Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Corey Todaro & John Bass: Hashed Health – Rebooting The Healthcare Industry

Episode Date: March 29, 2018

The healthcare industry is paradoxical. On the one hand, treatment technologies represent some of the most advanced science known to humankind, while some administrative tasks are still performed using paper and fax machine. Studies have shown that the administrative costs of healthcare can represent up to one-third of the total cost of care. Also, as diagnosis, treatment, and care, becomes increasingly data-driven and patient-specific, the industry needs to adopt more secure and robust technologies to manage patient data and communications between the patient and the different participants in the healthcare supply chain. We are joined by John Bass and Corey Todaro, who are respectively CEO and CPO of Hashed Health, an innovation firm focused on accelerating the meaningful development of blockchain and distributed ledger technologies for the industry. Hashed Health works to build solutions which leverage blockchain to solve some of the most important challenges facing this sector. Topics covered in this episode: John and Corey’s respective backgrounds in the building technology for the healthcare sector Nashville as a hub for the US healthcare industry What is Hashed Health and what problems the company is trying to solve The particular issues facing the US and global healthcare sectors How healthcare in the US differs from that of European countries The different entities of Hashed Health: Hashed Collective, Hashed Labs, and Hashed Enterprise Hashed Enterprise and the products they are building for the industry Episode links: Hashed Health Website Hashed Health Blog Hashed Health Podcast This episode is hosted by Sébastien Couture. Show notes and listening options: epicenter.tv/228

This is Epicenter, Episode 228, with guests John Bass and Corey Todaro. This episode of Epicenter is brought you by Gnosis, an open platform for businesses to create their own prediction market applications on top of the Ethereum network. They recently launched Gnosis X, a challenge inviting developers to build apps on top of the Gnosis platform. To learn more, go to epicenter.tv slash GnosisX. Hi, welcome to Epicenter, the show which talks about the technologies projects and startups driving decentralization and the global blockchain revolution. My name is the best in quichu. And today we have an episode where we're going to focus on healthcare. And who better to have on today than two people who are working very hard on solving some of the hardest problems in the healthcare industry, specifically the U.S. healthcare industry, which at least from my standpoint and from where I live, you know, has a lot of

of problems that it's looking to solve. I think we'll get into that during the episode. And so the differences between the U.S. and other countries when it comes to health care. But let's introduce our guest today, John Bass, who is the CEO of Hashed Health and Corey Tadero, who is the chief product officer and also running their labs initiative. And so Hashed Health is an innovation firm, a healthcare innovation firm that is focused on accelerating the use of blockchain and distributed ledger technologies in the healthcare industry. And they're located in Nashville, which is sort of a hub in the U.S. for healthcare and specifically hospital companies that are situated there. So, hi, guys. Thanks for coming on the show today.

Thanks for having us. Thanks for having us. Before we get started and before we dive into this topic, which is a very vast topic, as I've learned doing this research is let's first get a bit of background from each of you. So perhaps starting with John, please tell us a bit about yourself, how you got involved in this space and your background in healthcare industry. Sure. Yeah. So I've been in the healthcare industry, specifically healthcare technology for around 23 years. I've been fortunate to be a part of a few different healthcare technology startups that grew up. And starting back in the 90s, So I'm kind of a product of the dot-com days of the 90s, where we created a B-to-B platform,

one of the first kind of B-to-B platform, specifically here in supply chain, called Impacthealth.com. And looking back at that, you know, the tech was not that difficult. What was hard was getting people to collaborate, getting people like hospitals and their trading partners to sit at a table together. and work together in new ways using the internet. And so that process, we survived the dot-com crash, and we ended up being acquired by a company called Global Healthcare Exchange, which is still around today. After about 10 years or so with GHX,

I helped start another company called EnVIVOLink, which was a care management platform for orthopedic and spine episodes of care. Both, if you think about it, are kind of these concepts around shared operating systems and health care. So when you talk about shared operating systems, you're talking about fundamentally, you know, trust and transparency and interoperability, and studying clinical and financial performance across a value chain or an episode of care or a revenue cycle. And what you're doing is you're kind of trying to stitch together information from a bunch of siloed relational databases. So through those two startups, I did kind of my 10,000 hours trying to get people to collaborate using technology.

