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Healthcare Blockchain Dreams: 5 Things People Thought Would Happen By 2020

Health coins, patient rewards, programmable value transfer, network effects, disintermediation, consortia…

Around five years ago, a handful of innovators, academics, and futurists began predicting the future of blockchain in healthcare and other industries. What would a decentralized healthcare delivery system look like? Will patients pay for healthcare using a programmable health coin? What will happen to all the middlemen like the GPOs and the PBMs?

The hype seemed to grow like wildfire in 2016 after Blockchain Week in Shanghai and Distributed Health in Nashville. Companies including Gem, Hashed Health, Pokitdok, Change Healthcare, Phillips, and HealthCoin sprang into action with lofty visions of rapid adoption across a range of use cases. Working groups like the Hyperledger Healthcare Working Group were formed. Projects like the Synaptic Health Alliance and Bramble started to be imagined by the industry’s blockchain pioneers.

Blockchain caused optimism rarely seen in the history of healthcare. It was celebrated as a new technical revolution on par with the steam engine. Its promises to improve data integrity and security, drive new standards and disrupt the run-away healthcare system were irresistible. So, a parade of big ideas began to emerge as the next great hope for a better, more interoperable, more patient-centered healthcare system.

Here’s a review of what was being discussed during the early days and where these discussions stand today.

1. Blockchain would be the great disintermediator.

Bitcoin (the first blockchain network) was designed to disintermediate the bank. With Bitcoin, the job of the financial institution could now be handled by a borderless, publicly verifiable, immutable open-source shared ledger. The responsibility of the bank as a middleman could, for the first, time be transferred to software code. Frictionless direct payments with no fees were easy and immediate.

So, it should be no surprise that in 2015 we imagined a world where value transfer between buyers and sellers of healthcare products and services would no longer need today’s middleman.

It was an attractive proposition. The financial crisis of 2007-8 created the failures in trust that opened the door for Bitcoin to go mainstream. In 2015, healthcare had reached 17.6% of GDP. The costs were hitting consumers hard as high deductible healthcare plans were the norm. People blamed healthcare incumbents. Polls in 2015 showed that people saw insurance companies and pharma companies less favorably than banks, airlines, and even oil companies. The incumbents blamed the middlemen and the government. There was a growing crisis in trust, a lack of transparency, and a destructive competition for value between enterprises, their partners, and their customers.

People were looking for hope and found in blockchain the promise of a parallel, open healthcare system that prioritizes constituents other than the traditional incumbents.

Now, in 2020, we realize that disintermediation will not happen overnight. It will likely look more like re-intermediation than disintermediation. We strongly believe that blockchain and blockchain-inspired technologies will, over time, rearrange many of the value chains in healthcare and shed more light on who in those value chains are genuinely adding value. Many incumbents and value-adding middlemen are likely to still play a role, although it is expected that some jobs will change.

Meanwhile, the crisis of trust escalates. Pressure on the consumer continues to build, and the promise of a parallel system sits just beyond the next false top.

Disintermediation for the sake of disintermediation is no longer the central message. However, the promise of bringing trust, transparency, and incentive alignment still is at the center of our innovative efforts.

2. We would have decentralized healthcare organizations.

Bitcoin is a leaderless, borderless, user-owned, peer-to-peer network. There is no company behind Bitcoin. It is a decentralized, open-source network made up of thousands of network nodes and contributing engineers. There is no CEO and no service or tech department that keeps it running. Remarkably, it has never had a service interruption. It has never been hacked. And most people don’t realize that this leaderless, autonomous, borderless organization has a market cap of $134,090,326,657 (more than Paypal’s market cap of $128.8B; or Goldman Sachs $82.2B).

In 2016, engineers created the DAO, a Decentralized Autonomous Organization, inspired by the leaderless Bitcoin network. The DAO was a decentralized venture capital fund with no management structure or board of directors. It was funded through a global crowd-sale (over $100M) and was a stateless organization of actors who would vote on investment projects by using their tokens. Unfortunately, the DAO did not ultimately prove as resilient as the Bitcoin network. This failed experiment was brought down by a hacker in 2016 and was eventually taken offline.

These projects created a lot of early interest in decentralized business models. What would a decentralized autonomous healthcare system look like? What if we created a community-owned infrastructure for healthcare delivery? What if a CT scanner was owned not by a health system, but by the taxpayers of a community? How could decentralized autonomous organizations serve as an alternative to what we have today? A system made up of buyers and sellers, machines, and people using community governance, peer to peer transactions, identity and reputation systems, and programmable value transfer to incentivize behaviors and care for communities.

In 2020, elements of decentralization are a part of each project. For example, a successful project certainly needs a network of distributed entities working together under a shared structure. Many of the companies and business models that are gaining traction borrow as much from legacy company structures as they do from DAOs. And the reality is that healthcare is a highly regulated industry with specific concerns around privacy, confidentiality, and “the last mile.” As a result, we have traded many of our early idealistic visions for a strong dose of realism that has helped create the meaningful first steps we are seeing.

