Viewpoint: Blockchain Technology Can Bring Trust, Speed and Efficiency to Medical Licensing and Credentialing

"Even though blockchain technology was initially designed for the financial cryptocurrency market, it is potentially an excellent vehicle for storing and accessing licensing and credentialing documents."

Blockchain is a technology which is emerging as a solution for medical licensing and credentialing (LC), as a way to collect and securely manage physician qualification data. Currently, there is no single source of truth for physician verification, credentialing, enrollment and privileging data. Because of this, the current process of licensing and credentialing (LC) of US physicians is highly inefficient. Each state licensing board independently requires applicants to send to them via authorized sources, confirmation of their medical school diplomas, other licenses, previous employment information, records of disciplinary action and more. The licensing process takes a number of months and is expensive. Credentialing is a separate process, usually done by employers and hospitals, to ensure healthcare providers have the proper qualifications to provide patient care and do their job. Credentialing involves verification of state licenses, drug enforcement agency (DEA) registration, board certification, education, on-going training, hospital affiliations and malpractice insurance. No matter how many hospitals or states a physician has worked in, or how many insurance plans a physician has been enrolled in, each hospital, employer, or insurance plan must independently verify all data. This verification process often takes between four to six months to complete. Redundant authentication causes long delays between when a physician accepts a position, and when they can start working. Many healthcare professionals work in multiple healthcare settings and are required to maintain credentials with each one.

To complete the credentialing process, institutions and professionals must choose to either dedicate in-house staff to contact licensing institutions and other agencies, hire a third party middleman, use credentials verification organization (CVO), or credentialing software. Cloud-based credentialing software has become a better option for many institutions. Unfortunately, cloud-based software still relies on unidirectional and redundant medical credentialing processes not to mention the security concerns that arise when information is stored in a direct access cloud.

The Blockchain Solution 

Even though blockchain technology was initially designed for the financial cryptocurrency market, it is potentially an excellent vehicle for storing and accessing LC documents. Blockchain is a secure, decentralized list of digital records linked together by cryptography and may be exactly what the healthcare industry needs.

Imagine a list of records linked to another list of records. That is basically what the term “blockchain” describes. Each “block” contains a cryptographic hash (mathematical algorithm, timestamp, and data) of the previous block. The cryptography protects information from attacks by malicious entities. Only those who are authorized to use the information can access it. The main benefits of blockchains are trustworthiness and efficiency. LC documents uploaded directly by central authorities (eg, medical schools, medical boards) can become accessible immediately, eliminating verbal, email or other expensive and time-consuming communications between central authorities (intermediaries).

In our LC example, once a physician has been awarded a diploma, passed boards, registered with the DEA, been licensed by a state, or any other LC-relevant event has occurred, the information can be entered into the physician’s private LC blockchain. When the physician needs a new state license, the medical board of that state could instantly access the LC blockchain. Smart contracts could be used to determine if, based on specific criteria, an LC request can be automatically approved or whether a manual document review is required. Once the applicant has a new license, it can be recorded in the LC blockchain. Various levels of access can be created to serve the needs of different stakeholders. For example, limited information such as the physician’s license number and standing with the board can be available to the public, while the board or medical group practice can have access to additional information, such as the physician’s home address and records regarding prior disciplinary action.

There are various barriers to implementation of blockchain LC. Blockchain in healthcare is ALL about removing the intermediary, increasing data security and eliminating bureaucracy and manual inefficiencies. Implementing Blockchains will create change but change is not easy. An LC blockchain would decrease the number of personnel involved in the current LC process. Building a blockchain will require funding and technical knowledge. It will eliminate much of the need for third party intermediaries such as CVOs. And finally, blockchain may decrease medical board revenues. 

Assuming that an LC blockchain does gain implementation, harmonization across LC stakeholders and, eventually, national and possibly international adoption across medical specialties may be possible.

What’s Next?

The next step will be for Montana to become a national blockchain leader. Innovators in the blockchain world want more regulatory clarity. Current uncertainty in blockchain regulation is an opportunity for Montana to become a magnet for the blockchain industry. Good leadership will attract more talent, funding and viable blockchain projects for the state. The Frontier Institute is leading the charge to position Montana as a leading blockchain state. 

First, Frontier is advocating the creation of a regulatory sandbox. Since most of the blockchain activities operate in a gray area with many outdated regulations built for the pre-crypto world, a regulatory sandbox would go a long way in supporting innovation. Within the sandbox, Montana can safely relax certain requirements allowing startups to experiment, test, and scale their blockchain projects. CLICK HERE TO SEE THE REGULATORY SANDBOX ONE PAGER

Second, Frontier is focusing on clarifying rules for developers and companies to build, invest, and participate in blockchain and other decentralized platforms of the future. For example, Wyoming and Tennessee created a framework to legally recognize decentralized organizations which will provide more certainty for startups. 

Blockchain technology holds great promise in improving the LC process. Just think about how blockchain could improve other areas in healthcare such as personal medical records. If Montana lawmakers embrace blockchain, I believe Montana can lead the way in healthcare innovation.

Healthcare Viewpoints is a monthly series featuring original columns from Montana healthcare leaders focused on addressing the challenges presented by our broken healthcare system. The opinions of guest authors do not necessarily represent the policy positions of the Frontier Institute.