This is part II in a series on web3. Make sure you read part I here.
Yes, along with literally every healthcare entrepreneur, I think Electronic Medical Records are broken. Hospitals own your data as one of their core business assets, actively trying to keep you coming back to their system, and monetizing it without paying you a penny.
I spoke with Kat Kuzmeskas, CEO of Tamarin Health, who is the most competent entrepreneur I’ve met in this space. She has been diligently building her company since 2016 and has deeply thought about the space and the impact it can create.
One of the core promises of web3 is to separate the ownership of the data from centralized organizations to the users themselves. Albert Wegner from USV eloquently described this in his web3/crypto:Why Bother? post. Blockchains are terribly inefficient at most things. However, they do two things extremely well – data stored in them doesn’t need to be validated by a centralized ledger, along with perfect visibility for changes in the past.
It’s easy to imagine how blockchain can impact your health data through the application of a “healthcare wallet” that’s owned by the patient, independent of the hospital’s electronic medical records. I love the idea that any hospital I go to has immediate access to all of the procedures ever done to me as a patient, independent of the healthcare provider I used in the past.
(For a deeper dive in the world of medical records, I recommend reading Atul Gawande’s seminal article in the New Yorker – this isn’t an easy problem to solve.)
The web3 alternative, however, immediately presents three distinct problems.
- Hospital Motivation:
Currently, hospitals have no desire to do this out of the goodness of their hearts – the incentives aren’t there. The US has resorted to simply forcing the hospitals to release this data: The 21st Century Cares Act. This legislation was finalized in 2020 and, among many other innovations in data accessibility, it requires hospitals to enable API access of your healthcare data to the app of your choice.
Hospitals now face fines for not being compliant. Whether the legislation is successful or not, let’s assume that the hospitals are forced to release this data (that’s a BIG assumption) for now.
2. Gas Fees:
Every technology has limitations, and one of the biggest ones with web3 is cost.
Capturing data on the blockchain is expensive, and health records get updated millions of times a day. If any change in your medical record needs to get “minted” every time, this EMR would cost a LOT more than the billions hospitals pay Epic every year.
There are current solutions like Polygon, Solana, Ethereum Proof-of-Stake that aim to impact this. Again, let’s assume that via roll ups or side chains, over the long-term the issue of cost gets resolved.
3. Transparency:
One of the biggest features of blockchain is that every transaction, every change in the database can be seen by everyone. I don’t know if there are lots of folks who’d enthusiastically share their entire medical history with the world. Also HIPAA exists.
While private blockchains exist as a potential solution to transparency, they are expensive to set up. They also limit the potential for innovation, collaboration, and especially composability which will put that particular system/chain/app behind in reach and impact.
I’m overlooking much more simpler problems like forgetting your keys to your wallet. This isn’t far fetched, approximately 20% of all bitcoins in existence is estimated to be lost forever as a result of dead wallets.
The first issue on hospital motivation can be solved by legislation. The last two are clearly technical problems. There are some interesting solutions and I’m much more of a believer now, after learning about Tamarin’s tech.
Kat and her team aim to solve both the cost and transparency problems of existing web3 infrastructure with their Nectar Protocol. Nectar uses an approach called Zero-Knowledge Rollups and HIPAA compliant decentralized storage. You can read more about zero-knowledge rollups here, but in short, it allows for records to get updated in “batches”, while using fancy math to keep all of the data encrypted. This has been applied to a handful of web3 projects in the past such as ZCash and IronFish. Both of them are using this technology to have the best of both worlds with blockchain. (If you want a deeper dive, Radiolab has an epic episode on The Ceremony that documents the birth of Zcash.)
Patients owning their own data has been a dream for a long time, with initiatives like eHealthExchange and the Sequoia Project. But web3 applications like Tamarin’s Shyro, built on the Nectar Protocol, take data ownership to another level and – for the first time – unlocks data in a globally accessible way. The eHealthExchange and Sequoia projects still have accessibility issues, meaning: these companies are sitting on billions of data points, and all that data remain inaccessible to the health community outside of the patient’s treating clinician.
With Shyro you can “stake” your data in an anonymous fashion and earn tokens as it is monetized by Tamarin. There are tons of use cases for monetization. For instance, your data can inform a health system where their next Physical Therapy location should be. Alternatively, pharmaceutical companies can access better, more inclusive data for faster, cheaper and demographically diverse clinical trials. Today, this data is being traded without the patients seeing a penny from them. Web3 enables this in a manner that is patient-friendly.
Data returning to patients simply makes healthcare more competitive. Typically, when consumer choice is introduced to new markets, quality goes up and costs come down. This is an exciting new avenue in healthcare. I’m rooting for Kat and her success!
Follow me and MATH on Twitter for more musings on startups, healthcare, and web3.
Sources and gratitude:
You should subscribe to Nikhil Krishnan’s awesome newsletter, Out-Of-Pocket Health. He’s one of the smartest people I read in healthcare, and has written about this extensively in the past. His latest post on this is particularly awesome.
Follow Dave Chase on Twitter. If you work in health tech, you’ve heard of Dave. He’s written a few books on healthcare reform, and is one of the best deep thinkers in this space. You may find Dave’s take on how the “dumb contracts” of the status quo healthcare system need to be replaced by Web3 smart contracts.
Kat Kuzmeskas is the closest to a superhero in healthcare. After working at Yale-New Haven, she dedicated herself to Tamarin Health. Subscribe to her blog here.