And so that's become kind of the theme of my career. And when we sold in Vivalink back in 15 to HCA, I really began to study blockchain in earnest. And I just kind of couldn't let it go. And so I started the Nashville blockchain meetup, which has grown a lot over the last few years, and eventually started hashed to create a firm that was purely focused on using blockchain to build products that solve unmet needs in the healthcare space. I fundamentally believe that we are approaching kind of a financial crisis here in the U.S. And I think that that feeling drives a lot of our work here at Hashed.

You know, over the last 20 years or so, I've watched these unmet needs that I was talking about cause us to accelerate towards this crisis where we've got currently $3.3 trillion being spent on health care, roughly 18% of GDP. It's about $10,000 per person here in the U.S. And by 2016, it's going to be $5.7 trillion. And at the same time, we have this really uneven kind of quality and access. So we're not getting our money's worth. So we feel like blockchain has the ability to help us fix some of these value chains

that are driving a lot of the cost and trust and transparency issues. So that's a little bit about me and hash. And I'll let Corey introduce himself as well. Well, I'm Corey Tadaro. I lead product design and hash labs within HASHTEL. My career in health care started a little over 10 years ago with a company called Vanguard Health Systems, which is an example of something unique in the United States, which is a corporate-run hospital company, a hospital corporation, if you will. We own and operated 26 hospitals in six states. We also ran to onus in two of those states. I worked in our strategy and innovation, right under our chief strategy innovation. officer. I had a foot row seat to the Affordable Care Act or Obamacare being passed. Also, I was involved in a lot of our efforts around fundamentally new payment models for health care, something called fee for, fee for value or outcomes-based payment, as opposed to the prevailing payment paradigm in health care, almost the world over, which is fee for service. A doctor does a procedure. They

get paid for that procedure. But instead, should we be paying physicians and health systems based upon the quality of what they're doing. Yes, you did a surgery, but was the surgery effective? Was it efficacious in relieving the overall condition? Was it thrifty? Or was it wildly spin-thrift in the sense of all kinds of measures that we can do? I'm a veteran of trying to make data systems inside hospital companies do things they were never designed to do. So our medical claims payment systems were never designed for value-based care. They were were designed to do the one thing they do really well now, which is get paid fee for service. And we tried to pull data from a variety of existing stacks inside our hospital company to get

it to give us the data that we would need to really build a foundation for a fundamentally new way of paying for health care. And I'm not ashamed to say, but we failed. It's a really hard battle to get those data systems and the paradigms, the way we think about how health care is paid for and delivered to change. So I've got the scars of change management as well. Following our acquisition by a larger hospital company in America, which seems to be a trend that's been going on to the last seven or eight years, I became a venture capitalist in the health IT space.

I spent about three years, about 15 investments at the seed and early stage, gave me a really good view into what the healthcare enterprises are ready to do in terms of technical innovation and disruption, and how they view new technology and what their appetite for that is largely. But it was in that role I started researching blockchain. Late 2015, early 2016. I met John Bass when the Nashville blockchain meetup was four of us in a bar. And when John said he had the idea for hashed health, I said, hey, I'm ready to quit my job today and get going on it.

Because once you climb that learning curve of blockchain, it really is quite exciting. the kinds of problems we think we can address with this new technical architecture makes us passionate advocates for it because we've lived the problems in health care and now we want to design solutions we think are fundamentally new, but uniquely efficacious for solving these longstanding, seemingly intractable problems. Great, thank you. So you mentioned one thing that I think perhaps we should talk about, and that is change management.

And I'll ask this question to the both of you. How much has change management played in sort of, both of you have been in the innovation space around healthcare for a number of years? How much has change management played in the ability or the non-ability of your client's customers to implement solutions that might. on the face of it, solve very important problems, but just can't seem to move with the change. Well, John can come in. Here's my comment on change management in general.

