Questions raised by the first DSCSA blockchain pilot report

Blockchain and healthcare updates

MediLedger released their DSCSA pilot report

MediLedger is the first of the DSCSA pilots to release a report on their pilot. It contains a lot of information about the pilot, their solution approach, and discusses a few situations where the system was able to identify suspect product. If you’re in the space or just a wonk I’d encourage you to read the report, but I won’t review all of the details here.

One thing I was particularly interested in was the discussion of interoperability. Each DSCSA pilot is demonstrating interoperability within parties in a network, but not between competing networks. This raises a few important and unanswered questions:

  • What happens if two parties in a supply chain are a part of different blockchain networks?

  • Are the benefits of using a blockchain limited to only transactions within a network and not between networks?

  • How are differing network solutions dealt with? For example, one network could be putting all data on-chain while the other uses off-chain data and zero-knowledge proofs.

  • How can standards be developed to foster interoperability between systems?

To be clear this is an industry wide problem that isn’t specific to any one network. As the MediLedger report points out, the risk associated with this lack of interoperability is that blind spots are created that break the chain of custody. This risk grows as the number of interconnected systems grow. One potential solution MediLedger points to is “a well formed and FDA supported independent consortium to help the industry create aligned and effective standards of interoperability.”

Insurance service providers rely on blockchain to fast track claims payout amid coronavirus outbreak

Antifinancial’s “collective claims-sharing mechanism built on blockchain technology launched” a year ago and offers basic health plans to over 100 million participants. Some ~10,000 claims have been paid out using this service.

In a press release they stated that the entire evidence submission process used Alipay’s proprietary blockchain, which sounds like they are just hashing data submitted and submitting it to a blockchain to create an immutable record of that data. Not as cool as adjudicating claims with a smart contract or something like that, but cool to see blockchain tech used at scale nonetheless.

Blockchain saving the government $30m in its first application

Accelerate was the first blockchain project to get authority to operate in the federal government. In short, Accelerate uses a blockchain to streamline contracting and AI to provide insight into price discrepancies in government contracts. It was borne from Jose Arrieta’s efforts, who has since then taken a job as the HHS’ CIO. The HHS used Accelerate to drive $30m of savings over 5 years in the first contract it was being applied to. This is a hand remarkable return on investment for the government and one has to wonder how much money this would save if applied at scale across the government.

Molecule inks a partnership with Arctoris

Arctoris provides “experiments-as-a-service,” allowing others to outsource activities like sample storage and management, bioassays, and so forth. The idea is that a researcher could plug their experiments in online and let them “run” somewhere else in a fully automated way while they focus on higher value activities, like developing new research ideas, instead of manually carrying out their experiments themselves. Arctoris and Molecule “will combine their technologies to create a modular pipeline for distributed therapeutics development in the longevity space and adjacent fields.”

The most interesting thing about this is how users could leverage Molecule’s markets in tandem with Arctoris’ services. Molecule’s markets for drug IP let you speculate on a drug’s future, and the price theoretically rises and falls with the probability that drug is likely to be approved by regulatory bodies. If you are a smart researcher with some insight into a drug trading on Molecule you could speculate on that insight by buying/shorting the drug and ordering an experiment with Arctoris to produce the data to support your insight. Theoretically when the data is released markets will incorporate that information, the price should move accordingly, and you would make money if your insight was correct. That provides a way for more people to monetize their insights and could foster a more bottom-up and collaborative way of creating new therapeutics.

Change Healthcare on blockchain going into HIMSS

From the article:

Blockchain's best usefulness for healthcare is similar to AI, he said, "where where the capability shows up in the course of existing workflows to make them more streamlined, to make data sharing easier, to basically improve on an existing infrastructure."

Change Healthcare is one of the older players in the blockchain and healthcare space, so their approach is worth noting.

R3’s Blockchain and Healthcare Market Update

R3, the developer of the enterprise focused blockchain Corda, put out a brief market update. They highlight a few businesses building on Corda and make the following predictions for 2020:

  • New payment mechanisms such as value based contracting will highlight the need for more efficient patient data distribution and corresponding payment.

  • An increasing number of health systems will join existing consortia.

  • Focus on operational matters such as deployment flexibility.

  • A growing interest in interoperability between networks

I’d generally agree with most of these. In the next year I think interoperability will only be important for spaces where there are multiple networks to interoperate (e.g. supply chain!). Save a few notable exceptions most organizations are working on still finding value with blockchains and naturally aren’t ready to start leveraging multiple deployments.

What I’m reading this weekend

Federated learning: collaboration without compromise for health care research

Marielle Gross and I wrote a piece for STAT giving an introduction to and federated learning and why it’s important. From the conclusion:

Health care has struggled to find the correct balance between privacy and the desire to innovate. Inherent in this trade-off, and baked into the frameworks and policies governing health care and research, is the assumption that we need to share data to gain its benefits. Technologies like federated learning disprove this premise and challenge us to radically rethink the way we approach data creation, use, disclosure, and analysis. It promises to unlock the benefits of collaboration without unleashing its compromises.

JP Morgan reportedly in talks to merge blockchain unit Quorum with ConsenSys

ConsenSys (disclaimer: I’m an employee of ConsenSys Health) created and contributed the Ethereum client Besu to the Hyperledger Foundation. Similar to Quorum, Besu has a focus on privacy and enterprise use, and the two clients are the most used Ethereum clients for enterprises. I’m not privy to this transaction, and have no idea if this report is true or not, but there are probably synergies associated with these teams combining their efforts.

Fed chair Powell says Facebook's Libra 'really lit a fire' on the question of a digital dollar

This will come to no surprise to my long time readers as blockchain technology became geopolitically important last year. Moreover, just last week we saw a Governor at the Fed reveal their research efforts as well. I suspect this won’t be the last we’re hearing of the Fed’s activities this year.

On a related note the Libra Association is weighing a shift to a dollar backed stablecoin. This would be a predictable outcome and is a much more amenable arrangement for the US.

IOTA Foundation pauses network after hackers steal tokens

What’s the purpose of using a blockchain if one party can just pause the network?

Back to the Future

Peter Thiel makes a wide ranging argument about technological progress slowing down in this review of Ross Douthat’s up and coming book “The Decadent Society.” Coincidentally I came across this article on the progress in cancer treatment this week as well. Together they paint a sobering picture, but as Thiel writes the answer isn’t to despair:

It is a paradox of our time that the path to radical progress begins with moderation. Extreme optimism and fatalistic pessimism may seem to be stark opposites, but they both end in apathy. If things were sure to improve or bound to collapse, then our actions would not matter one way or the other.

Private equity’s growing role in healthcare

I was surprised to find that the number of private equity transactions in healthcare rose by 50% (1,588) last year compared to the year prior (1,059). What are long term effects of private equity’s influence growing in healthcare? Send me any resources if you know of any.

Utah sends employees to Mexico for lower prescription prices

IBM Blockchain VP: Every Dollar Spent on Blockchain Yields $15 on Cloud

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