On The Necessity of Blockchain

"Do you really need blockchain for that?"

While the blockchain hype continues to sweep across essentially every industry vertical imaginable, we at PokitDok are not alone in asking this type of critical question.  For a few examples, see related commentary and questions from the folks over at Ripple, within the UK government, and at Forbes.  There are many different ways to answer these kinds of questions, but to illustrate a point, let's begin with some easy answers.

With the number of commercially available distributed databases, combined with either established or experimental Byzantine Fault-Tolerant (BFT) consensus algorithms, one easy answer is "no, we really don't need blockchain for this." Indeed, many of the use cases we are hearing from our customers and partners, from distributed medical records to more responsive payment systems, could be delivered with off the shelf technologies today.  However, these technologies have existed for a long time, and are not being broadly used (or, at least not effectively).  So there must be more to the story.

According to a recent HIMSS survey it is estimated that 35-40% of all healthcare data remain unencrypted, both at rest and in transit across digital channels, leading us to trivially conclude that the answer is "yes, we do definitely need blockchain!" Even if the only thing we achieve by bringing blockchain to the healthcare industry is strong cryptographic security by default, we will have accomplished something important, in terms of compliance if nothing else.

Necessity Versus Utility

Perhaps questions regarding the necessity of blockchain are not the most critical to be asking at this point in time, and in some sense may be missing a more important line of inquiry.  While it is always important to have specific use cases in mind, and to carefully consider the necessity of a new technology before launching headlong into multi-million dollar endeavors to deploy that tech into the wild, the reality is that blockchain is coming.  It is, in fact, happening now.  Given both the depth and breadth of the technical expertise across our team, further supported by some of the early members of the DokChain Alliance, we have decided instead to focus on the following question which we believe is more relevant:

"What are the potential implications of widespread blockchain adoption?"

To set expectations early, this question will not be answered here in this post, not even in healthcare.  Someone's almost certainly working on a book, which we are all anxiously awaiting. However, in an effort to begin the conversation, we must start with a brief description of what we mean when we say blockchain in the context of the DokChain implementation.  Specifically, our solution leverages the following functional aspects of blockchain that we believe are essential components of a modern healthcare IT infrastructure:

  • Reliable timestamps
  • Cryptographic security
  • Fully distributed replication
  • Publicly verifiable code governing all transactions
An example DokChain network, with multiple side chains and relevant participants identified in each: Researchers (Rs), Providers (Pr), Banks (Bk), Payers (Py), Employers (Em), and Consumers (Cn)

An example DokChain network, with multiple side chains and relevant participants identified as follows: Researchers (Rs), Providers (Pr), Banks (Bk), Payers (Py), Employers (Em), and Consumers (Cn)


Specifics of these components are discussed in detail elsewhere, but suffice it to say, the functionality provided by blockchain creates a system of record that is easily accessible to authenticated participants, provides specific guarantees around the validity of the information, and eliminates the need for a central authority to mediate transactions between entities across the network.

This functional perspective leads us to one very important reason we think blockchain is useful: it is much easier to say "blockchain" to our partners and customers than to say "encrypted, distributed, byzantine fault tolerant, intelligent transaction system whose value increases over time based on the fact that the ever-growing system of record has been agreed upon by multiple parties as a clearly defined version of the truth in the context of the assets in the network."  That is, once defined, the word blockchain becomes synonymous with the emergent properties of a system possessing the four key attributes listed above.  In a way similar to how "Hadoop" captured a complex set of distributed storage and computing principles into a consumable and easily deployable system, blockchain as a concept has significant value.

Beyond the Hype

Obviously, our interest in blockchain runs much deeper than as a sales and marketing tool. In terms of sufficiency, however, blockchain clearly provides enough to continue driving adoption of the technology on that basis alone.  That being said, let's briefly review an example use case, some of which we have running today, that more concretely illustrates the disruptive power of blockchain in healthcare.  We describe the functionality of our system as providing Simplified Computation for Medical Decision-making (SCMD), an example scenario of which is provided below.

Bob is a DokChain consumer ('patient') looking to get treated for recurring back pain he has been experiencing. He logs into the DokChain-powered patient access application provided by his health system, and verifies that he is covered for such a visit through the health insurance provided by his employer (all of which happens seamlessly via a smart contract running on the Benefits sidechain as illustrated above).  With a few swipes on his phone, Bob decides to share this coverage information, along with the recent attributes of his medical history, with Alice, an orthopedist he knows is in his network (all conducted via the Personal Health Record sidechain).  Alice's office, reviewing this information in real-time along with a propensity-to-pay score delivered through a finance sidechain, schedules an appointment with Bob at his earliest convenience.

While the bulk of this functionality is available today via the PokitDok suite of APIs, the future of these interactions via DokChain happens without intermediaries, without the latency of X12 5010 transactions, and with dramatically increased security, certainty of coverage, and easily sharable information around delivery and outcomes of medical care.  These increases in efficiency, and emergent benefits to participants of the network as a whole, are what drive our interest and development in DokChain.

The Next Phase

Our analysis, as tends to be the case when prompted by such in-depth inquiry, has raised several other interesting questions that we will continue to pursue as we move forward.  Among other topics, we will be exploring the following in future posts:

  • What are the implications, from a (behavioral) economics perspective, of an immutable record of "truth" for every piece of information we care about?
  • What does it mean for the value of this system of record to increase over time?
  • How do we capitalize on this value?
  • What will be the impact of a true, information-transparent market for healthcare consumer services?
  • What happens when we create a market for smart contracts?

About W Bryan Smith

Bryan is a research scientist with expertise in computational statistics and machine learning. As Chief Scientist at PokitDok, Bryan ensures that a scientific approach is applied across the business, from operations to analytics product development. He holds a PhD in Neuroscience from Caltech.

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1 comment

    • nick on November 14, 2016 at 11:32 am


    nice article. important question.

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