Alright, so our next speaker is CEO and founder of Hashed Health, a healthcare tech
innovation company focused on accelerating realization of blockchain and distributed
ledger tech. With 20 years of healthcare tech experiences spanning across many successful
startups, he is also a proud native of Nashville as well as a Tar Heel. So without further ado,
let me introduce John Bass. Hey, how's that sound? Can everybody hear me? Cool. This is
great. Thank you for being here. Thank you for coming. I'm going to move pretty fast. Don't
worry, I'm not going to do a blockchain 101. I assume if you're here you know what blockchain
is and how it works. I am a member of the community of co-founders of the blockchain. I am
going to talk a little bit about healthcare and why blockchain is important and how we hope that
it can empower consumers and become a tool for us to change the system. You know, everyone
complains about the healthcare system, and it's certainly a topic of conversation right now, but
it actually is working as designed. I don't know how many of you have read Homo Deus, a great book
if you haven't read it. Yuval Harari talks about it pretty well in there, basically says that,
you know, for the first time in history, more people are dying of overeating, kind of eating
too much than too little, and more people are dying from old age than from infectious disease.
We've really been successful at creating a system that keeps people alive, that fixes acute care
illnesses.
We are really good at that, and we've built up these massive insurance companies and pharma
companies and a lot of different middlemen in between, EMR companies that have done very well
because of that system, and it's been successful in a lot of ways, but the problem is that it
seems to be going a little bit backwards in terms of quality. We rank number one in cost,
but number 37 in terms of quality.
And it is eating away all of our GDP. Right now we're looking at about 18, close to, climbing close to 20% of GDP, and by 2020, the estimate is that it will be around $5 trillion in health care costs.
It's basically eating our government. Over time, there will be little room for much else other than health care.
And the waste.
The waste is pretty substantial.
The estimate is that 25% of those costs are administrative waste.
About a third of that $5 trillion is waste.
It comes in a lot of different forms.
According to the NIH services, basically needless services are the biggest piece at $210 billion per year.
Administrative costs is at $190 billion.
Inefficiency is at $210 billion.
Pricing transparency, fraud, and the failure to prevent diseases continue in terms of kind of making up that 25%.
The leading killers in our country are heart disease, cancer, and medical errors.
Medical errors are the third largest contributor to death, mortality, morbidity in the country, according to CDC last year.
Medical errors kill more people than respiratory disease.
And one of the kind of central themes here is that our fee-for-service health care system actually rewards those errors.
You know, if you treat someone and you fail to treat them correctly in the fee-for-service structure, you actually get paid to treat them again.
And you keep getting paid despite your success.
We're working to change that.
But we're still built on top of fee-for-service infrastructure and fee-for-service relational databases and systems that are a fundamental challenge to us digging our way out of the hole that we're in.
Fee-for-service creates these perverse incentives.
And the relational databases create siloed data structures that prohibit us from really moving the ball forward in terms of interoperability.
And at the same time, most of the people who really need help are, for example, mental health patients, one in five Americans.
And the really bad ones aren't in the institutions where they should be, but they're in jail, or they're on the streets, or they're in the morgue.
And we're realizing that, you know, while we've gotten really good at treating acute care illnesses,
we're really not so good at being, kind of, treating those leading causes of death, like cancer and heart disease and respiratory failure.
Because we seem to have, over time, institutionalized some of those illnesses.
Health is not about, it's about more than the absence or lack thereof of disease.
It's about your environment, and it's about what's going on around you.
It's about things like how close to mass transit you are, do you live in a food desert, and are you generally happy with your situation.
An interesting study on rats found that rats will choose opioids over food when they're caged,
but they'll choose food over opiates when they're not caged.
A lot of your health has to do, and your tendencies towards escape has to do with your situation in life.
And we know this, yet we continue to market opiates and other things that are destructive to health, because it feeds that system that we've created.
Another interesting point is that brain studies have shown that sugar is as addictive as cocaine.
And sugar is, you know, the leading cause of a lot of these problems that I'm talking about.
Cancer, for example, feeds off of sugar.
And the last kind of depressing statistic that I will kind of talk about is the, you know, as we start to look at how we're going to change the system,
we have to recognize that the, you can't read that, but that's the health and pharma lobby on the left.
And in terms of contributions to government,
government lobbying, financial contributions far outweighs other types of lobbying.
So it's really hard to change the system under these circumstances.
So, despite successes, and there have been many,
we're really good at knee replacements and hip replacements and fixing trauma and keeping people alive
and treating people when they have certain types of cancers and heart disease and things.
My grandfather turned 107 years old a couple weeks ago.
So there's a lot of good that we can do for people and there's reasons to do that.
But we can't afford it and it's starting to become weak in terms of its ability to deliver quality to the patients who need that care.
And we are clearly headed for a crisis in terms of how much it all costs.
