Host of Payment Matters
On this episode of Payment Matters, host Jeff Lin interviews John Bass, founder and CEO of Hashed Health. Jeff and John talk about the concepts of blockchain and Web 3.0, and how these disruptive technologies can drive innovations in credentialing, transparency and data management in the healthcare industry. Listen to the episode or read the full transcript below.
Jeff Lin: Welcome to Payment Matters. I’m your host Jeff Lin. Thanks for tuning in today. On this show, we talk about the ever-changing landscape of healthcare payments and the impacts of healthcare payers, providers and consumers. You can follow the conversation on Twitter with #paymentmatters and follow me at @JeffBLin.
My guest for today’s episode is John Bass. John is the founder and CEO of Hashed Health, a venture studio driving innovation and collaboration in healthcare. John is an internationally recognized author and speaker on value-based care, blockchain and decentralized healthcare technology and is the co-author of the HIMSS published book, Blockchain in Healthcare Innovations That Empower Patients, Connect Professionals and Improve Care.
John, really glad to have you here today. Maybe for our audience here, could you give just a quick description about yourself and a little bit more about your company?
John Bass: Hey Jeff, thanks so much for having me on. This is great. I’m a fan of what you’re doing. I’ve got a background in healthcare startups dating back to the.com days and so if you look back at my career that kind of theme has been around, “how do we use technology to drive collaboration,” and “how do we work together to solve shared problems?” There’s no shortage of those in the healthcare space, and so it’s probably taking a lot of years off my life. But that theme of collaboration and healthcare has been kind of what I’ve focused on.
Hashed Health, as you mentioned, is a venture studio. That may be a new term for some of your listeners, but a venture studio is a company that creates new startups. We do that using a process of bringing resources, expertise and partnerships to the beginning of the discovery and delivery process, so by the time we spin out a new company, we do everything we can to prove that it has product-market fit. We prove we’ve got an engineering team who has built the product that’s been kind of born out of one of our ideas. Usually these ideas are coming out of our team.
We go out and recruit customers and so by the time we spin something out, not only do we have a product, we have customers for that product. We know our business model because we got validation from those customers that they will use the product and pay for it. We’ve gone out and recruited a co-founder or co-founding company. Sometimes it’s a group of companies who do a joint venture with us and we’ve got investors who are excited to help support the commercialization of that new organization.
So that is what a venture studio does, and that’s what our process that sits underneath the venture studio does. Our studio focuses specifically on these themes of collaboration in healthcare: “How can we use technology to bring together enterprises and communities around shared opportunities and shared problems?”
Specifically, we’re known at Hashed Health for our expertise in the use of blockchain and Web 3.0 technologies as enablers of new business models in healthcare.
So that’s a little bit more about me and what we do at Hashed Health.
Jeff: So there’s been a lot of talk about blockchain and what’s out there, especially, you know the talk about crypto. It may be helpful for us to paint some realities on this, but what do you think can be accomplished? Is it going to solve all ills in healthcare or are there specific segments or areas that can realistically be solved?
John: Well, you’re right. There is a lot of hype that comes in cycles. I think we’re probably about to enter a new cycle of that around crypto and blockchain and Web 3.0 and all these kind of terms people throw around.
It’s early, but obviously Hashed Health and a lot of other people are making big bets on the power of this technology to solve a lot of these big problems in healthcare. Healthcare is kind of a team sport, right? Treating patients and the supply chain, and you know, benefits and insurance and payments and all these things are not multi-party multi-system. So, we think the best way to solve these problems is through bringing together networks of organizations or communities who have shared incentives and want to use this concept of a distributed ledger or blockchain as a shared source of truth in a way to align the incentives and create trust and transparency amongst the organizations who are all solving a shared problem together. It’s a utility business model.
So these are really hard business models to commercialize. It takes time and it takes a group of enterprises that are all willing to work together to solve the problem. There’s a lot of change management and getting people to think in new ways. It makes me think of when we started the dot com company I mentioned, which was a B2B platform in 1999. The hard part back then was not really the technology. Rather, it was getting health systems and suppliers to work together in new ways. That change management and fear of losing control was the limiting factor in terms of the innovation we were doing back then. So it’s taking some time, and some people are frustrated. A lot of the friends and partners that we had in the early days of Hashed Health in 2016 and 2017 aren’t around anymore because they weren’t set up to evolve with the market and to have patient capital. This idea of collaboration and this idea of creating utilities and using technology to create trust and transparency and alignment across networks of people who care about solving the same problems, there’s no doubt that that is directionally correct. We’re starting to see real builders doing things and introducing new business models that are uniquely enabled by the use of this technology. That’s what’s different from previous cycles, and that’s why Hashed Health and others are investing more heavily in the commercialization of these new companies and these new business models.
