Data aggregation and analytics company ODH Inc. and distributed healthcare ledger provider Hashed Health announced today that they have teamed up to develop blockchain technology designed to improve patient care and billing.

Hashed Health is a distributed ledger blockchain developer working in the healthcare industry to lead a consortium of like-minded healthcare companies to bring blockchain technology to the U.S. healthcare system. Last year, the group raised $1.8 million in a seed round.

Blockchain technology works by securing a distributed database of transactions between partners using cryptography and a consensus algorithm to make a tamper-proof ledger. Encryption secures data so third parties cannot break in easily and steal sensitive patient information, but at the same time the ledger can be built transparent enough for auditors to make sure legal regulations are being followed.

“Blockchain technologies hold a great deal of promise for managing and securing patient data, enabling greater payments efficiency and bringing together disconnected parties across the healthcare ecosystem,” said ODH Chief Executive Michael Jarjour.

Joining the consortium, ODH plans to spearhead the Value-Based Working Group at Hashed Health. The group aims to provide a collective effort toward accelerating the healthcare industry’s adoption of blockchain technology as a way to improve efficiency and quality through payer and provider collaboration.

The company’s name ODH stands for “Outcomes-Driven Health,” and it began as a startup aimed at aggregating and analyzing healthcare data across a large number of healthcare-related metrics including behavioral health, physical health and pharmacy data. In 2016, ODH teamed up with IBM Corp. to use IBM’s Watson system to predict behavioral health outcomes using an artificial intelligence-driven population health management platform.

The blockchain being developed by Hashed Health will include a lot of transactional data between member organizations. As an analyst looking at that information, ODH would have a bird’s-eye view of the marketplace and network among those organizations as patients move between them, thus would also be able to provide predictions and opportunities.

“As a company dedicated to combining data, analytics and insights to enable integrated patient care, ODH adds depth to our community,” said Hashed Health Chief Executive John Bass. “ODH’s focus on addressing behavioral and physical health comorbidities [the simultaneous presence of two chronic diseases or conditions in a patient] brings a unique perspective to our initiatives.”

UK financial analyst firm Deloitte Touche Tohmatsu Ltd. commented in a report that blockchain technology is already creating new models for health information exchange in the healthcare industry. The blockchain industry itself is in its nascent stages and standards, adoption and integration still have a long way to go.

“Blockchain technology presents numerous opportunities for health care; however, it is not fully mature today nor a panacea that can be immediately applied,” Deloitte noted in its analysis. “Several technical, organizational, and behavioral economics challenges must be addressed before a health care blockchain can be adopted by organizations nationwide.”

Hashed Health and ODH have their work set out for them, according to Deloitte’s industry analysis. Where blockchain may be useful for reducing complexity and enabling secure collaboration between organizations, but the report also noted that technical challenges still persist.

Those challenges included scalability, the lack of data standardization across the healthcare industry, operating costs and keeping up with and maintain regulatory concerns such as the Health Insurance Portability and Accountability Act Privacy Rule, or HIPAA. Even though many of these problems have potential solutions in blockchain technology implementations, it will take some care and research to get the right fit for the industry.

By joining the consortium, ODH will also be collaborating with Hashed Health’s current partners including Accenture PLC, Altarum Institute, Change Healthcare and others that represent many different segments of the broad healthcare market.

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