Welcome to 2019!
As we think about our community’s 2019 goals and objectives in the healthcare blockchain space, I find it helps to reflect on the important and influential news of 2018. In this list, I have done my best to include projects and announcements that I consider real or indicative of a signal and not just noise. That does not mean there isn’t marketing and spin behind them. These announcements are from notable companies, but often have little detail. Several of them took me by surprise. It can be hard to tell how real they are. 2019 will tell us what kind of results are delivered from the strategies outlined in these events and announcements.
Upon reviewing this list, I noticed a few things:
- Maturation: We are still early in the evolution of blockchain technology in healthcare. The 2018 highlights offer a more mature view of blockchain / DLT success than what we have seen in the past. The HHS, Procredex, Synaptic, and Change announcements below all show various signs of strength and maturity. Much of this maturity is a result of non-technical achievements.
- Pivots, Acquisitions, and Wind-Downs: This maturity is also surfacing in announcements around acquisitions (Pokitdok), pivots (Gem pivots away from healthcare), and business model crisis (ICOs losing significant value). I enter 2019 realizing that many of the people I respect and who inspired me during my early days in the space are gone. Ted Tanner’s Pokitdok was acquired by Change. Micah Winkelspecht and Gem are now a crypto wallet company. Diego Espinoza is focused on fintech. It’s a reminder that innovation in healthcare is really hard work.
- B2B Trend: Most all of the success stories going in to 2019 are built upon DLT, not open blockchains. All of them look like B2B use cases.
- Health Systems Surprises: Health systems are generally considered to be fast followers at best. If they have $5 to invest, they typically put that money to use in a way that immediately and directly supports patient care (or an EMR implementation). However, our list includes three health systems who have stepped up with big announcements in 2018, as well as large name-brand health systems getting involved with more mature networks such as ProCredEx (credentialing) and Synaptic (directories).
- Provider Identity: Perhaps the two most mature networks of 2018 are ProCredEx and Synaptic. Both projects boast impressive product, business model and, perhaps most importantly, governance signs of life. Provider identity seems to be the drawing a lot of attention as the low hanging fruit.
- What 2018 Says about 2019: 2018 was not the year where we found out the true value of blockchain / DLT in healthcare, but at this point we do have an understanding of what use cases will get us there. The results of the efforts on this list will be told in 2019. If these results are positive, I expect enterprise interest in blockchain to spike to new levels in 2019 / 2020 as all the companies and investors who took a ‘wait and see’ approach jump in.
Here are my top 15 healthcare blockchain new highlights of 2018 (in no particular order).
Jose Arrieta & Oki Mek Become the HHS Blockchain Dream Team: Receive Federal Authority to Operate (ATO)
In December 2018 Jose Arrieta and Oki Mek received the first blockchain ATO (Authority to Operate) in the federal government. This announcement has made them like the Jordan and Pippen of the federal blockchain league.
While many others in the federal government and in the commercial space pilot and experiment, Arrieta’s team, with input from the Acquisition Workforce, has deployed a solution that improves access to a standard set of spend data in real-time and decentralizes the execution of logic from that data.
According to Arrieta, conservative estimates show HHS Accelerate having a measurable return on investment of over 800%. Those waiting for proof of value may have just found it.
This announcement proves that blockchain is being used to solve real problems in the government space. I expect Arrieta’s work to drive increased interest in blockchain solutions in the government space in 2019. This hard work has also created two of the federal government’s newest rockstars.
Change Healthcare Doubles Down on Blockchain / Acquires Pokitdok
Change Healthcare is the largest claims processor in the US. At the end of their 2018 fiscal year, they had processed nearly 14 billion transactions and $1.0 trillion in annual healthcare expenditures. They are a middleman with a unique perspective on the strengths and limitations of the current payment infrastructure in healthcare. They are also one of the earliest corporate adopters of blockchain technology in healthcare.
In 2017, they hired Emily Vaughn Bailey from Gem (who, in 2018, pivoted away from healthcare and their blockchain OS to being a crypto-wallet) to lead their blockchain strategy. In 2018, they doubled down on their blockchain position with a series of announcements.
First, in January 2018, Change announced the general availability of “the first enterprise-scale blockchain solution for healthcare.” Their solution, which is built on Fabric processes a daily payload of 50 million claim events and scales up to 550 transactions per second.
Then, in December 2018, Change announced they were acquiring Pokitdok who, under the leadership of Ted Tanner, was an early leader in the blockchain space. From the press release it seems that Change is focused on the Pokitdok assets (API technologies, blockchain use case assets, network assets), rather than its talent. The combination of Pokidok’s API marketplace with Change’s legacy payment infrastructure could open the door to some excellent opportunities for Change.
Senator Bill Frist’s Distributed:Health 2018 Keynote
One signal of the maturation of the blockchain market were the companies on stage and in attendance at this year’s Distributed:Health conference. Distributed:Health is the premier healthcare blockchain conference in the world. What began in 2016 as a relatively obscure conference of early thought-leaders has evolved in to a legit healthcare conference of over 700 people from around the globe.
The day one keynote speaker was former Senate Majority Leader Bill Frist (followed by an excellent panel with Michael Painter of The Robert Wood Johnson Foundation), who summarized his experience at Distributed:Health 18 and his thoughtful view of how the technology has matured in this Forbes article published in October.
Source/More: The 2018 Stories that shaped Blockchain in Healthcare | Hashed Health