Wayne Boulais, Tensility Venture Partners
Armando Pauker, Tensility Venture Partners
Nicholas Shapiro, UPMC Enterprises
Vicky Wang, Kellogg School of Management, Northwestern University
There are categories of healthcare problems that are well-suited for Web3 infrastructure solutions. Existing healthcare institutions are limited by practices and regulations that do not incentivize data sharing across participants. Key issues in healthcare data today include the lack of a full longitudinal data set for a given patient and the struggle by patients to control their own data. With Web3, we can rethink how the participants in the ecosystem can be incentivized and energized to find new ways to share data to improve the healthcare system. Web3 concepts suggest new approaches to addressing the issues of trust, alignment, and transparency.
The Decentralized Autonomous Organization (DAO) is a flexible organizational structure that could be the first way that Web3 ideas begin to impact healthcare. The Web3 smart contract and the blockchain provide the means for incentivizing data sharing in many forms across the healthcare landscape, which consists of patients, physicians, healthcare providers, payers, pharmaceutical companies, and medical research institutions.
The graphic below is a general model of a healthcare DAO. At the highest layer, the founding team determines their mission and strategy. The founding team, in discussion with other participants, determines how data is going to be shared (with some defined opt-in procedure to meet privacy regulations), the incentives for sharing the data, the group governance structure, and how the treasury will be managed. The last layer encompasses the potential constituents of the DAO. Every DAO will have a different set of constituents based on the mission.
Examples of existing and potential healthcare DAOs include:
Of course, there will be distributed healthcare communities that do not use the DAO structure. For example, Hashed Health has started a company, ProCredEx, that “allows members to sell or share verifications they’ve created and purchase verifications they need. ProCredEx’s validation engine and distributed ledger technology securely presents immutable credentials data.” The benefits to the health system are participating in a federated sharing of credentials across all its employees - not just the physicians - to lower the cost for all providers.
Importantly, not all healthcare problems are best addressed by Web3 infrastructure. Careful consideration must be given to matching the appropriate enabling technology with the proposed solution. Deploying Web3 infrastructure for the sake of describing a company as forward-looking will simply add cost and friction to stakeholder adoption. Several examples listed above demonstrate areas where the information sharing that does take place is controlled by centralized clearing houses with significant market capture. Web3 infrastructure, when directed effectively, can erode the control of middlemen that extract meaningful value from stakeholders while providing limited improvement - which leads to a lack of trust and limited sharing. Healthcare innovation using Web3 infrastructure will ultimately succeed in use cases where data creators and owners are empowered and the whole is materially more valuable than the sum of the parts.
*UPMC Enterprises, a division of health system UPMC, owns a financial stake in Hashed Health.