Bob Krohn, partner and healthcare practice lead at technology research and advisory firm Information Services Group in Stamford, Conn., discusses blockchain as an emerging trend in healthcare and what regulations the technology is poised to face.
Responses have been lightly edited for clarity and length.
Question: Where is blockchain in healthcare now and how will it develop in 2019?
Bob Krohn: As compared to other industries, healthcare's investment in blockchain has lagged substantially. As we look forward to 2019, we see blockchain as the emerging trend in healthcare technology. Most large healthcare payers, hospitals and health systems understand the value that can be unlocked through blockchain and are actively investing in pilots or solutions.
Astute leaders in hospitals and health systems understand that much can be learned from our colleagues in life sciences and pharmaceuticals. At the conclusion of 2018, we witnessed a paradigm shift in cross-enterprise alignment in the healthcare and life sciences industries on the topic of blockchain. Enterprises have begun to align themselves with the help of knowledge-sharing outlets including, for example:
Distributed health— An industry blockchain consortium and event that achieved more than 500 participants in November 2018. Firms represented as panelist and presenters included Anthem, Humana, Change Healthcare, TIBCO Software, Pfizer, Amgen and Novartis.
MediLedger— An industry consortium established to address the FDA's Drug Supply Chain Security Act. The DSCSA outlines requirements for organizations to develop and enhance drug supply chain security by 2023.With an emphasis on leveraging blockchain technology to track and trace the provenance of prescription medicine throughout the supply chain, the MediLedger consortium includes notable members such as AmerisourceBergen, Genentech, Pfizer, Gilead Sciences and McKesson Corp.
Q: What do you think will be the most significant blockchain applications in healthcare over the next five years?
BK: One of the most interesting applications of blockchain in 2019 will be in EMRs. Once an EMR is complete, blockchain technology can seamlessly communicate this information to involved parties. When a blockchain solution is properly implemented, it supplies auditable proof that the content of a medical record has not been altered. The potential for improved efficiency and savings across payers, hospitals and health systems could amount to billions of dollars.
It is also important to note in 2019 that organizations will begin to realize the value of blockchain solutions in addressing FDA DSCSA requirements as they relate to the pharmaceutical supply chain. From manufacturers to distributors and dispensaries, organizations that comply with DSCSA and blockchain thought leaders will begin to achieve internal competitive advantages over those industry peers that lack an awareness or understanding of market trends and the solutions actively being developed.
Q: What do health IT leaders at hospitals and health systems need to know about blockchain today?
BK: Although blockchain is still relatively immature in our industry, IT leaders at hospitals and health systems need to understand that it is coming, and it will have a transformative effect. It is highly probable that someone within the organization is exploring blockchain technology. Many of the leaders we are actively working with on blockchain are outside of traditional IT organizations and are found in enterprise strategy or supply chain roles. IT leaders should reach out to blockchain thought leaders and get aligned on a formalized strategy. This strategy should consider the lessons learned from other industries. If you are a leader of a small to mid-size hospital or health system, you need to closely monitor your larger competition and plan accordingly.
As referenced above, it is important for leaders of hospitals and health systems to realize that the FDA's DSCSA will have a direct impact on the way they operate — mandated with a 2023 compliance deadline. Every hospital can be considered a dispensary of pharmaceuticals — and therefore considered in the same group of retail dispensaries that includes CVS, Walgreens, etc.
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