JPM2018: Healthcare And The Hype Around Blockchain

​Bá Minuzzi - b@babel.ventures

We all know that new technologies often follow an unpredictable hype cycle. It was intriguing to see 2017 end with a flurry of attention on cryptocurrencies. More than cryptocurrencies, the hype that surrounds an innovation that I’m particularly fascinated by; the blockchain – a decentralized and encrypted way of distributing, sharing, and storing information and value.

Critics argue it’s all hype, but is that believable? At the JP Morgan Healthcare Conference this Monday, it was made clear to me that related developments are definitely not all hype, as the excitement regarding blockchain technology in healthcare is tangible.

For those who are not familiar, JPMHC is the SuperBowl of life sciences— the largest spectacle in “HealthTech” each year. It’s so big that it attracts close to 40,000 professionals from the industry and beyond, with more than 450 companies scheduled to present at the conference, setting the stage for the year ahead. This event kickstarts the year with innovation, trends, investments, and acquisition announcements. Investors meet companies, get deals done, and also make new connections while renewing networks.

As we begin to grasp the advantages and shortcomings of blockchain technology, it begs the question: What can the blockchain and distributed ledger tech (DLT) do for healthcare?

One of the use cases that typically pop up with to blockchain tech, is its unique potential to empower patients to securely own their data. This is an extraordinary paradigm shift in the current patient experience, nevertheless there are even more applications of this technology that could enhance healthcare. Below I emphasize a few use cases:

Clinical data sharing: Instead of storing patient data, blockchains could be used to store access controls – like who a patient has authorized to see their health data – even if the clinical data itself is stored by the EHR (Electronic Health Record).

Public health: As an example, an influenza reporting system – an immutable, shared stream of de-identified patient information could more readily identify pandemics, independent of governmental bodies currently aggregating this data.

Research and clinical trials: Trial results and distribution of patient consent could foster better data sharing, clinical safety analyses and audit trials.

Financial and administrative information: Eligibility for insurance and claims processing workflows could benefit from blockchain and have decreased transactional costs.

Patient and provider identity: For travel lovers, imagine a national (or international) patient or provider identities that could be secured on a distributed ledger, which provides the basis for health data portability and security.

Connected Medical Devices: Personal health devices, “wearables,” “Internet of Things” (IOT) devices, and patient-reported outcomes are just some examples of patient-generated data that could leverage blockchains and DLT for security and sharing.

Most of these use cases are top-down: data used and generated on behalf of patients. From where I’m standing, the greatest potential of blockchain technology is the empowerment of patients to own and gather their own data. In many ways, the promise of blockchains lies outside the current health information technology framework – directly challenging the divided, centralized data stores that dominate healthcare data today.

Let’s take healthcare systems around the world as an example. Most suffer from lack of interoperability between domains. Healthcare record systems – in the US, as well as in Brazil – are composed of an enormous number of disconnected databases. Medical histories are divided, keeping doctors and patients from developing complete health records. Records are filled by different entities – hospitals, provider offices, pharmacies, etc. that often use incompatible databases. I struggle to understand why the industry cannot share information digitally and easily, and often, the fall-back is to have the patient carrying a piece of paper, which will then be entered into another digital system again. This lack of connectivity leads to inefficiencies and errors.

As an investor, I'm very optimistic about the technology, and I'm not in a hurry.

I like to map the sectors I'm going to invest in, so I have time to study each trend, the relation of new technologies with other markets, and the direct impact they have on each other. For me it is very important to keep as far as possible from the popular FOMO (Fear Of Missing Out) and focus on more grounded fundamentals for every investment we make.

Keeping my radar on in specific startups, direct contact with founders that are disrupting the industry and active conversations, comparing notes with fellow VCs who are also excited by the same thesis as myself is something that has worked very well for Babel.

Below you can see what I mean when I say I like to map the market. This is my interests map for 2018, and I will explain to you a little more about some of the start-ups that I illustrated in the blockchain quadrant, the ones I’m more excited about.

• Doc.Ai. Is developing a blockchain platform where patients can discuss their medical data with a "doctor" of advanced artificial intelligence. The platform works as a Software-as-a-Service (SaaS), providing services to medical companies, which will allow their patients to have personalized conversations about their health 24 hours a day. The company plans to launch 3 platforms: Rogo-genomics, Robo-hematology and Robo-anatomic. For example, the Robo-Genomics platform is a deep conversation agent, which was developed to improve understanding of genetic data and provide support of decisions.

• Factom. Through a decentralized system, Factom stores the world’s data. In 2016, the company received a grant from the Bill & Melinda Gates Foundation to deploy blockchain technology for globally distributed medical records with biometric verification. This brings greater efficiency, security and confidence not only to the patients but to the entire system, aiming to strengthen the global health infrastructure. Factom uses blockchain technology for smart contracts, digital assets, and database integrity.

• Gem Health is a division of an LA-based blockchain startup, Gem.. The GemOS healthcare software enables all relevant stakeholders to securely access shareable data with the correct permissions. The platform is HIPAA-compliant and already works with major players in the market. Philips was the first major healthcare provider to join the Gem Health network. The greatest advantage that Gem enables is the creation of global health data standards without compromising privacy or security

• MediLedger launched in 2017 and was able to successfully bring manufacturers and pharmaceutical wholesalers who compete with one another to the same table. Together, the group, which includes some industry giants such as Genentech and Pfizer, has completed a pilot program where they designed and implemented a process to use blockchain technology to improve tracking capabilities for prescription drugs. Built to support the requirements of the US Drug Supply Chain Security Act (DSCSA), MediLedger is also developing an electronic,interoperable system to identify and track certain prescribed drugs. This allows it to not only meet the requirements of the law, but the operational needs of the healthcare industry.

• ScalaMed is provides a decentralized application for patients, physicians, and pharmacists to manage, prescribe, and dispense prescription drugs. The company believes in empowering consumers on their health journey. They are building a scalable, integrated, and secure platform to manage health data and transactions.

• MedRec is a health record system built developed for organization and management of medical files. It was created by MIT graduate students along with senior scientist Andrew Lippmann. The system is designed for patients to monitor their medical data, including EHR clinical records and personal data using the Ethereum Blockchain to create decentralized content management.

• PokitDok is a platform-as-a-service. PokitDok is great for its level of efficiency and practicality, by making a collection of APIs available. The startup provides an on-premises framework where developers can finally create applications and services that are easy to adopt in some sectors of the health system. Considering that the health market is historically averse to innovation and has been extremely slow to adopt digitization, it’s a great solution.

• SAAHVA leverages public blockhain technology to make verify data integrity existing legacy database systems, maintain data privacy, restore trust, and maintain compatibility with HIPAA. This solution will prevent fraud like the VA scandal in 2014 from happening again.

• Tierion was the first company to join Philips' Blockchain Lab to explore the possibilities of blockchain technology for the healthcare market. The company has also partnered with Microsoft to create a service that links data to the blockchain to prove its existence and integrity. Tierion HashAPI allows developers to anchor up to 100 records per second in the block for free, with timestamp and data security.

Obviously, a new system is needed. It needs to be robust against outside attacks and be able to offer patients full control over permission to use their data. It appears blockchains and distributed ledgers can and should be the technology to build it. As a healthcare and blockchain technology venture capital investor, I’m very enthusiastic about an exciting year ahead for healthcare innovation, venture investments, exits, social change and EMPOWERMENT.

Bá Minuzzi - b@babel.ventures

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