Data transparency, accuracy and currency have long been major challenges in the negotiation of value-based contracts. The long lag times between the delivery of a healthcare service or procedures and the processing of claims made it extremely difficult for providers and payers to access the same data at the same time.

Blockchain and distributed ledger technology promises to bridge this gap and provide near real-time access to the latest data that impacts value-based care contracts. As such, it would enable “the close collaboration of payers and provider [which] is a fundamental requirement for value-based care,” according to this article, which highlights a number of use cases where blockchain could apply.

For instance the state of Illinois is piloting a blockchain program to streamline the physician credentialing process. There are other applications for blockchain and distributed ledger technologies in the realms of population health, public health surveillance and the pharmaceutical supply chain and medication monitoring. “Blockchain could offer providers a way to reduce waste and fraud as they order consumable supplies, including high-value medications and addictive opioids.” The life sciences sector expects to deploy blockchain in this way in the very near future, according to one survey.

Currently, “many entities struggle to break down their data siloes and exchange information in a secure and timely manner.” Blockchain can help eliminate those silos, and provide “more secure and trusted strategies for managing big data,” which are appealing to many healthcare organizations.

Looking at value-based care specifically, “In order to provide services that fall in line with value-based care, one has to be able to access that comprehensive, trusted view of the patient,” says Shahram Ebadollahi, Vice President for Innovations and Chief Science Officer at IBM Watson Health.

Because different organizations have their own health data repositories and electronic health records, blockchain should be focused on more effective exchange of data. It’s not meant to replace existing systems, but rather serve as a connection point for existing data repositories to “increase the fluidity of data between different institutions” and “the movement of data … with the desires of the patient in mind.”

Administrative tasks such as claims processing and underwriting may also benefit from a blockchain approach, since managed permissions make it easier for payers to assess the validity of a claim, manage pre-authorizations, and ensure that providers are meeting the criteria laid out in their value-based contracts.

So-called “smart contracts” can automate many of these steps, which greatly increase the efficiency and decrease the amount of human oversight and administration to support risk-based contracts. A better patient experience would follow for those providers and health systems that could reduce the friction and hassle of dealing with insurance companies or other payers.

“Instant and validated acquisition of patient-generated health data and information from all of an individual’s providers could help payers create tailored incentive programs, conduct more proactive outreach, and issue reminders that aid in chronic disease management.”

Data sharing has always been a challenge in value-based care contracts between payers and providers. Blockchain technology creates trust through complete data transparency. With increased accuracy and timeliness of data, all stakeholders can have increased confidence in the quality of the data being exchanged. This will lead to faster adoption of value-based contracting and, ultimately, to more engaged partners and better quality and financial outcomes.