In this week’s episode we will investigate how blockchain is being deployed in the healthcare and the health insurance industry. Our guest is Ahmed Abdulla, CEO & Founder of Digipharm. Prior to founding Digipharm, Ahmed was a Global Health Economist at Rosche and Research Associate at the University of Liverpool. In addition to his present role as CEO, Ahmed is a Blockchain expert in healthcare for the United Nations Economic Commission for Europe.

Blockchain in two minutes

According to Ahmed, blockchain is a collection of records – referred to as ‘blocks.’ Through cryptographic hashes, a block is linked to the previous block. This creates an open and distributed ledger, which is cryptographically secure, timestamped and immutable.

 

Digipharm and value-based healthcare

Digipharm began as a project a year and a half ago with a goal of becoming an independent third-party platform to implement value based healthcare which is the notion of paying for healthcare on the basis of the performance of the treatment or drug.

Ahmed explains that there are two major factors that prevent patients from accessing the best healthcare facilities.

1. Cost

Speaking from experience, Ahmed highlights that pharmaceutical companies spend millions in R&D activities for new drug development. Once a patent for a drug has been obtained, the pharmaceutical company must undergo the process of securing FDA or EMA approval. Hence, there is a short period of time between receipt of approval and expiry of the patent i.e. the company must recover its expenses and generate profit in a relatively short period of time.

As a result, the prices of new drugs are usually quite high – customers are unable to handle the ever-increasing cost of medical treatment and parties (such as the Government, insurance companies etc) struggle to meet these rising costs.

 

2. Uncertain medical outcomes

Approval for new drugs or treatments are given based on evidence collected during clinical studies. Thus, there is uncertainty of the performance of such drugs and treatments – this creates the need for a mechanism where performance data is tracked, and outcomes data is used to pay for healthcare.

As described by Ahmed, there is a misalignment of incentives of various stakeholders within the health economy. Customers and other payers (Governments and insurance companies) wish to reduce the rising cost of medical treatment and counter the uncertainty of the outcomes of medical treatments, pharmaceutical companies are forced to charge high prices to recover their investments into R&D and regulators are unable to lower standards to maintain safety.

 

Implementation of value-based healthcare

Does such a model exist?

“Value-based Health Care is a mature concept. It is not something that Digipharm has developed. The issue lies within its implementation.”

When asked if such a model can be implemented, he explained that the ‘outcomes’ of a treatment or drug which form the basis for determining payments under a value-based healthcare system can be quantified. In this regard, he gave some examples –

* For cancer related treatments,