In 2018, five major healthcare companies - Humana, MultiPlan, Optum, Quest Diagnostics, and UnitedHealthcare - formed the Synaptic Health Alliance (the "Alliance") to explore how blockchain technology could resolve current healthcare issues. The Alliance launched its first pilot program in April 2018 to focus on specific ways that "blockchain technology can help ensure the most current information about healthcare providers is available in the provider directories maintained by health insurers."1 Aetna and Ascension joined the Alliance in December 2018, thus adding additional resources and unique perspectives to the effort of streamlining provider data management.2
What is Blockchain?
As described in a March 1, 2018 article, "How Blockchain Can Impact Healthcare" authored by James Gatto, Esq. and posted on the Law of the Ledger: Legal Issues with Blockchain and Cryptocurrency Blog, a blockchain is, at its core, a distributed ledger for recording transaction data. In short, a blockchain can aptly be described as a simple list of transactions.
Traditional paper-based ledgers include consecutive pages in which each line records a transaction. When a ledger page is full, the process repeats on the next ledger page. In the case of a blockchain, each block is like a page. Transactions get verified and written into a block and when the block is full, a new block is created. Unlike traditional paper-based ledgers, when a block is full, the system creates a hash value, which is just a random number generated by an algorithm based on the contents of the block. This hash value is then written as the first entry in the new block, thereby "chaining" together the blocks, hence the term "blockchain." If someone ever attempts to change an entry in a prior block, the hash value would no longer match what was written into the new block and that attempt would be deemed invalid. In part, this is how blockchain creates unalterable records.
Current Challenges Surrounding Provider Data Management
Health plans are required to actively maintain and update their provider directories to meet both federal and state regulatory requirements. Provider directories include vital information for determining coverage for patients, including contact information for providers, information about plan participation for individual providers, and information regarding whether an individual provider is accepting new patients. Approximately $2.1 billion is spent annually by...