Last month the Insurance Journal reported that the Workers’ Compensation Insurance Rating Bureau in California is looking into using blockchain technology as a better, safer, way to get the workers’ comp carriers and agents and brokers access to the massive amount of data the WCIRB collects. And this may just be the start of blockchain implementation in insurance claims processing.
Insurance experts expect blockchain will touch a number of areas: underwriting, customer on-boarding, travel and life insurance, personal accident insurance, surety insurance, peer-to-peer insurance and claims processing. In healthcare, for example, a doctor could submit a claim to the insurer’s blockchain – this action starts a smart contract, which is programmed inside business rules, revises the claim and defines a total sum to be paid.
According to the Institute of Medicine, about 30 cents of every healthcare dollar is wasted on needless administrative fees, medical fraud, excessive paperwork and other waste. Blockchain may not be the elixir for age-old problems, but it has great potential to save billions by optimizing current workflow and business processes.
And now details are emerging from technology startups, and carriers who are developing insurance claim blockchain applications. And a handful of headlines from the past three months have made it clear that insurers are moving forward with novel technologies in mind.
Of note, a partnership of five healthcare organizations including insurers UnitedHealthcare and Humana, Optum, Quest Diagnostics, and MultiPlan announced plans to launch a blockchain pilot to help payers tackle mandated provider directories. The program will apply blockchain technology to improve the quality of data and reduce the administrative costs associated with insurers getting up-to-date healthcare provider demographic data.
The pilot will start in late spring through the summer with results expected this fall. “I think the alliance is one of the first, if not the first, national blockchain alliances for healthcare,” Mike Jacobs, a senior distinguished engineer at Optum, who has been working on the test program for two years, said.
It takes quite a lot of time and money for insurers to reach out to providers each 90-day cycle, Jacobs said. Sometimes it takes half-a-dozen times to reach a provider through calls, emails or even through faxed information.
Managed care organizations, health systems, physicians, diagnostic information service providers and other healthcare stakeholders typically maintain separate copies of healthcare provider data, which can result in time-intensive and expensive reconciliation processes when differences arise, Optum said.
An estimated $2.1 billion is spent annually across the healthcare system chasing and maintaining provider data.
The pilot will use blockchain technology for the five members of the alliance to share the curated information.
“So when one payer does the curation work, it could be potentially shared with the other payers,” he said. “This works for payers that have an overlapping provider population.”
Optum also seems to have been keeping an eye on other up-and-coming technologies, namely AI and neural networks. In a sold-out discussion hosted at Optum’s Boston office and organized by the Design Museum Foundation, Sanji Fernando, vice president and head of OptumLabs’ Center for Applied Data Science, explained at length how ongoing difficulties researchers face in explaining the decision-making process of these networks is limiting their role in healthcare.