Blockchain - The Future of Healthcare Finance
The recent tragic case of the UnitedHealthcare CEO’s murder has sparked widespread speculation about the motives. At any rate, it is a stark reminder of the urgent need for change in the US healthcare system. As a young PhD student in Massachusetts, I learned that the US healthcare system is the most expensive in the world but does not deliver on the life expectancy of the American people. Moreover, bills are notoriously opaque, and according to Statista, the percentage of adults who cannot pay overdue medical bills is 24%.
Globally, systems range from fully public healthcare to out-of-pocket models. Still, a common denominator is the role of intermediaries - entities that collect funds and distribute them to providers while taking a percentage. This cut is capped in some systems, but in others, profit motives can lead to cost-denial tactics that harm doctors and patients.
Fortunately, the healthcare payment process is already largely digitised. However, it remains riddled with inefficiencies, payment delays, and mistrust. Earlier this year, the hacking of UnitedHealth Group (the parent company of UnitedHealthcare) caused massive reimbursement delays, highlighting how fragile the current systems are. Doctors and patients bear the brunt, left at the mercy of intermediaries like insurers, who can unilaterally change agreements or delay payments. The system, not just in the U.S. but globally, needs to be fixed.
How Could Blockchain Fix Healthcare Payments?
I firmly believe that blockchain holds the key to revolutionizing healthcare payments. Its potential surpasses even the emerging innovations in decentralised science (DeSci). Drawing inspiration from decentralised finance (DeFi), blockchain can eliminate intermediaries through digital money and smart contracts, streamlining administrative processes while improving transparency and trust. This potential is a beacon of hope for the future of healthcare finance.
Blockchain could significantly reduce delays and overhead costs by decentralising payment systems. Payment agreements between patients, providers, and payers could be automated, ensuring that funds are distributed based on predefined conditions without manual interference or profit-driven decisions. Transparency in how and when payments occur could restore trust in the healthcare system.
Beyond Payments: Tokenizing Healthcare Outcomes
Blockchain’s potential extends beyond simple financial transactions. Medical treatment outcomes could be quantified, tokenised, and traded as digital assets like NFTs. For example, improvements in health or survival rates could be represented as claims on successful treatments. These tokens could form the foundation of outcome-based payment systems, prediction markets for medical advances, and even securitisation of healthcare risks.
This approach, however, presents challenges, especially for conditions like oncology, where treatment outcomes may take years to materialise. Yet, it opens exciting possibilities for incentivising innovation, increasing transparency, and reducing financial risks across healthcare.
A Sandbox for Testing: Dentistry
Dentistry is an overlooked area ripe for blockchain innovation. Procedures are limited, standardized, and often paid out of pocket, and patients are accustomed to making informed decisions about their care. Dentistry could serve as a low-risk sandbox to pilot blockchain-based health plans.
Here’s how it could work:
- Patients contribute to a shared liquidity pool.
- They decide on coverage options and could even receive refunds for unused funds.
- Data-sharing incentives could lower costs further, encouraging preventive care.
Peer-to-Peer Health Plans
Blockchain enables peer-to-peer health plans, allowing groups like rare disease patients and specialised treatment centers to co-create reimbursement rules. Even traditional insurers could adopt such models, contributing to liquidity pools to mitigate the financial risk of high-cost patients.
In Summary
Decentralising risk, automating processes, and ensuring transparency are the pillars of blockchain’s transformative potential in healthcare. Whether simplifying payments, creating outcome-based markets, or piloting innovative insurance models, blockchain offers a path to a fairer, more efficient system.
If you want to explore or pilot blockchain solutions for healthcare payments and insurance, contact us at dHealth. Together, we can shape the future of healthcare finance.
Foto von Marek Studzinski auf Unsplash