There are some examples that you can point to of companies out there that are in production and solving problems. Professional Credentials Exchange, which is a portfolio company of ours, is doing something in credentialing and directory management, which is meaningful and real, and growing and increasing in value. There are organizations in the world that are doing a lot of work around supply chain transparency and security, data management, data pedigree and data security. These are some of the areas where there’s low hanging fruit and we’re seeing interesting new business models and mature technologies that are scaling.
Currently the aperture for use cases is narrow, but we’re seeing a lot of maturation and a lot of smart teams working on Web 3.0 right now. If you pay attention, you’ll notice that a lot of the smartest people in the United States and abroad are focused on Web 3.0. It’s just a matter of time before these Web 3.0 concepts, such as crypto and metaverse come to healthcare. You’re going to see a lot of new types of data markets and data exchanges, new types of multi-party business process automation, new types of programmable value transfer concepts coming to healthcare in the pharma and life sciences world and so that’s where we’re placing our bets. I think that’s where you’re going to see more people placing bets over the next few years.
Jeff: Do you mind giving a high-level summary for our audience? What’s Web 3.0 and how is that different or the same as it relates to blockchain?
John: The concept of blockchain started back in 2009 as a way to track and improve the ownership of a digital asset. In that case it was Bitcoin. Bitcoin is just a digital asset. It’s a digital asset that represents a cryptocurrency, and the blockchain is the system that allows you to mathematically guarantee who owns that digital asset. That’s kind of the big problem that the blockchains solve – proving who owns a digital asset.
Then came Ethereum in about 2014. That started to expand what the definition of a digital asset could be and started to introduce a development platform on top of a blockchain so you could start to program the movement of digital assets and you can start to broaden the definition of what a digital asset is beyond just cryptocurrency or Bitcoin. So, it was really Ethereum that unleashed this wave of innovation that again goes in cycles but has continued to increase in pace over the last several years.
The latest kind of wave of blockchain enthusiasm has come through the Web 3.0 movement. Web 3.0 is a roll up of a bunch of new business models that are born out of blockchain and distributed ledger technologies. These include things like nonfungible tokens which are currently associated with art, just like blockchain was originally associated with Bitcoin. It’s a file or a web page, or a JPEG that is owned by someone, but it’s digital, so you can visually prove ownership of a digital artifact. You can mathematically prove ownership of a digital artifact. That’s what’s interesting about NFC.
In Web 3.0 there is a concept of DAO – Decentralized Autonomous Organizations. So, Bitcoin is a DAO. There is no Bitcoin company. It is a decentralized network of a community of people who care about the movement of this digital asset, called Bitcoin. There’s a governance system, where the community governs what happens with the Bitcoin network. There’s a decentralized community of individuals or companies that all care about a common asset and share a common bank account. That’s an interesting concept around creating these communities of individuals or organizations who are aligned around solving a problem and share a common bank account. But there’s no centralized organization. It’s governed by the community itself.
So in in Web 3.0 there is also an emerging concept of the metaverse. In some ways we’re already living in the metaverse. Because of the COVID-19 pandemic, many of us went to work on zoom. In some people’s minds, it is a metaverse because you’re going to work virtually instead of going into an office.
Telemedicine is kind of a first step into the metaverse, so for people in healthcare who dismiss the metaverse as something that’s just for gamers or kind of far off into the future, we’re kind of already there in some ways. Coming out of the pandemic, we’re accelerating faster into the metaverse.
So, in the Metaverse, being able to prove ownership of certain assets and move money programmatically around certain rules that are governed by a central authority, but also perhaps governed by a community. These are really interesting concepts and real enablers for new business models in healthcare.
So hopefully that isn’t overly nerdy but helps people understand some history and some definitions around blockchain and Web 3.0.
Jeff: I want to double click on what you just said about communities and the networks that are being built. I think there are a lot of organizations that base the value of their company based off the data that they store. How do you overcome these disparate data silos with the objective of creating community and networks of sharing and transparency? There’s a broader common good here. How do you reconcile that between how a company needs to sustain itself and their financial perspective?