People will do what they get incented to do. And often the problem with change management is that you're introducing a new workflow, you're introducing a new technology that fundamentally conflicts with the existing incentive structure. And I've seen it time and time again. and why I think blockchain is somewhat unique. And so change management does present a fundamental issue when we talk about some of the disruptive applications of blockchain. I can't sell to an enterprise technology

that's going to fundamentally disrupt their core revenue generation engine. It just makes no sense to them. On the flip side, though, blockchain is really compelling because blockchains are somewhat unique systems for generating incentive for behaviors among all sides of a transactional set. So that's true of cryptocurrencies. It's true of the most successful blockchain use cases that we've studied in the sense that there's got to be a win, win, win.

And blockchains, I think, are uniquely situated to do that, unlike some other technical architectures, which are more extractative of value from players. Yeah, and I think what Corey is mentioning here is part of the challenge. I mean, I think healthcare is full of great use cases for blockchain, you know, where there's trust and transparency and incentive alignment issues that we can solve. But, you know, you have to consider not only the technology, but also the business model and the governance structure and the change management process in order to find the right use case that's going to move quickly and be embraced by the, by the, industry. And so I think that this is part, this is one of the key challenges. And we spend a lot of time thinking about which use cases can be realized.

And change management is a key element that we think about in terms of which projects we choose to focus on. I think those are some key insights that a lot of people working in this space can definitely benefit from. So just coming back to Nashville, you mentioned you're situated in Nashville. He's both sort of started in the blockchain space in Nashville. Of course, there's some other blockchain companies in Nashville, specifically, one that we know really well, and BTC Media.

You know, talk about the space there. What's the blockchain space like in Nashville? And more specifically to healthcare, why is Nashville such an important city in the U.S.? Yeah, and Nashville is pretty amazing. amazing right now, and I'm a native. So I'm like a unicorn here in Nashville because almost everyone else has moved to Nashville in the last 15 years or 20 years. But, you know, Nashville is kind of blowing up right now. It was number one in job growth, I think, in 2016, and number two in job growth in 2017. It's becoming, you know, it's always been kind of a very creative city.

It's known for musical and entertainment creativity, but this is my third healthcare technology startup to be a part of in Nashville. And it's just a rich environment. A lot of your, in healthcare, a lot of your customers are here. Four, 18 publicly traded health care companies are based in Nashville. Over 4,000 healthcare companies generally are based in Nashville. And so there's a lot of health care technology, health care services, and especially provider-side health care companies that are based here. I believe 40 or 50% of the for-profit health care companies in the United States

have their headquarters here in Nashville. So for being a mid-sized city, it's very concentrated in terms of, of healthcare talent, technology talent, and creative talent. And so that gives us an amazing, puts us in an amazing position to introduce technologies like blockchain for healthcare and kind of help lead the way. I mean, there's a real hunger because of some of the problems I mentioned in the intro around this kind of financial crisis we've created, there's a real hunger for new solutions and new business models to fix these health care problems. I mean, just think about the Amazon

announcement recently where they're getting together with Berkshire Hathaway and others to kind of form this. There's all this kind of new energy around the healthcare marketplace, around finding creative solutions. And so all of that, you know, provides a really rich atmosphere for us to use Nashville as a base for change. Interesting. That must put you in a very, a very good position then to have dialogue with companies in the healthcare space. Absolutely. Yeah. And on top of that, we've got BTC medias here and, you know, very, David Bailey and his team are very, very you know, have been very influential in kind of some of the work projects we've been doing. And there's a number of different startups in the blockchain space.

So there's also a very good kind of blockchain and crypto community that's emerging here. Great. So let's move to the core topic here, which is the healthcare industry. So let's unpack this first. So for our listeners, just for context, so of course, course, our guests are in the U.S. I'm located in France where, and from Canada, where, you know, all of those countries have very different healthcare, sort of structures, healthcare service structures. And, and my opinion of, you know, the healthcare care industry in

the U.S. is, I don't want to say it's, it's negative, but it's just, it seems strange to me. So please, guys, help me unpack the sort of medical industrial complex, as it were, in the U.S. Who are the players and what are the interactions between them and where does the patient sit in all of this? And let's remember the patient as a patient, not a customer or a consumer, right? Health consumer is not a bad term. Well, at least not in the United States. Sure. Well, it is a very complex industry.

