How Blockchain Will Change The Healthcare Insurance Industry

Blockchain is a new technology that is disrupting the healthcare insurance industry. The healthcare industry spends billions of dollars on fraud each year, and blockchain promises to eliminate this problem entirely. Blockchain is also helping to create transparency in the industry by storing data in a decentralized database that cannot be tampered with or deleted. Someday, we may even be able to store our health records on the blockchain.

The state of healthcare insurance today

Doctors, specialists, and other medical professionals are each in charge of the health information for a patient. However, when a single person sees many different doctors over their lifetime, it becomes difficult to share that sensitive data with each provider and insurance company without violating confidentiality laws.

This inefficiency of data management and transfer between providers and insurance companies can lead to denied claims from expensive medical procedures which results in wasted time (and money) on both sides. Hospitals account for $262 billion in annual losses due to this problem.

Another issue is the customer service side of healthcare insurance. Customers are spending more time trying to resolve issues with their providers, insurers, and hospitals instead of focusing on health concerns. There is an infinite number of ways for someone can make a mistake when inputting information into any computer system which can create errors in claims or procedures that lead to other problems. Blockchain can be used to alleviate this problem by creating a decentralized database that is immutable and cannot be tampered with.

HIPAA is a set of regulations in the United States that was created to protect patient data, but it comes with an unfortunate side-effect. Private information becomes hard for providers and insurers to share due to these strict laws. This leads not only to increased paperwork but also higher costs across healthcare administration per person than countries like Switzerland or Canada who don't have such stringent requirements. In America alone, we spend 1/3 more money on patient's needs due to this lack of coordination.

How blockchain will change the healthcare insurance industry

Blockchain technology might be the answer to help solve these nagging issues. Encrypted information makes your identity safer when transferring records so vital details about patients aren't lost. Blockchain technology can help encrypt medical history while still protecting privacy from unauthorized intrusion so these providers have access as needed but don’t violate those confidentiality laws by seeing too much personal information about patients outside of what treatment they need.

By storing medical records on the blockchain, it will help prevent fraud and theft. It is almost impossible to alter information on a blockchain system without being detected because of its decentralized architecture, and once any changes are made they are immediately visible. Blockchain technology may also help reduce claims rejections by keeping records more accurate and complete. Blockchain could help share this information with providers if they need access to it while not sharing it with others who don't.

Health insurance companies are implementing blockchain too, as they can use this technology to process claims faster than ever before by tracking all the information about a claim in real-time, and automatically validate and approve data for payments and reimbursements. This helps keep costs down which is beneficial for both the customer and the insurance companies.

Currently, there is an alliance between IBM and healthcare provider Humana to create a blockchain solution that helps insurers manage benefits more effectively by using smart contracts which automate how claims are processed based on predetermined rules.

Challenges with implementing blockchain in healthcare insurance

The biggest challenge with implementing blockchain in the healthcare industry is educating stakeholders. Blockchain will not solve all of these issues on its own, and many people are still unfamiliar with how it could be beneficial to them.

Although some healthcare insurance companies should adopt blockchain systems, there are still challenges to overcome. For example, data security is a concern that might lead to more cyber attacks if not properly protected. To combat this risk, healthcare providers can use two-factor authentication and other safety features when accessing this information on the blockchain network.

Another challenge is the cost of implementing blockchain. As with any new technology, there are growing pains before ultimately reaching a beneficial point, and for blockchain, it will be no different.  Healthcare providers will need to invest in hardware and software to make the transition from centralized databases to the blockchain, which means these costs will be passed on to their customers.

Educating stakeholders about blockchain is key to addressing many of the challenges that arise when bringing this technology into existing infrastructure. The biggest hurdle may be educating regulators so that laws can be passed to create a more favorable environment for blockchain to flourish within the medical and insurance industries.

Cost is also an issue that can be resolved by preparing ahead of time for the financial burden caused by switching to blockchain technology. Blockchain is still a relatively new technology, and the costs will decrease as this system matures.

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Blockchain technology is an innovative solution to a problem we've all been faced with: how do you maintain patient privacy, and yet create industry-wide synchronized repositories of healthcare data? The answer lies in blockchain's ability to cryptographically secure information. Blockchain can help us return control of medical data back into the hands of patients themselves by giving them the power to share their own access on a case-by-case basis.

Blockchain technology should help the healthcare insurance industry improve its infrastructure in a way that will prevent fraud and theft, increase efficiency, and make record-keeping more transparent.

Blockchain could enable granular permissions settings to comply with regulations while allowing data to be anonymized and shared for research. Meanwhile, any time a change is made on the document it’s recorded on the shared ledger which allows insurers and providers to audit medical information across organizations.