This is part III in a series on web3. Make sure that you read part I and part II.
While a decentralized EMR certainly looks like the holy grail for web3 and healthcare, there are tons of micro innovations that can have an outsized impact. Below are interesting projects that span from supply chain to credentialing. (Insurance tech in itself deserves a long deep dive!)
Would love your thoughts on the viability of the ideas below! If you are building anything along these lines, I’m looking forward to meeting you.
A Decentralized Barcode for Pharmaceuticals:
Counterfeit drugs are a $200B/year problem across the world. There are many ways this problem occurs, but fraud in the shipping industry is a huge component. The industry relies on pen and paper records that are easily faked, especially for high-value cargo like pharmaceuticals.
Startups like Wave BL are working on a solution. Their goal is to create a blockchain-based electronic bill of lading. By using a decentralized approach, they are enabling the true authentication of trade documents that don’t rely on pen and paper.
This is realized by the equivalent of a “barcode” that’s minted as an NFT, that travels with the cargo. To accept the goods, the NFT has to be transferred from the manufacturer’s wallet to that of the recipient.
Shipping fraud is clearly bigger than just pharmaceuticals, but given the high-value of the cargo, this is a space that’s ripe for being an early adopter of web3.
DAOs for credentialing healthcare workers:
How do you know that your healthcare provider is qualified to take care of you? Enter the wonderful world of credentialing – every healthcare provider needs to complete certain requirements to take care of you. This goes way deeper than having a medical degree. There are annualized programs, specialized training, publishing research, and many more requirements that providers must fulfill to keep their license current.
The interesting thing about the process is that while it is the responsibility of the individual providers, it is the hospital that’s on the line for validating these credentials. This led to an entire industry with companies like Verisys or organizations like the Federal Credentials Verification Service that provide these services.
Imagine if each specialty had their own DAO, where members are providers in that specialty. They can receive training as participants, share best practices on the latest research, and get NFT badges as the validation of their ongoing credentialing. These badges can be shared with hospitals and practices to confirm that the provider is in good standing.
This makes the process transparent and easy to transfer from one organization to another. This makes sense as a patient too, I’d much rather pick my provider with a digital wallet of amazing training badges than a handful of diplomas hanging on their wall.
The closest example I’ve come across so far is the work of Dr. Leah Houston and evercred, which spun out of her original work with HPEC.io. They are still in their private beta, but it looks extremely promising.
Community Owned Health Plan (COHP): InsuranceDAO
A COHP is to traditional health insurance what a credit union is to a bank. This concept has existed for a long time and bringing in token incentives and a shared ownership can greatly impact the viability of these systems. Dave Chase, co-founder of Health Rosetta, which aims to accelerate the adoption of practical, non-partisan fixes to our healthcare system, devoted a few chapters to this in his latest book, Relocalizing Healthcare. (You can read the specific chapters from his book here and here.) He also tweets expansively about this space.
Insurance today is expensive, both over the short and long term. My favorite anecdote about this comes from David Goldhill when he wrote in Catastrophic Care. He states that an average salaried employee will contribute over $1.2M to the healthcare system over her lifetime! That’s not a typo. That was in 2013. Dave Chase has since updated the data to reach a whopping new number of $3.8M.
Web3 provides an alternative. Imagine a system based on smart contracts for paying bills and calculating monthly premium amounts based on utilization of services. This can exist in a transparent manner parallel to traditional insurance for a small number of treatments and build up from there.
I love the incentive structure here. Members are directly tied to the utilization of local healthcare services and pay accordingly. There are a handful of examples like Insurace and NexusMutual who are already working on this, and it will be super interesting to see where they go.
Dave Chase also closely examined this space and created an alternative model via his company Health Rosetta. Their model is outlined in this slide deck drawing from proven models in Alaska and Florida. They also draw on models from outside the U.S. such as Jonkoping, Sweden. Chase’s view is that Web3 tokenization is critical as many of the things that drive well-being in a community are uncompensated or under-compensated. They are often done by women and low-wage workers who provide vital services such as home care for disabled and aging people.
All in all, web3 offers tons of new opportunities to fix healthcare. I’m delighted to meet so many entrepreneurs working on this, and I’d love to hear your thoughts on some of the ideas listed above.
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.