And one of the reasons why we think blockchain is so appealing is because it's a very, very complex industry with lots of different players, unlike financial services in which you have a large, a range of large entities who essentially do the same thing to each other. Healthcare, you've got pharmaceutical manufacturers. You've got wholesale distributors of pharmaceuticals. You've got the pharmacy distribution companies, the technical software and payment middle. men in that arena as well. You've got health systems, physicians, insurance companies. The list goes on and on and on. And there are some very complex workflows between all these different parties. But to simplify it, even outside the United States, the world over, every health care economy has payer or payers. That may be the government. It may be private insurance companies. It may be

employer groups. It may be individuals who are responsible for all the cost of health care. And there are providers. Providers who deliver service. That service can be an action, an office visit, or can be a product in the sense of a medical device or a pharmaceutical. And so with that basic vocabulary of there's a buyer, there's service providers and product providers, and there's the recipient of those who is the patient, who is sometimes the payer, sometimes not. With that basic vocabulary, we can start to explore problems and complications in the industry, not only in the United States, but globally or in any setting whatsoever. But those are the fundamentals.

And so when I get into conversations with my European colleagues and who may not come from healthcare and they turn to me and they say something that I find incredibly naive and they say, but health care is free, isn't it? Well, first of all, it's never free. You may not be paying out of pocket when you go to the doctor, but you certainly have paid otherwise, to provide that service to you. So no matter if it's single payer or commercial insurance or no insurance at all, as it is in some parts of the world, health care is never free. And there's an ecosystem around the movement of money and services, just like in any other industry fundamentally.

The United States is somewhat unique in the sense that we have actually the largest payer of health care services in the United States is the U.S. government in the form of Medicare. and Medicaid. So Medicare's are our social insurance program primarily for the elderly, but not exclusively. And of course, elderly being a far larger consumer or user of healthcare services than any other age group. It stands to reason that the U.S. government has an outsized source or an outsized voice in health care policy in the United States. We also have commercial insurance, which is a somewhat unique artifact and employer-sponsored insurance, which is a unique artifact going back to World War II in the United States that I'm not going to get into, but a lot of Americans

either get their insurance subsidized through their employer who pays a portion of the premium, and the employee also pays an increasingly significant portion of that premium for health insurance, or individuals will go out and buy insurance on the open market. And insurance is somewhat unique in America in that you pay a premium in order to get access to the system itself, but oftentimes you continue to pay over and above, your premium or what's on insurance. So there's co-pays and deductibles and a lot of these trends. But globally, I would say, the healthcare industry around the world is very concerned with cost containment.

That might be because of Western lifestyles and the advancement of medical technology leads to longer lifespans. We see an increase in chronic disease and in forms of diabetes, hypertension, obesity, et cetera, these have turned out to be very expensive conditions to treat and to control. And so no matter who the buyer of the health care is, if it's the government in a single payer form, if it's an employer who is spending on services for their employees or individuals, our longer lifespans, our lifestyles in general, are leading to higher and higher health care costs. and everyone is concerned for how can we find ways to have better care at a better experience for the patient at a lower cost. And I think those three goals, something we called the triple aim about 10 years ago in health care, seeming to be the mantra for everyone around the world.

And so that really is what can unite us. In terms of the role of the patient, I think it's almost universally true that health care is done to you. as it's also done for you. But the patient, to say the least, doesn't have a very active role in this. We are not active purchasers of health care. Although it comes out of our pocket, none of the decision points along the way in terms of what services we're receiving, what will it cost are really up to us at all. We're also disintermediated from the data that gets generated about us that are held inside hospitals and physicians offices,

regulation of course they need to keep those records to justify what they're doing and to protect our data etc but often healthcare does seemingly does not work for the patient in all cases and that that has a lot of causes but it's somewhat unique among industries in that the primary buyer and consumer of the service has very little say in how that services delivered for what it costs. John? No, I think you're right, Corey. You know, I think if you look at healthcare spending versus GDP and income, the same cost trajectories and concerns are shown across the world. And so at the same time, the variation in quality on a variety of different health care services are also shared across the world. It's just we feel them more acutely in the

United States because we're spending almost 20% of our GDP. And so, but what's happening here seems to be being exported. And so we do feel like there's commonality there between the U.S. and other countries. And so a lot of the work that we're doing at hashed is to address some of these kind of cost or cost quality issues. that are being felt everywhere. This episode of Epicenter is brought you by Gnosis. Gnosis is an open platform for businesses to create their own prediction markets on the Ethereum network.