John: That’s such a good question. In terms of how fast this space moves again, in some ways it’s very similar to the introduction of the Internet back in the 90s. The internet is really good at moving data around, so the change management that had to go along with enterprise adoption of things like our company global healthcare exchange. That was moving orders between providers and suppliers in the early days and getting the network effects going on that company because there was a hesitancy to share data. There was an idea that people would lose leverage over their counterparties, but now that’s just the way business is done because it’s more efficient and effective, and resilient than paper and faxes and things like that. We’re at the beginning of a change. In order to solve a lot of the big problems in healthcare, we’ve got to start creating technologies that enable the sharing of information and incentivize the sharing of information and make sure that the true owners of that information are empowered and that those systems are improving the industry and not improving certain legacy members of the industry.
There are a lot of use cases where that’s simply not feasible yet, but there are certain use cases where there’s no real benefit to the peers like the endpoints in the network to sharing that information. One example is Professional Credentials Exchange. Right now there is a lot of redundant curation work that’s happening in the industry. Every hospital and every payer is spending a lot of time, sometimes four to six months, credentialing a physician. They’re losing lots of revenue during that process, and they have to do it every two years and then it’s all analog. So it makes a lot of sense from a lot of different perspectives to enable ways to mathematically prove the pedigree of that data, so you can prove that it’s coming from the primary source by using a distributed Ledger. In doing so you can enable a new business model which is a data market. People who are doing that curation work or spending the time to credential a physician or a practitioner, well, it’s very arguable that they should get rewarded for that curation because it takes a lot of time and effort to do an employment history or to do a malpractice investigation.
That’s one instance where it may make sense to have a data exchange or a data market where you can create value for an organization to come off a data resource that’s sitting idle in a data center.
A lot of these future marketplaces are incentivizing the sharing of curated information across a community of people who want that information, and they’re willing to pay for it because it’s a lot better to do that than to have your own teams doing that work for four to six months. The No Surprises Act for payers is another example. It’s similar directory management.
These are all examples where if we work together as a community, it makes a lot more sense than the way it’s being done today, which is every organization or every CFO for him or herself, and every organization does the same curation work on top of every other organization.
Again, supply chain is another example where it just makes sense to work as a community. There are no real, inherent competitive value that comes from doing it yourself. So we’re working really hard to find those early use cases and use them as a wedge for adoption. We feel like that builds an important bridge to the future.
Jeff: We could probably spend hours talking about this. I heard the word “evolve” a couple times here. There are glimmers of hope in terms of streamlining and reducing the costs, especially the administrative costs in health care. Do you think there’s an opportunity for a revolution by using blockchain and web 3.0 technology? Where do you see that happening or is that even a possibility?
John: That’s the dream. You know, in the early days of blockchain healthcare, all people wanted to talk about was medical records on the blockchain and crypto currencies in healthcare. What we need to be talking about are great and innovative ways to solve problems.
I think the dreamy opportunities that we love to think about and are still a little bit down the road is the introduction of consumer-focused solutions leveraging these characteristics of blockchains around ownership, programmable value transfer and self-sovereign data.
Things like how to empower individuals with their information and then allow them to open and close the door to that information as they move through their lives. Same thing for physicians and their medical professional identity and reputation. If you play these concepts out, they are very disruptive and have the potential to truly move the needle on the big problem in healthcare, which is cost. They could introduce more rational marketplaces, introduce more responsible, secure ways of dealing with sensitive data and really clean up a lot of the extractive business models that exist today. So, I think there is disruption coming and what we think about a lot is, how do we build bridges to these opportunities? It’s not about this intermediation. I do think that a lot of the value chains in healthcare could shift to be more efficient, transparent and rational in the future. I think that’s the key to really driving down a lot of the costs, both in terms of rational marketplaces and also administrative burden in the healthcare market today.
Jeff: John, this is such an interesting space, and I know it’s moving fast and you’re on the forefront of it. These are the Payment Matters we’re tackling today. Thank you to my guest John Bass for joining me. Where can our listeners go to learn more about you and your company?
John: Thank you so much for having me. I love the work that we’re doing and I love the vision and I appreciate you giving me a chance to talk about it. These are exciting concepts and I’m excited to share my view, which is one view of many.
You can find more information on our website, hashedhealth.com. I’m on Twitter at @JohnGBass and I’m on LinkedIn as well.
Jeff: Thank you once again for joining me today, and thank you to all of you for listening in. Remember that you can listen to this episode weekdays at 4:30 AM, 12:30 PM and 8:30 PM Eastern on HealthcareNowRadio.com. You can also listen to this on Apple Podcasts and Google Play Music, or just say, “Alexa, play HealthcareNow Radio.” If you have a comment about the episode or the show, follow #PaymentMatters or connect with me on Twitter @JeffBLin. Learn more about the show at healthcarenowradio.com or instamed.com.