3. Consumers would use programmable healthcare cryptocurrencies.

At the center of much of the early blockchain hype was the idea of programmable value transfer through digital currencies that could move without friction. Cryptocurrencies and Initial Coin Offerings (ICOs) captured the world’s attention, especially in 2017 and early 2018. In 2017 alone, hundreds of companies raised over $7 billion, with a few projects raising over a billion dollars.

The dream of cryptocurrencies was that the consumer in healthcare could own tokens, which represented an interest in the project, driving network effects that healthcare had never seen before. Many believed that nirvana had arrived.

What we realized was that the technology is not ready for the consumer in healthcare. Patients and physicians and enterprises don’t want to trade their dollars for a startup’s cryptocurrency. The business plans felt like friction-as-a-service.

And because they used an ICO for funding, they entered an SEC no-fly zone by selling unregistered securities. Enterprises who don’t like risk quickly decided to stay clear of ICOs. Then, as the world tilted towards the enterprise, the ICOs were left without any customers. The bubble burst quickly in 2018.

According to recent research by Robert Miller, the healthcare companies who chose this route suffered greatly as a result. Many are dead (examples include Modum which raised $13M, Shivom which raised $35M), having squandered the millions of dollars raised from speculators around the world on dreamy consumer-focused use cases with no hope of scaling. Those that are not dead have lost almost all their value and are lying in the gutter hoping to cockroach their way to better days.

The future of the token economies is unclear. I believe we have not seen the end of the crypto story. The promise of network effects in healthcare is still there. The best way to really change healthcare is through the consumer. And projects like Libra (backed by Facebook, Mastercard, Paypal, Visa, and others) are starting to normalize the enterprise crypto conversation. Countries like China are building their own cryptocurrencies. The conversation will mature over time. Enterprises and consumers eventually will become more receptive. Many of us will be watching the horizon for the next set.

Meanwhile, the idea of programmable value transfer and new methods of incentivization is alive and well in 2020. Hashed Health’s Signal Stream application is one real example of a way to innovate around the design of contracts and incentivization structures. It programmatically ties value transfer between counterparties to data (business, clinical, other) that hits the ledger. But it doesn’t need cryptocurrency to do so. Fiat works well for now.

4. Consumers will control their medical records from their phones.

For three years, it seemed that every blockchain healthcare conversation would end up being a medical records conversation. I’ve always felt that the real conversation is one of cost (administrative burden, rational markets). The idea of opening and closing the door to my medical records using my cell phone was intriguing, but to me seemed disconnected.

The general idea for these projects is to enable the patient to hold their medical identity in a self-sovereign way. The patient controls access. The patient controls the creation of value from his or her data. In today’s world, this information is bought, sold, and stolen without true regard to the patient. Blockchain provides an interesting alternative where the patient is in control of their wallet, much like bitcoin. The patient generates value from the data created as you live your life.

In 2020, most medical records projects have died or moved overseas. Most were casualties of the ICO train wreck. Many have been broken by the realities of trying to work with legacy systems and/or the realities of trying to store sensitive information on a globally broadcasting, decentralized ledger.

However, this use case itself is not dead. It too will re-emerge out of the valley of despair. In fact, recently, Anthem, the second largest payer in the US, announced it would use blockchain to secure medical data for its 40 million members. Anthem is currently piloting the first version of this product where the user’s QR code acts as a key that allows medical records companies to move patient data securely.

5. Enterprise consortia would flourish.

Early efforts in healthcare were informed by companies like R3 in the financial services sector. R3 was the first to bring together large groups of banks to harness the promise of blockchain for frictionless business processes.

Blockchains do not work without network, so it was reasonable to think that consortia would come together as a first step. However, despite early efforts by Hashed Health and others, the enterprise blockchain healthcare consortia did not really start to emerge until 2019, once we understood the low-hanging use cases that would drive adoption.

Now, as we enter 2020, almost every insurance company and pharma company has announced participation. Health systems, IT companies, and non-traditional healthcare companies like PNC Bank and Walmart are also announcing their participation. Consortia are a hot topic in 2020.

So, the early predictions that enterprise consortia would emerge was correct, but it took longer than we had originally thought. Most of these consortia over the last year are convened around a specific use case (Professional Credentials Exchange for credentialing, Synaptic Health Alliance for directories, MELLODDY for drug discovery, MediLedger for pharma track & trace, etc). One, the Health Utility Network, took an interesting “governance first” approach, where the members (primarily insurance companies supported by IBM) came together around IBM’s technology to work out network governance first. Now that they have governance, they know how to apply that governance structure to different use cases.

The lesson? Timing is everything. Success in this space requires grit, flexibility, and teams that can endure. 2020 will be a big step forward in validating many of the critical assumptions the industry has made in terms of its early technical, business, and governance structures.


Hashed Health


Signal Stream


John Bass

Anthony Begando

Les Wilkinson

Giles Ward






Hashed Health

P.O. Box 58478
Nashville, TN 37205 
United States

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