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So one thing that you mentioned, which I think is quite telling is that it's one of the industries where the consumer is perhaps the most concerned, but doesn't necessarily have a lot of say in the sort of the offering, right, or in the, you know, the service is rendered. And even, you know, to extend on that, so the data that is produced, right, so as a, as a consumer of healthcare, you know, I don't really have access to my medical records, not really know where they are. They're stored in different places, perhaps with different doctors. So there seems to be a lot of inefficiencies, and that's sort of just a surface of it. Can you describe for us what are, in your opinion, the biggest inefficiencies in the health

healthcare space and, you know, perhaps what, you know, if you could give us some order of magnitude of, like, what those inefficiencies costs in terms of maybe like dollar figures or even human lives? Well, so I mentioned earlier on that we're headed. So right now we're in the United States, we're at 3.3 trillion, around 18% of GDP. The common kind of analysis is that one third of that is waste. So there's a lot of administrative burden and a lot of inefficiencies in the health care environment. So that's kind of the cost savings opportunity that we talk about. You know, in addition, you know, there's a real pricing problem with health care services, especially here in the U.S.

And so the variation and cost for procedure, you know, for things like CT scans and colds, colonoscopies and knee replacements. A lot of work has been done by someone we're a big fan of Michael Porter at Harvard and others around kind of these variations and kind of the price of services and the quality of those services. So we've got a value problem in health care. We've got a problem with the relationship between cost and quality. We've got an opportunity to use blockchain to address this complex relationship between commerce and care that is, you know, a lot of people say it's broken. We feel like it's working as designed. We've designed a system based on claims infrastructure and fee-for-service and just a very much a volume-based

reward system that incentivizes people to overuse and over-prescribe and, and over-tests and with no regard for quality. So one of the key things that we're working on at hashed is, and it makes us so excited, is this kind of idea of designing an economy specifically for healthcare, for value-based care. Designing an exchange that we can talk about around the rational and transparent, open,

buying and selling of health care services. These and other concepts are why I started hashed and why I think there's so much excitement around what we're doing. Yeah, I mean, but it is a huge market. I mean, 20% of our gross domestic product in the United States is kind of what we're talking about. In terms of specific inefficiency, and I think John is right on, that the system is working as it's been designed to work. We're just realizing that that design is not what we want.

And so we really need to think hard about how we move some fundamental things in order to engender different behaviors. Health care is a very conservative industry, in some sense is rightly so because they're dealing with people's lives, people's health, and so they should move very cautiously. But in terms of technology, health care has always been ironically behind the curve, not so much in treatment technology is where we see those new innovations, robots, and genomics, et cetera. But in terms of administrative technology, healthcare has always been behind the curve. In the United States, cloud technology is just becoming the norm in healthcare, whereas

the rest of the world or the rest of industry, you really saw that eight, ten years ago. And so administratively, we have processes, which are fun. fundamentally more on the spectrum of the paper-based side than some more streamlined technical solutions around administration. And additionally, because it's so fractured that you've got a health insurance company, you've got multiple providers who have multiple contracts with multiple health insurance companies.

Administrative clearing of payment and service delivery, authorization for that service delivery requires a lot of back and forth between multiple parties. And so our technical infrastructure, primarily based on something called EDI, electronic data interfacing, which goes back to the Perlin airlift to give you a sense of how old some of that technology is, at least in terms of its conception, is really brittle infrastructure, transactional infrastructure. And that creates lots of inefficiencies. So I've created a video where I talk about writing a prescription and getting that the drug to the patient's hand can involve

45 administrative back-end touch points that the patient is completely unaware of. And oftentimes they break down and they have to be restarted. And no one of those 45 points really knows what's happening in any of the other 45 points. And so we've got a lot of sort of mindless administrative paper pushing, for lack of a better word, with no real oversight or overview into the overall process that's taking place. And that's where we get a lot of results like the patient feeling disempowered, not knowing what's going on. Why does it cost so much? These kinds of reactions that we have to it are based upon the fundamental dysfunction of administrative backend systems in the industry more broadly.

