Most people know blockchain as the transaction ledger associated with cryptocurrency transactions. However, evidence suggests a specific use for it that applies to health professionals — reducing medical fraud.
Blockchain’s Innate Characteristics May Cut Down on Fraud
Individuals think blockchain shows promise for minimizing fraud in medicine because of some of the features it offers. For example, many fraudulent practices in the health industry and elsewhere begin when people manipulate or destroy data. The blockchain, however, is immutable because it does not allow deleting or changing data.
Transaction records occur when people agree on the validity of data, and the content doesn’t get changed after the fact. Blockchain also allows detailed asset tracking, including where something came from and where it went after its origin point.
Moreover, blockchain has a distributed nature due to its peer-to-peer network. Because people share the duties of managing the blockchain and verifying its transactions, it becomes harder for people engaged in fraud to find and capitalize on weak points.
Tracking Single Doses of Medication
Health professionals continuously deal with the challenge of tracing medications from the manufacturers to the people who consume them. The difficulties come with costs totaling billions of dollars and pose substantial risks to patient health.
However, individuals can determine the progression of single doses with some blockchain-associated medication-tracing methods. That level of transparency could significantly increase the safety of people who consume the medicines, allowing for law enforcement to intervene before large-scale problems arise.
Statistics show a 19 percent increase in the number of pill presses seized by authorities since 2011. That data indicates they’re paying attention and trying to cut down on counterfeit medications, but blockchain could provide even more crucial assistance.
A company called FarmaTrust wants to bring together all the people involved in the pharmaceutical chain and give medications unique IDs as they move through the digital supply chain. It also plans to branch into the artificial intelligence realm, using machine learning to spot inefficiencies in suppliers and promote improvements.
Giving More Transparency to Medical Donors and Recipients
Researchers found that of the world’s total expenditures on health care, approximately $455 billion gets lost due to fraudulent practices. And, while that’s a lot of money, you might be surprised to learn that such fraud isn’t always carried out by particularly organized or malicious criminals.
“Those who commit fraud oftentimes do so recklessly,” says Reetuparna Dutta, Partner at Hodgson Russ, a healthcare fraud and whistleblowing law firm. “In other words, they don’t take seriously the requirements imposed on them for appropriate billing and allow bills to be submitted without taking steps to check and ensure their accuracy.”
“This sloppiness and disregard for the rules can lead to huge amounts of false claims being submitted to the government,” Dutta says. “For these individuals, while they know the rules, they don’t believe that they are important to follow or that any consequences will result from ignoring them.”
People who donate to medical-related campaigns are among those who lose out because they’re under the impression that their money gets spent on worthy things. In reality, some developing countries have weak supply chains that encourage fraudulent practices.
Statistics show that up to 30 percent of resources donated to help developing nations in need never reach their targets due to corruption. However, donors could take advantage of a blockchain-based system to find out how health organizations use their contributions.
That level of transparency could also work well for bodily donations, such as blood. In Nigeria, the SmartBag company uses blockchain technology to get details about blood donations before transfusions. Estimates suggest that unsafe transfusions cause up to 15 percent of new HIV infections in Sub-Saharan Africa.
The team behind the SmartBag technology says it can also work for controlled substances to reduce counterfeiting. They have even used USSD shortcodes that allow using the technology without smartphones or internet access.
Alice is a platform based on the Ethereum blockchain that brings more visibility to social funding projects. It allows organizations to see which initiatives work and which ones don’t while giving donors the information they need to contribute with confidence.
Reducing Medical Identity Fraud
People are well aware of how criminals can steal their details and engage in identity fraud attempts that can forever disrupt the lives of victims. However, they don’t always think about how that kind of identity theft extends to the health sector.
A Canadian company called SecureKey provides Blockchain-driven technology allowing people in the banking sector to verify user identities while letting customers choose the identifying information they share. The verification process could improve a statistic from the banking industry revealing that only 16 percent of the respondents polled reported the ability to spot fraud attempts in progress.
Turning back to the health sector, Trusted Key is an establishment working toward better identity management through blockchain. The lack of a centralized storage point and the need to go through multiple checkpoints before accessing data both decrease the likelihood of hackers grabbing valuable patient data and using it for fraudulent purposes.
Plus, it benefits clinicians by eliminating lengthy login process for dozens of applications per day and potentially helps patients take control of the content they share and how third-party companies use it.
Curbing Insurance Fraud Cases
Insurance fraud cases involving Medicare and Medicaid collectively cost billions of dollars annually. However, the individual instances aren’t always easily classifiable because they differ in the specifics. For example, some of the fraud relates to unnecessary care that causes waste. There are other cases associated with taking prescribed drugs illegally, including capitalizing on hastily scrawled prescriptions that are hard to read.
The use of blockchain in the insurance sector is still in its early stages. However, researchers believe it’ll soon be advantageous for enabling the multiple entities involved in patient care to share data among themselves and confirm its validity at every step of the process.
A Bright Future With Less Disruption Due to Fraud
Health-related fraud affects people at every level of the industry, whether they are the people receiving care or those giving it. Even though some of the possible solutions outlined here haven’t been widely used yet, they demonstrate why blockchain technology could turn into such a reliable tool for making medical fraud cases less abundant and costly.
Then, the health sector at large can devote more of its resources to giving care to the people who need it and spend less time defeating fraud attempts.
Kayla Matthews is a health IT and medtech writer whose work has appeared on VentureBeat, The Week, Contagion Live and BioMed Central. To read more posts by Kayla, follow her on Twitter or at ProductivityBytes.com.