Digital Disruption| September 5, 2018
Digital Disruption: The Transformation of Blockchain in Healthcare
As blockchain continues to build momentum, there remains varying perceptions of the efficacy of blockchain technology. For its 2018 Global Blockchain Survey, Deloitte surveyed over 1000 senior executives worldwide to investigate attitudes toward blockchain, and gain insights into potential trends and impacts of this new digital disruption across industries.
Deloitte’s report targets executives familiar with blockchain and their companies’ innovation initiatives to explore certain issues such as the gap between the interest in blockchain and practical adoption or implementation.
From various trends in blockchain across industries, it is clear that an increasing number of companies are moving past the stage of exploration and into identifying applications and testing solutions.
While it is yet to be seen whether blockchain will uphold its promises in delivering various real-world benefits and value, it remains pertinent for healthcare organizations to understand the advantages and value of blockchain, and be aware of key trends to leverage valuable opportunities as they arise.
Executive opinions about blockchain technology
According to Deloitte’s survey, over 40% of executives view blockchain as a ‘top 5’ strategic priority. More significantly, less than 10% of executives surveyed disregard blockchain as irrelevant or are unsure about its relevance, representing an overwhelming acknowledgment of the potential of this new technology.
65% of executives estimated that they would invest at least $1 million in blockchain technology in the next year, with nearly 40% estimating an investment of over $5 million. As investments drive innovation forward, these results suggest that executives are beginning to recognize the specific ways blockchain can complement their organization.
Furthermore, there is an overwhelming belief (84%) in the scalability and eventual mainstream adoption of blockchain. Even though 39% of those surveyed still believed that the potential and applications of blockchain is overhyped, there remains a strong conviction in the compelling solutions blockchain can bring to different industries.
The report also includes a survey of whether executives believe blockchain will disrupt their industry. For healthcare specifically, 55% of healthcare executives believe that blockchain technology will disrupt the healthcare industry.
Barriers to blockchain adoption
When considering organizational barriers, the Deloitte survey concludes that the top concern for executives is regulatory issues, followed by implementation, and potential security threats.
Investing in digital disruption can also be expensive. Uncertainty regarding the ROI of new technology is another of the most significant barriers to adoption. However, there are ways to ensure that ROI is being properly measured to help mitigate that uncertainty. With an informed, structured approach to analyzing investments like blockchain, companies can bring about long-term cost savings.
Deloitte’s report reveals that healthcare currently lags behind other industries in terms of blockchain investments and its ‘blockchain journey.’ When looking at cumulative investments to date, industries such as automotive, life sciences, oil & gas, and media take the lead.
Additionally, fewer healthcare companies are currently in the production and deployment phase compared to companies in other industries. However, high awareness and experimentation with blockchain suggests healthy future growth with healthcare technology.
Blockchain potential and growth in healthcare
As stated in the Deloitte report, “Blockchain is a versatile technology that can record financial transactions, store medical records, or even track the flow of goods, information, and payments through a supply chain. Ultimately, it’s more of a business model enabler, than a technology.”
While blockchain is not the ‘be all end all,’ there are numerous challenge areas in the healthcare industry that can be mitigated with blockchain technology, including data security, interoperability, and data accessibility. For instance, data breaches are particularly costly for healthcare in comparison to other industries, with costs in healthcare 2.5 times greater than the global average across industries.
In line with blockchain’s capabilities, executives surveyed by Deloitte recognize and value certain advantages of blockchain over existing systems: greater speed in terms of information exchange and operational capabilities, increased revenue streams, greater security and lower risk, and overall lower costs.
As blockchain solutions in healthcare continue to be realized, BIS Research estimates in a report that blockchain in healthcare will grow to reach over $5.6 billion by the end of 2025. Moreover, blockchain’s advantages in cutting costs related to data breaches, operations, IT, and fraud are projected to save the industry up to $150 billion per year by 2025.
One of the main growth drivers for blockchain in healthcare is investment by established healthcare organizations. In recognition of the value blockchain can contribute, Deloitte’s survey finds, “63 percent of health care organization respondents (providers and health plans) say they are planning to invest more than $1 million over the next calendar year. The figure is even higher for life sciences organizations where 33 percent plan to invest between $5 million and $10 million over the same period.”
Many top healthtech startups are also disrupting and addressing the pain points of the healthcare space with blockchain technology, reaping additional long-term benefits for companies such as competitive advantages, cost savings, and ROI.
Blockchain is an investment in the future that reinvents processes to optimize efficiencies, while also cutting costs and increasing value along the line from providers to consumers.
As with all new ideas and technology, skepticism is a natural response. However, evolving people’s mindsets around how blockchain can change their organization is key to continued industry growth, as seen by growing investments in blockchain technology.
While blockchain may be a worthwhile investment, adopting blockchain solutions is not immediately necessary for all organizations. It is wise to evaluate each organization’s areas of need to determine how blockchain can best be used to improve the organization’s processes.
Regardless, organizations need to remain aware and open to new advancements, and acknowledge blockchain’s potential to bring about new efficiencies.
As the Deloitte survey report aptly concludes, “As connections are made between blockchain and other emerging technologies, we see the potential for blockchain to help organizations create and realize new value for businesses beyond anything we can imagine with existing technologies.”