Blockchain technology may not be the panacea for healthcare industry challenges, but it holds the potential to save billions of dollars by optimizing current workflows and disintermediating some high-cost gatekeepers, according to a new study.
The study, “Global Blockchain Technology Market in the Healthcare Industry, 2018-2022,” from Frost & Sullivan, analyzed the current vendor landscape, funding trends, and actual commercial adoption by key healthcare stakeholders globally. Frost & Sullivan’s research team analyzed more than 250 vendors to understand their blockchain products, solutions, projects, functional, and application focus for the healthcare industry. To estimate blockchain commercial market size and future projection, a global analysis of current commercial deployments, major industry collaboration (consortium/working groups) on pilot projects, and funding trends were undertaken.
“It’s time for progressive healthcare companies to start shifting focus from ‘what is blockchain?’ to ‘where I should invest in blockchain?’. Considering most blockchain projects and vendors’ solutions are at early stage, it is essential for healthcare buyers to undertake a thorough assessment to invest or engage with most promising options,” says Kamaljit Behera, transformational health industry analyst at Frost & Sullivan, and author of the report. “This is exactly what our current research study aims to answer to help healthcare industry stakeholders make informed decision making.”
Also, given that blockchain is a network play, becoming a part of prominent healthcare focused consortiums such as synoptic, Hashed Health (ProCredEx), IBM’s Blockchain Health Utility Network, Melloddy (by IMI), and Medibloc, among others will be critical consideration for future success, according to Behera.
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Some of the key findings of the study include:
- Market overview. While relatively immature, blockchain in healthcare is slowly starting to migrate from pilot proof of concept to commercial deployments, mainly across select enterprise-level B2B-focused use cases (e.g., credentialing, claim adjudication, supply chain, etc.), and demonstrating initial return on investments. Payers, providers, and pharmaceutical companies are expected to be the early adopters of blockchain systems compared to other healthcare stakeholders. For example, 2018 was a record year for collaboration on healthcare-focused consortia.
- Industry unmet need: Based on industry estimates, about $455 billion in global healthcare spending is lost every year due to fraud, waste, and abuse. As the healthcare market struggles to find the trade-off between the risk and reward of going digital, the potential application of blockchain technology provides a timely solution to mitigate some of its pressing needs around trust and security with digital workflows.
- Key growth opportunities. Early commercial success, mainly across select use cases such as health professional credentialing, medical billing management, contract adjudication, and pharma supply chain track-and-trace use cases, and personal health records (PHR) among others are helping this market grow at a robust CAGR of 61.4% between 2018 and 2022. For example, application of blockchain across medical billing/revenue cycle management and drug supply chain management applications demonstrate the highest cost-saving potential in the next two to three years, while provider credentialing is being explored as one of the early applications by leading payers and providers in the U.S. market. “PHRs use case is regarded as the Holy Grail for DLTs [distributed ledger technology] application in healthcare, as it offers a fresh approach to healthcare data interoperability by ensuring trusted and patient-centric data governance approach. However, the large-scale commercial deployment of PHR application seems more feasible in the Europe and Asian countries whose data vendor ecosystem is relatively less complex when compared to the U.S. market,” Behera says.
- Technology convergence potential. Blockchain technology provides the much-needed trust, security, and auditability for healthcare data to intelligence journey, according to Behera. “More specifically, the interplay/convergence potential between three emerging technologies namely, blockchain, AI [artificial intelligence], and the Internet of Things, will further catalyze the space of innovation adoption and related applications in the healthcare realm,” he says. “More specifically, convergence of blockchain and AI will provide healthcare stakeholders a new federated learning system to promote medical research. However, convergence is not a process that will happen immediately, nor be a simple and linear progression. In the future, DLTs will be used by telehealth vendors and tech giants to monetize data science and analytical services with innovative patient-centric care models.”
- Regional trends. U.S. companies hold the lion’s share in terms of healthcare blockchain funding, according to Behera. “However, with favorable government policies, legal ICOs (initial coin offering, a new mechanism to raise funds in the DLT/blockchain space, similar to IPOs but with less rigor)/crypto regulations, and innovation culture across countries such as Estonia, Switzerland, United Kingdom, Russia, South Korea, and Singapore have managed to attract some of the biggest blockchain ICO/funding in the last two to three years,” he says.