We have a system that worked well for a while and has become a big ugly baby that we need to now take care of.
So we're at 20% of GDP and we're starting to go backwards.
How do we fix it?
Well certainly there's a lot of noise coming out of Washington on how to do that.
But we really seem to be struggling with it.
I am not making any kind of political statement here.
Obama's tried.
The new administration is finding that things are a little more complicated than they had realized, maybe.
And we all seem to be headed towards, both sides of the aisle seem to be pointing towards a single payer system where government runs our health care.
So what do we need to do?
What I believe is that we've got two paths.
One is to do that and the other is to change the conversation.
And empower the patient.
Empower the consumer.
And unfortunately in our country it seems like crises are what's necessary for us to really start to change behavior and open a new door.
But I think now is the time that we can do that.
And certainly there's a lot that would be required.
But I believe that one of the fundamental things is how do we start to reinvent the wheel.
And that's the vision of foundational architecture for the value chains that exist in health care.
And the consumer's roles and responsibilities.
The consumer's position in their own care and in the care of their communities.
So I'm going to talk about how blockchain can help.
And when I say blockchain, I'm not sure how many blockchain philosophers we have in the audience.
But for right or wrong, blockchain has become a term that encompasses what I consider a spectrum.
A spectrum of trust-based transactional systems.
There are public and private blockchains.
There's a lot of different protocols that have been advanced to solve specific issues in blockchain world.
And I'm going to, for the purposes of this conversation, lump that all underneath the word blockchain.
As many people do today.
Blockchain, you know, like bitcoin, it provided a new conversation.
In terms of moving a currency around.
We need a new conversation in terms of moving data and moving health-related data assets.
Between companies and between companies and individuals.
And the guys who were before me gave you one interesting use case of that.
If anyone was here to see it.
Trust is a big problem in health care.
And the concept of moving trust from intermediaries.
And centralized third parties to the protocol.
Is a fundamentally exciting and interesting concept that we are pursuing.
In addition, the idea of taking what's currently building applications across the value chain on top of existing relational databases.
And using the blockchain as a market level data structure.
Upon which we can build new types of applications.
Is a really exciting concept.
And it's a new way to innovate in terms of health care delivery.
A few of the use cases that we're working on at Hashed Health.
Identity and identity related use cases.
In our world, there are two different kind of versions of identity that we're working on.
One is patient identity.
And we've got some relationships with hospitals around the country.
Where we're starting to look at first putting a core identity.
And then building out extensions of that core identity.
To look at the patient's profile.
Health related profile for health care relationships.
And health care transactions.
Same thing is true on the provider side.
We're looking at core identity and these extensions.
That are things that currently need to be maintained.
In order for physicians to transact business.
In terms of today's structure.
Health plans have to maintain about 15 different data fields on every physician.
That is part of their system.
That information has to be correct.
In order for that physician to treat a patient.
Or get paid for that treatment.
In order for a claim to be processed correctly.
So that's something that is really a problem now.
And in the future.
Core identity plus these attributes.
Plus things like patient reported outcomes measures.
And quality scores will be important.
Physician identity related concepts.
As we look to create future blockchain based marketplaces.
So those are a few examples of identity related projects that we're working on.
And related to that is also on the IOT side.
And on quantified self.
If you think about it.
Quantified self is kind of an extension of your patient identity.
Right?
It's a health related extension of you as a person.
And the information that needs to be understood.
In real and virtual marketplaces.
Going forward.
In order for us to know how to price treatment.
And things like that.
Quantified communities.
At Hashed Health.
We talk a lot about not only the individual.
But the community in which that person exists.
So allowing patients to form groups.
And then look at attributes of the group.
And allow them to connect to provider and provider groups in new ways.
New and innovative ways of aggregating.
And self sovereign medical records.
The idea for you as a patient to have your mobile device.
That has your information on it.
And opening and closing the door to that data.
Much like you would a bitcoin wallet.
Is an exciting concept.
Rather than having as you move through an episode of care.
Each physician you talk to or see.
Opening and closing the door to their EMR platform for you.
That does not make sense.
It's not sustainable.
And doesn't scale.
And doesn't solve the problems we need to solve.
Today or in the future.
Broken value chains.
There's a million concepts here.
Pharmacy benefits management.
The pharma value chain.
The supply chain.
A lot of blockchain based solutions.
Are looking at track and trace.
And serialization solutions.
I think the larger opportunity in terms of pharma and supply chain.
Is unmasking the complicated.
And.
Obscure a way that we manage these value chains.
In terms of payments.
And contracting.
For a lot of different reasons over the years.
We've built these admin fees.
And rebate fees.
And these big intermediaries.
That sit between businesses.
So that now pharma companies.
Don't even know who takes their drugs.
Without buying that information from a middle man.
So the middle of these value chains.
Has gotten so bloated.
That no one on either side.
Knows what's happening anymore.
And so it's a great opportunity to create.