I think you hit the nail on the head when you say that the healthcare industry is one of the most advanced in terms of treatment technologies, but in terms of administrative technologies is really behind. and I have friends who work in the med tech space, and this is exactly the sentiment that they've reflected to me, is that it's sort of like, you know, walk into, you know, the hottest startup and they're using all the latest MacBooks or whatever, but like still using, you know, paper-based mail to communicate or something like that. We seem to be stuck in these, like, with paper and faxes in these 1980s era pipeline,

pipeline value chains with people, you know, who are sitting there extracting value. And, you know, and I think so we've got this opportunity to kind of change a lot of how those value chains work and, you know, and blockchain is really good at exposing who's adding value to a value chain. And so we are excited about, you know, promoting systems that return value to the consumer. I just heard an anecdote. There's a software company provides, most of their customer still prefer on-prem servers for their solution. And they're having trouble migrating them up to the cloud.

And to document how bad it is, they just finally offloaded their final on-prem DOS customer in 2018. Wow. That took me back. And so given the breadth of the industry, how many players there are, the variations in their technical stacks are vast. and so it's not an easy thing to move or to change all at once.

Sure. And if there's one thing that I think maybe the U.S. and France have in common in terms of the healthcare industry is just the complexity of the administration. I've got a stack that's probably about three inches high of papers because at some point the French Medicare organization sort of didn't know whom my new insurer was and then all this stuff stacked up and now I've got to go back and get all that paperwork to them and figure it up by myself and yeah it'll take me a while it's been sitting it's also been sitting there for a while as these things often do so yeah let's move on to so that's a great

that's a great intro into into hashed health so let's let's then dive in deeper into what you guys are doing specifically so you know I mentioned earlier that hash health is an innovation organization that is focused on bringing blockchain and distributed ledger technologies to the healthcare industry. So please describe us to us what fundamentally is hashed health and what is your company doing? Yeah. So, you know, we're a products company. But when we started the company, when Corey and I kind of got together early on, a couple of things. You know, our heads were full of disruptive ideas around a lot of the things we've talked about so far.

And medical records, you know, this concept of a patient portal where patients are opening and closing the door to their medical records as they see providers, you know, shared ledgers for episodes of care, new types of value-based contracting solutions for, you know, clinical and pharma, improving clinical trials, improving insurance, all of these great use cases that are very disruptive. But we also realized a few things pretty quickly. You know, we knew that, you know, back then, we needed to focus on what could become meaningful in a short period of time, and we needed to kind of grab it. We were a startup, so we needed to make sure we were building, kind of a roadmap towards these disruptive things by solving real problems for real customers

in a short time frame. And knowing that most of those early use cases were B2B, you know, what simple use cases can we define and then build a network around? So as Corey mentioned, it's not like our previous work where it's build a product, sell the product. And the minimally viable network concept is as important often as the, the minimally viable products that we create. So we needed networks and we needed collaboration.

So we realized that. And we also knew it was too risky at that time to kind of go all in on one product, like a supply chain product or a revenue cycle product, claims adjudication, those types of things. And we needed a way to explore a number of different projects. And the good news was our heads were full of great product ideas. And the other thing that we,

you know, very clearly realized was there was no market. We need to spend a lot of our time. You can imagine how, you know, that's a pretty daunting thing to start a company where there's no, there's no market. No one knows what you're talking about when you walk in and start talking about blockchain. So we had to create a way to really educate and organize the market around us and develop a market as we developed products. And so we came up with a model for hashed around kind of hacking together a market as we were. we build product. You know, by being in the space for a long time, we did have a good network.

So we immediately began searching out kind of thought leaders and collaborators. And so that was really, we hit the ground running, but we formed this model that we, that's matured significantly, but it's a model where we've got these three areas of our company. One's called collective, which is community building, once called Enterprise, which is basically market development for enterprise customers. And then one's called Labs, which is where we build product and we also innovate around business and governance concepts. That model has allowed us to begin, you know, really accelerating market development

and finding collaborators and thought leaders who could help us and organize them around these use cases that Corey and I have been dreaming of over the last several years. And so now you see us working on a variety of different use cases that we kind of prove them out and we take them to market oftentimes with partners. And, you know, we can go into a little bit more detail about a few of the initial product and business efforts that are emerging out of hashed. But I'll let Corey comment before we go there. No, it's just the first company I've been involved in where there wasn't sort of a straight-up. product play in IT.

