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Blockchain has the potential to transform health and life insurance

Blockchain has the potential to be a game changer for health plans and life insurance alike, research by Deloitte’s Center for Health Solutions and Center for Financial Services has found.

The Centers drew on insights from academics, authors, blockchain leaders, and industry stakeholders, who brainstormed through an interactive crowdsourcing platform on how health and life insurers could apply this emerging technology in the next five to 10 years. The crowd came up with over 40 ideas to improve current standard operating procedures and systems for health plans and life insurance companies.

We sat down with two of our researchers, Christine Chang (CC) from the Center for Health Solutions and Sam Friedman (SF) from the Center for Financial Services, to get their thoughts on the findings and the future of blockchain.

Q: Which findings from the crowdsourcing research did you find most surprising?

CC: One of the most surprising findings from our paper is how many different ways blockchain might address new and old health care business problems. One example is contracts with providers. As health care moves to value-based care, health plans are writing more complex, value-based contracts. Settling payments based on these contracts can be a manual, time-intensive process. Blockchain’s smart contract functionality has the potential to automate these processes and give parties confidence that terms are executed accurately. Another example is providing accurate and up-to-date provider directories—with correct addresses, phone numbers, and confirming providers are in-network. Providers can use blockchain to note a change in networks or fix a mistake. Blockchain technology could automatically accept or reject the changes in accordance with smart contracts based on other information in the blockchain.

SF: What surprised me most was how one major potential use case dominated the discussion—that is, how blockchain might be repurposed to create a more comprehensive, secure, and interoperable repository of health information. Indeed, the other use cases we developed from the research often depended upon blockchain-facilitated data collection and policy execution. Creating a repository like this obviously would be very useful for both health and life insurance. If blockchain can help insurance companies upgrade their capabilities in this area, it could resonate throughout their value chain.

Q: What are the biggest challenges to health and life insurers investing further in blockchain technology?

CC: The biggest challenge for health plans may be the lack of agreed upon data standards, not necessarily the technology itself. For example, if multiple organizations post health data to a blockchain, users need a robust set of data standards. An abbreviation used at one hospital needs to have the same meaning to a physician at another hospital or a health plan administrator. The Fast Healthcare Interoperability Resources standards framework is one initiative making progress on data standards.

Another challenge is likely who will pay for and maintain a public blockchain.

SF: That’s a good point Christine. However, another, more fundamental obstacle is that many insurance executives simply don’t know much about blockchain—how it works, how it might be deployed in an insurance context, and why using blockchain might be an improvement over how they’re doing business now. Our research looks to shed light on what operational challenges blockchain might address; how it could possibly do the job better, cheaper, faster, and/or more securely; as well as the feasibility of realizing a blockchain solution.

Q: What are the biggest opportunities for blockchain in insurance moving forward?

CC: I’d say in its potential to solve one of the industry’s most vexing problems: sharing interoperable, comprehensive health records. Blockchain can provide a more secure environment to store and access data, thus relieving some of the concerns around sharing patient data. Furthermore, blockchain’s ability to establish trust between entities uniquely positions it for helping to solve the interoperability problem.

Another potentially big opportunity for blockchain is detecting fraud more effectively. When providers submit fraudulent information, blockchain’s smart contracts have the potential to determine whether the submission is valid. By pulling together and analyzing different data sources, blockchain also could reduce the time and resources for identifying fraud.

SF: Blockchain could be a catalyst in upgrading how companies access and use medical data and related information while bolstering data security. One way or the other, blockchain could eventually provide a big boost to the bottom line by helping streamline operations, cut costs, and lay the foundation for an entirely new type of interaction with consumers.


Author bio

Christine Chang is a research manager for the Deloitte Center for Health Solutions, Deloitte Services LP. She conducts primary and secondary research and analysis on emerging trends, challenges, and opportunities for stakeholders within the health care system. Her focus areas include health care information technology, innovation, and health care reform. Christine holds a MPH in Health Policy and Management from Columbia University Mailman School of Public Health and an BA in Ecology and Evolutionary Biology from Princeton University.



Sam Friedman, senior manager, Deloitte Services LP, is the insurance research leader at the Deloitte Center for Financial Services, where he analyzes the latest trends and identifies the major challenges confronting the property-casualty and life insurance industries. Sam joined Deloitte in October 2010 after 29 years at National Underwriter P&C, where he served as editor-in-chief.

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