John Bass, Hashed Health CEO
What a difference a year makes. That’s how John Bass, founder and CEO of Hashed Health, described the contrast between the blockchain for healthcare company’s experience at the HIMSS health IT conference earlier this month and 2017.
Bass recalls being the only blockchain business exhibiting at HIMSS one year ago and that few people understood what they were trying to do. One year later, it could not have been more different. Located in the Innovation Zone, Hashed Health attracted a steady stream of companies, including high profile businesses such as Geisinger Health System, CVS Health, and other large healthcare organizations.
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In the runup to MedCity INVEST in Chicago May 1-2, where Bass will be taking part in a panel discussion on the fundamentals of blockchain in healthcare, the Hashed Health CEO talked about his business and how he sees the blockchain market evolving.
This exchange has been lightly edited
Hashed Health seems to be made up of a few different businesses.
We launched Hashed Health in 2016. We are a products company but when we started, there was no market for blockchain solutions, so we had to create one. That was a daunting prospect. So we’ve put together a model at Hashed that has three distinct, synergistic areas that represent how we launch meaningful products in this unique space. First, Hashed Labs is our team of great blockchain healthcare product manager and engineering talent. They build product. They also work a lot on innovative business models and governance structures since those pieces are tightly intertwined with the technology side in blockchain. The second area, Hashed Enterprise, is all about helping healthcare organizations and other companies to better understand how blockchain could affect their businesses, the drivers of cost and value for blockchain in healthcare, and use cases appropriate for blockchain. Finally Hashed Collective is an open community-building forum for healthcare organizations, consumers, entrepreneurs, and developers to talk about blockchain applications for healthcare. These three areas work together to develop the market as we develop products and partnerships.
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Why does your business have so many parts to it?
Building meaningful innovations in blockchain is more complex than people realize. We are innovating with the technology as well as the business models and network governance structures at the same time. This three-dimensional aspect is what a lot of people don’t understand and that’s what makes things both challenging and rewarding. We realized at Hashed we needed to create a way to be very collaborative to work with a variety of companies. So we created a structure where we could do that. This approach is a differentiator for Hashed and it demands that we be very selective about the projects we prioritize. It’s important to understand that we are not a consulting company and we are not a development shop for other companies. We only engage in Labs projects when we have some sort of ongoing interest in the products or businesses we build.
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Can you tell me how you serve as a launchpad for startups?
You are referring to the fact that a few of the products we have built are now going to market as new entities. Each one looks different and we have a team member who specializes in constructing these relationships which really helps. One version is to create a joint venture between us and other organizations that are contributing to the go-to-market strategy. We have four projects emerging out of Hashed. Each has a large commercial opportunity.
One I can talk about is the Professional Credentials Exchange — a new entity focused purely on credentialing, which launched at HIMSS. In this case, we are using new technology (blockchain) and a new business model (an Exchange) to solve an old problem (credentialing). The digital assets being traded on the exchange are licensing physician credentialing artifacts. This is a fundamentally new approach to this problem that creates value for all the entities that currently struggle with licensure and credentialing today.
Let’s look at what happens right now. If you are a health system and are trying to onboard a new physician, there is a whole lot of work that’s required. You have to obtain primary-source verified data to answer questions such as — is the physician licensed in this state? Are they licensed to prescribe? Are there any malpractice cases against them in this state? Health systems have to do this many times at least every two years. Right now, this system is largely manual. In our model, we’re creating a shared operating system based on an exchange model. Data is offered on the exchange by those who have it, such as licensing boards, and consumed by those who need it, such as health systems. It is designed to replace a very manual process that currently costs a provider on average $7,500/day in lost revenue and the average time spent is four to six months.
We have landed on this model after spending 1.5 years looking into different variations of the technical and business options. We believe that early use cases that will prove the value of blockchain, like credentialing, will not necessarily change the world, but they will solve real problems for real companies over the next couple of years. I am very interested in being part of the moonshots, but we have to build our way through it.
With all the hype around blockchain, are we heading towards a bubble that will eventually burst?
It feels like the 1990s — we are headed to a bubble because of the hype and overloaded expectations of what blockchain can do in the near term. At some point, we will go through a valley of despair like we did with the dot-com bust. That is why we have structured this business the way we have… to be durable and sustainable.
How are you thinking about the growth strategy for companies developing blockchain for healthcare?
Think of it as building a highway. If you know where the on and off ramps are, you can build your business around those ramps. Another reason why we created this interesting corporate structure is to seize the moment in time –blockchain is not going away, these ICOs are not going away. At the end of the day our hope is that blockchain is going to affect you, the patient, in the future, hopefully in a good way.
It’s a dream come true… blockchain entrepreneurs have the ability to design their own economy for healthcare and specifically value-based care. That is an amazing gift to the world.