And that owes to the uniqueness of blockchain and that it is a network play. It needs transactional counterparties utilizing that shared infrastructure, jointly operating that shared infrastructure in order to get the value out of it. And thus, it's not something that can be sold one-off to a customer. It's got to be convened in a way. We need joint buy-in from a range of counterparties. It's not a situation where I can build it and they will come. I think that's a really dangerous strategy, one not probably bound for much success.

And thus, working with enterprises, we need to be acutely aware of their appetite, their interests, their willingness to expose themselves to change and some technical risk and some business risk. And so it pays that we have such, you know, wide-ranging conversations with the industry. We've talked to hundreds and hundreds of players across the diverse ecosystem of healthcare, and we've done that globally. And so when a use case comes up and we start to think about who would be interested in participating in such a network, whose value or what value does it pose to different types of players, we've got a very long and complex set of notes on everyone in the market who's aware of blockchain, what they're willing to do, what they're not willing to do,

what kind of value do they want to see demonstrated first. And so I think the real value of hashed health is not only in the use case ideation and the building of blockchain solutions, but it's also in the network convening. It's how do we entice enterprises to come together and start to utilize shared infrastructure, which is really alien to them in general. We always reach a point in the conversation where they say, oh, but we can't own the infrastructure itself? I don't control it.

And they have to get over that speed home. before they really start to see the value of what comes from not exclusively controlling that transactional infrastructure. This is something that I'm very much familiar with is, you know, you mentioned it's not one of those industries where if you build it, it will come. It's more like if you build it or if you build a company and talk to them and educate and for a very long time, then they might want to sit down with you and then I want to talk about some applications that aren't very much fit for this technology.

and then maybe you'll build it and maybe then they'll buy it. Yeah, so the importance of, you know, building these networks is something that I very much agree with. And so specifically with regards to the, the applications that you're building and the solutions that you were building, we'll come back to those in a few minutes. I just want to first maybe talk about the three different parts of hash health. So you mentioned hash collective, hashed labs and hashed enterprise. So as I understand it, hash collective is sort of a community where you're bringing together different, market actors, stakeholders, developers, people from the industry,

and talking about some of the applications for this technology within the healthcare space. Is that sort of good representation of hashed community? Yeah, that's right. It's a community building organization within hashed. And so we think it's important to educate and organize companies and innovators and investors and all the different members of kind of this global conversation who really care about healthcare and blockchain and invite them into a forum that's open and neutral

that allows people to engage in the use case as they care about. And that has value for us as well. I mean, we get to meet a lot of developers and a lot of investors and a lot of potential collaborators from around the world through these conferences and meetups and podcasts and different innovative community building events, kind of whatever we can do, wherever we can do it, tends to provide a lot of valuable feedback for hashed. And so as we build this ecosystem, this community is now kind of wrapping around those

different products and businesses that exist within that ecosystem. So that's collective. And you guys are doing great work there. So I'll point out that there's actually a hashed health podcast that you can find on SoundCloud. I'll link to it in the show notes. And you guys put out videos quite frequently, explaining key concepts, but also exploring use cases, your blog, you are actually quite active on your blog, posting things regularly there.

So, yeah, it's a really good wealth of information. I think perhaps even like the sort of biggest repository of like information. about blockchain and how it pertains to the health in the health industry. Yeah, I think, you know, what hashed is, what differentiates us is deep knowledge about healthcare, blockchain, and venture capital. I mean, that's kind of our core team. And so we try to express our views and our feelings around use cases and around what's going on in the healthcare space that's appropriate for a blockchain audience.

