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Do you have a Healthcare Blockchain Strategy?

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“You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.”  Fuller

Self-sovereignty, healthcare data as an emerging asset class, machine learning disease intervention, decentralized autonomous healthcare networks, eliminating intermediates such as insurance companies, oh my, are all quite powerful propositions or are they perhaps future capabilities for a new n-state global healthcare system?

But what are the real value propositions each of these and other capabilities bring separately or together? Better outcomes, lower costs, speedier delivery, or improved safety?  What about a basic patient income? What about the underpinnings of new healthcare economies, local ecosystems, and business models that have not been imagined?

Getting from here to there is a mighty lift, indeed, requiring plenty of sweat and tears from all of us turncoats, new incentives and motivations, and evolving from smoke signals, to tom-tom drums, to to the phone. Why do we really need payors or the government in healthcare? Are electronic health record companies necessary? Who will you trust in the future with your health? A Silicon Valley VC company? A machine learning company? A robo-doctor? For all those who share such a vision of open decentralized healthcare ecosystem nirvana, the work is just starting.

The healthcare blockchain industry is more or less following the same path sickled by those pioneers in banking and capital markets. The simple concept of a peer-to-peer digital cash system with no intermediary has spurred a massive movement (in many interesting directions) to create the next wave of the internet, new economies and organizations, enabling new types of assets, reshuffling market structures, moving power to the edges, and much more.

Where do you begin developing your understanding of what currently exists in this rapidly evolving and dynamic movement? What is here today, tomorrow, or the distant future? Where can you play? How do you engage it? What are your core beliefs?

Here are a few of mine:

  • Closed, permissioned blockchain, or shared infrastructure solutions have the potential to create only incremental industry-level efficiency gains, not disruption.  Successful future deployment of this type of solution is very use case specific and reeks with stealth centralization (and the traditional risk) and at times a solution seeking a problem. Most of the core capabilities today of open decentralized blockchains are not relevant in this segment hence the opportunistic, incumbent-friendly, evolution of Hyperledger, R3, EEA, and their “inspired” solutions. These are new cloud offerings both IBM and Microsoft have glom on to.
  • Meaningful healthcare industry disruption will emerge from innovation related to open decentralized networks and convergence of advanced technologies including IoT and machine learning. New economies, ecosystems, and autonomous organizations or new business models will dynamically evolve. Machine-to-machine protocols and networks will enable new ways of collecting and analyzing data and caring for patients.
  • Open decentralized networks will set the stage and create new markets for health data to evolve into a new asset class giving rise to consumers controlling the brokerage, monetization, and consumption of their data for research, precision health, clinical trials, payment, groceries, and disease intervention and management. Consumers will need to understand the benefits and responsibility that comes with the ownership and control of their self-sovereign data for successful adoption of amazing new services.
  • Healthcare administrators, risk managers, banks, and supply-chain trusted intermediates will be rolled up, displaced or diminished by new types of ecosystems that will draw consumers and providers from existing ecosystems to lower cost and perhaps income producing options.

That’s a mouth full.

Pacing and timing are critical at this stage of the game. There is significant new development occurring daily. Developments in core capabilities at the industry and academic level is briskly moving along. What segment of the market will you play in? Are you going to be eaten? How do you derisk your investments? There are many tripwires you and your team should be watching out for. There is a buffet of opportunities.

What are they?

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Decentralized Autonomous Nursing Organization Disrupts $12 Billion Staffing Industry

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Salary-tracking website Indeed.com states that the national average salary for nursing recruiters in the US is $85,000 a year.  Nice job!  Placement fees (per nurse professional) range from $3,000 to $20,000, depending on the type of position being filled.  Wow!  For doing what, exactly?  Spamming or cold calling nurses? Surfing LinkedIn? Emailing resumes?  Verifying credentials? Are recruiters seriously adding that much value?

It is no secret that the demand for nurses is growing rapidly worldwide.  In the US alone, demand for nursing is projected to grow at about 6% per annum across allied health, per diem nursing, travel nursing, and locum tenens.  The US nursing and allied health staffing market size is around $12 billion per annum. The increase for healthcare and nursing utilization is being driven by an aging population, government programs, and the implementation of readmission mitigation strategies.  Sustained healthcare staffing shortages will continue to drive temporary staffing demand.

The US nursing staffing market remains substantially fragmented with the top 10 players holding approximately 40% of the market.  No single firm maintains over 10% of the marketplace.

The US Nursing Staffing Market is Highly Fragmented

Disruption of disinter-mediating nursing recruiters

The primary value that recruiters provide is credentialing, vetting, and access. This model is about to be disrupted by way of the Blockchain.

Here is how one might go about doing this:  Create a decentralized, autonomous nursing organization (DANO), utilizing smart contracts and the Blockchain.  Basically, a DAO is a self-governing organization similar to a collaborative, but without the overhead, costs, and politics that come with human-intensive organizations.  Governance can be automated using electronic voting and advanced computerized rule-and-conditions encoded in smart contracts (Think Apps).  DANO can be equally owned by all of its nurse-members.

By virtual of belonging, nurses share in any and all profits derived from DANO.   The beauty of utilizing the Blockchain is that the value each member brings to the DANO can be easily tracked and verified on a public ledger. Members can sign up and be assigned a unique ID or address on the Blockchain’s publicly verifying registration.   Monthly and annual activity requirements, agreed upon by DANO members, can be monitored via a smart contract with the terms and conditions of membership quantified and approved by electronic vote.  Nurse credentials can be automatically verified using “oracles” connected via APIs available to universities, nursing boards, criminal background services, exclusion lists, and social credibility services such as LinkedIn.

Smart Compliance Contracts fed by the oracle could be developed between the nurses and the DAO, ensuring credentials, criminal records, and social compliance are vetted and updated. This essentially eliminates the manual work required to validate an applicant’s resume and good standing.  Nurse-members with expired credentials, criminal activity, etc., can be placed on suspension via the compliance contract (and cancellation of employment contract) depending on terms and conditions set forth in the Smart Employment Contract.  Now, we just got rid of the back room of the recruiting company.

Nurse-members who decide to go on the market could give the DAO permission to give the paying public pseudonymous access to their resumes in return for a viewing fee paid by the viewer which perhaps can be a share in a pool of subscription revenue that hospitals, clinics, and employers pay to access these profiles based on Smart Viewing Contracts established on the DANO Blockchain, by and between DANO and participating employers.

A simple video room utilizing opt-in machine learning oracles to analyze interview content, scoring for future learning and improved match-making, could be added to enhance the interviewing process for both nurse-members and employers.  Each and every step along the recruiting path could be a fee paid to the nurses’ public Blockchain account, perhaps in Bitcoin or some other prevailing digital currency in micro-payments.  This model will disrupt the recruiting landscape where employers incrementally pay to find the proverbial ‘needle in a haystack.’  Nurses will be paid for their time and effort versus payment to the recruiter.  Final employment offers, acceptances, and contract signing could be recorded on the Blockchain, too.

You clearly see where this is going: Namely, a shift away from commission-based recruiting and control to a nurse-controlled process utilizing a DAO model, Smart Contracts, and the Blockchain, to enforce and ensure credentialing and vetting, recording legal transactions between employee and employer, and the disinter-mediation of recruiters.

The savings can be significant to the employers and industry at large, perhaps reducing talent acquisition fees by as much as 60-80 percent and shifting control and value to DANO, away from the fragmented recruiting industry.

All industries must adapt as the Blockchain becomes a viable and efficient way to operate just as the brick and mortar retailers have since the inception of the internet and its inherent powerful online sales.

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