More peer to peer relationships.
Between the entities who really.
Need to understand that information.
And allow for.
Allow for.
Us to take that value.
That's currently being extracted.
And bring it and give it back to the patients.
The same thing.
Is true on the value chains.
For medical records.
And claims life cycle.
And a lot of different value chains in healthcare.
Those are just a few examples.
And then payments and currency.
You know currencies payments behavior.
And benefits.
The concept of programmable value.
Or programmable currencies in healthcare.
Is a very powerful concept.
The idea of linking.
Payment.
To benefits.
Is a concept that over time.
I think could revolutionize.
The insurance industry.
So when you talk about.
All of these different use cases.
That I just kind of blew through.
Identity diagnostics.
These different value chains.
Payments that's healthcare.
And.
It's a more peer to peer.
As you chip away at that.
It builds a more peer to peer.
Version of healthcare.
That puts the consumer at the center.
Of the way.
That also creates.
This feedback loop.
Kind of around a learning healthcare system.
The leading protocols.
You know.
We've done a lot of different projects now.
We've got a lot of different relationships.
That we've got with a lot of different healthcare.
Enterprise and consumer focused organizations.
In our experience.
The leading.
Protocols are hyper ledger.
Fabric.
And sawtooth lake.
This is.
Got some interesting healthcare.
Activities going on.
Obviously.
Anchoring to the bitcoin block chain.
Where you can use a public.
A block chain.
As something that you would strive to do.
Most use cases.
That we come across.
Use cases that people are asking for.
At least in the short term.
Our private permission block chains.
I hope this is a temporary.
Thing.
We all migrate towards.
Public open chains.
But due to some of the sensitivities.
In healthcare.
Especially depending on the use case.
Private permission chains.
Seem to be kind of the default.
We are starting to.
Look at etherment and tenderment.
Because of some of the things there.
And then we are.
Very interested in things like Tezos.
And EOS.
In terms of some of the newer.
Protocols that are coming along.
So we believe block chain is a good enabler.
For the reasons I mentioned before.
I think there is.
Lots of powerful things we can also do.
Around incentivizing.
Patient behavior.
A lot of that could involve.
Using a token.
And we are.
Looking at moving towards a world.
Where patients.
Are at the center of these collaborative networks.
That are designed to organize.
And empower people.
Who both are providing.
And consuming.
Health related services.
The idea of prosumers.
The idea of you as the consumer.
Using your data.
To create value for yourself.
Those are concepts.
That we are very excited about.
Creating new assets.
New types of currencies.
New types of health marketplaces.
Everything we do.
Is built off of mass collaboration.
And we hope that is the strategy of the future.
Certainly.
As we move forward.
To the blockchain space.
And we believe that over time.
It is going to be really interesting.
To watch healthcare companies.
Behave and think of themselves.
More like software companies.
And the same thing could be true.
For clinicians and researchers.
So now is the time that we can.
Because of the crisis.
Because of all this scary stuff.
That is going on.
We hope that now is the time.
To rethink this fundamental relationship.
That exists.
Not only in our country.
But around the world.
In terms of commerce.
And its relationship to healthcare.
I would be happy to stick around for a few minutes.
If you want to learn more.
You can reach out to me.
And thank you.
I think we have time for maybe one or two questions.
Cool.
Hi.
Thank you for your talk.
Yeah.
So there are ways that blockchain.
Could change the incentive structures.
As you described.
For example we could put a bounty on your future health.
And incentivize doctors.
To proactively make you healthier.
As strange as that would be.
But that would require.
A change of that level would probably require.
A long regulatory process.
So what do you see as the potential entry points.
For researchers.
Startups.
And probably most people in this room.
To start acting.
And changing the incentives now.
Without requiring a long government approval process.
Yeah.
So this was exactly.
The question I had for myself.
About a year and a half ago.
When I left HCA.
To start Hashed Health.
How do you create a company.
In the healthcare space.
You know with that in mind.
And so what I decided.
Was simple demonstrations of value.
In the B2B relationships.
Were a good place to start.
How do we.
Create new ways.
To manage things like provider directories.
For insurance companies.
And now granted.
That those types of use cases.
Are kind of nibbling around the edges.
Of existing systems.
But I think in the short term.
Those are important demonstrations of value.
To prove that the blockchain.
Is capable of solving real problems.
In this world.
As we build a foundation.
For these longer term.
More disruptive solutions.
So when you think about.
You know there are real problems in identity.
Both on the patient side.
And on the provider side.
That we can solve in the next year or two.
Using the blockchain.
There are real opportunities.
In things like reward systems.
For health behaviors.
I think that we can solve.
In a fairly short period of time.
That identity.
Payments.
Incentives.
Start to form the foundation.
For a marketplace.
That becomes more and more real.
Over the five to ten year horizon.
Thanks for your question.
Thank you very much.
Thank you.