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September 9, 2019

How Blockchain Will Fatten the Top Line of Labs and Pharmacies

by Beau Benson | Healthcare Technology, Revenue Cycle Management


Lots of industry pundits and armchair experts have weighed in with their analysis of how blockchain technology — and its impact on data integration and exchange, information security, and real-time accessibility of data — will transform care delivery.

But while much has been opined about the transformative effects that blockchain will usher in for hospitals and healthcare systems, little has been written about its potential applications for alternative site healthcare organizations like diagnostics labs, infusion providers and specialty pharmacies. This post will address some specific blockchain use cases for these markets.

But First Some Context

If you are already steeped in blockchain knowledge, feel free to skip directly to the use cases in the next section. If you’re not as well versed in blockchain, you may find the following background useful before you dive into the use cases. This blockchain infographic is a really good primer too.

One of the foundational aspects of blockchain is its ability to create a peer-to-peer network that eliminates intermediaries and, in the process, to significantly reduce latency and improve efficiency — two areas that plague healthcare.

With blockchain, transactions that might be traditionally performed by a middleman like a clearinghouse can now be performed by the networked computers, called “nodes.”

Records of accepted transactions are written sequentially to a decentralized ledger and rolled up into larger groups called blocks. Hence the name blockchain. Each organization is permissioned to access the ledger via smart contracts — essentially programmed business rules that automate access to the blockchain and utilization of the data— contained within its node.

The information within each block can not be changed once it’s recorded; a really appealing attribute for an industry like healthcare where security and compliance are so important.

All organizations connected to the ledger have immediate access to each subsequent block and may be permissioned to act on it depending on the rules written into their smart contracts. Additional transactions are written as a new block containing a hash — a unique and encrypted identification key — of the previous block and added to the end of the blockchain.

As healthcare entities connect with the blockchain via a secure API connection, they immediately have a trusted relationship with each organization on that blockchain. When a transaction is recorded and added to the blockchain, each permissioned organization has immediate visibility into that record. Smart contracts then allow different levels of access to that record.

To reiterate an earlier point, a key benefit to healthcare organizations is the inherent security that is baked into blockchain. Because each record contains the hash of the previous block, a block cannot be removed or changed without breaking the entire chain. And because there is no central database or governing intermediary, trust is created and maintained by each organization within the network.

Let’s look at a few examples of how the blockchain can be applied to alternative site healthcare organizations.

Specialty Pharmacy and Home Infusion

For specialty pharmacies and home infusion organizations, getting a business referral from a hospital or provider is often a matter of being the first to respond.

If a referring hospital and specialty pharmacy were connected as part of a blockchain network, then the referral would be recorded as a new block on the chain. As a node on the blockchain, the pharmacy would instantly be aware of the referral opportunity, and could autonomously review the referral and provide an immediate response.

Additional permissioned vendors could be nodes in this blockchain scenario, too. For instance, one could be a provider of eligibility and benefits verification services. This vendor would also have permissioned access to the record and could leverage their smart contracts to provide the pharmacy with information regarding the referral’s insurance eligibility, current benefits status, and could even initiate the prior authorization process.

Insurance plans, ACOs, and vendors providing services like care coordination, scheduling, claims management, and billing could all be part of the blockchain to provide a truly valuable experience for the referred patient and each participating organization.

Diagnostic and Genomic Laboratories

When it comes to obtaining accurate patient demographics, orders, insurance information, and clinical documentation, diagnostic and genomic laboratories are dependent on two primary sources: referring hospitals and providers, and electronic health records (EHRs).

If information is missing from the lab requisition or incorrectly coded, the resulting prior authorization will likely be denied until the information can be reconciled and sent to the lab. If this occurs, it sets off a cascade of phone calls, faxes, and emails seeking missing data elements and consuming hours, days, or weeks of time in the business offices of the lab and provider. And waiting on the outcome of this web of inefficient interaction is the patient.

genomicsIf the above scenario was replaced with one in which the stakeholders were connected on the blockchain, the process would be significantly improved.

If the lab was connected to the blockchain, along with the ordering provider, the lab would have immediate permissioned access to the information contained in the lab requisition.

Based on its smart contracts, the lab could screen the data in real-time and add a response in a new block with a request to the provider for more information.
When the data within the requisition is complete, a revenue cycle vendor could immediately read the block and update the blockchain with the insurance eligibility and patient responsibility information.

The RCM vendor could also submit the prior authorization request and receive a response before the lab runs the test or even receives the specimen.

The result would be that all eligibility and benefits could be verified at or before the point of service, and authorizations could be received for all tests before they are accessioned and resulted. The lengthy delays and lab holds that are common today would be eliminated. Claims denial volumes would plummet, reimbursement percentages would increase, and patients and providers would have better experiences.


Core blockchain benefits regarding integration, security, and data access hold the promise of solving some of healthcare’s most persistent problems, especially for alternative site healthcare organizations like diagnostics labs, infusion providers and specialty pharmacies. Myndshft is making use of these benefits to address revenue cycle inefficiencies today.

To learn how Myndshft is using blockchain technology and machine learning to improve the revenue cycle workflow referenced in the use cases above please click here or contact us for more information.