organization has verified credentials, that data is potentially available for others to use going forward.
Hence, there’s a good chance that Synaptic and ProCredEx may work together in the future.
A new business model
Talking at the recent Blockchain in Insurance Summit in Philadelphia, John Bass, CEO of Hashed Health, discussed ProCredEx. Below is a transcript of the relevant segment.
“You need a blockchain because you want to ensure the pedigree of this data. Primary source verification of these digital artifacts relating to a physicians identity are critically important. You have to be able to prove that you’re receiving that from the source. That’s why you need a blockchain.”
“By using a distributed ledger for this, you’re enabling a whole new business model — a whole new business approach to this old problem where I’m credentialing. The new business model is a marketplace, and the digital asset on that marketplace is that primary source verified digital artifact. The people who provide these artifacts are the people who have them.”
“All of a sudden insurance companies like NGS (National Government Services) or WellCare and hospital systems like Spectrum and The Hardenbergh Group can take these digital assets and put them on this marketplace to consume and create value for themselves in doing so. So not only are you decreasing the time and cost and effort it takes to credential a new physician, that’s where the ROI is.”
“But you’re also taking an idle resource, an idle database that’s a cost center now, exposing that to the community as a utility, and allowing those people who have that information to derive value for themselves in a whole new way. It’s a brand new, fresh, exciting conversation to an old problem that everyone suffers from.”