frequently as we can. And I think that has served us well. And it's helped us develop this community and this market in a meaningful way. Cool. Corey, could you talk about then the Labs and your role there and what are you doing with the labs? Well, Labs is our product dev shop. So we have a team of full-time blockchain developers. Philosophically, Hashelth is protocol agnostic. We're not developing our own protocol. We're not a platform company per se. We're a solutions company. And so we've built on a variety of different protocols in the past year. And our products that we're launching this year are actually on two different protocols. We're a member of Hyperledger. And we've utilized various Hyperledger incubations. Fabric 1.1 just came out. Sawtooth Lake 1.0 came out

just relatively recently. But Project Burrow, Project Indie, Project Aroha, under Hyperledger, all very interesting developments and we are constantly staying up to date on what's happening there. We're also a member of the Enterprise Ethereum Alliance. A lot of our developers came out of the Ethereum space as their primary blockchain experience. That's especially valuable from a solidity perspective and smart contract architecture perspective. And so we want to bring the best protocol to the use case and not the other way around. And so issues of transactional speed and scale, cost of network running, and whether it's proof of work or otherwise, levels of privacy that are achievable on different protocols, either from the ledger perspective or from the

transactional perspective. Can we have individual transactional privacy? How we deploy the network. All of these considerations have to be folded into what we think is the best protocol in any given time. And we also advise everyone to say, hey, you know, this stuff is evolving rapidly. Let's let's hang back a little ways and not go all in on a single protocol because, you know, every two months, it seems over the past two years, seems like a whole new world in terms of blockchain development. So last year in 2017, we did a lot of proof of concept, public demonstration work. We built out some early prototypes around provider identity and credentialing, utilizing fabric and Ethereum. We did some work with the state of Illinois last summer on the

Illinois blockchain initiative on reciprocal medical licensure between states. And for that, we used the tendermint platform. Got some real experience with their ABCI or application blockchain interface architecture. Did some really good learning there. And of course, we're always working on Ethereum. And some of our latest work is looking at some of the newer Ethereum token standards, specifically 721 and non-fungible tokens. So Labs is where we build. We like to build. We like to build in partnership with enterprises. And in terms of deployment of that product into the marketplace, there's a variety of ways that can be deployed.

We can do it. We can do it in form of joint ventures. Of course, we've been paying attention to the ICO market and the feasibility or desirability of that funding path. It's getting increasingly complicated, but it's still there. And so we have to pay attention to it in terms of how these products ultimately get launched out into the marketplace. Interesting.

So it seems to me like your, because you sort of describe hashed health sometimes on your website as a consortium. And in fact, you're more like a facilitator of consortiums, providing solutions for consortiums. That's right. I mean, we're really our network conveners of networks, of enterprises, of networks of enterprises who want to participate in a use case in that transactional infrastructure, but we're also a party to that transactional infrastructure to that network. So we don't just do it on the behalf of others.

That's true for both network participation as well as development. We don't build and then sell it to somebody else to go run. We like to participate in everything we continue to build in. And we do have some higher level visions of ecosystems emerging, but that can't be too tightly planned. So we do have notions of how these solutions start to interconnect. But we're happy to wait and let some of that become, more apparent before trying to hard-cote it into the ecosystems itself.

So, I mean, we're a products company. But, you know, the work we do, you know, the blockchain spaces, you can't just build a product and put the product out there. There's a lot more to it. You know, it's this combination of the product and the business model around that product and the governance structure. And I think that's what Corey is better than anyone I've ever met at. which is putting together these different pieces of what creates a meaningful

blockchain innovation, especially in healthcare with his healthcare background. And so I think if we talk about a couple of the initial products coming out of hash, I think some of that could become more clear. So that, I guess, takes us to our next topic, which is more on the hash enterprise side. So before the show, we were talking about two products that you have been. built. So one is a provider credential exchange and the other is a decentralized platform for healthcare service purchasing. So let's perhaps start with the provider credential exchange, which at a high level is sort of an identity management system or reputation system

for doctors, healthcare service providers. I think of it sort of as KYC for a doctor. So could we please go into detail about this platform and why did you build it and what problem is it solving fundamentally? Sure. Well, I think KYC is a useful metaphor. The devalidation of the experience, education, and competence of a health care provider, whether that's a physician, a nurse, there's lots of different professions that require this kind of verification, is very important, and it's true the world over. So hospitals have to. to properly credential a physician to understand their competencies and their license structures before they are allowed to practice in that hospital.

Health insurance companies do the same thing. And in fact, the regulations dictate that you have to do this over and over again every two years for a hospital, every three years for a health plan. So you're constantly reviewing the credentials of a physician over and over and over just to be sure that they're allowed to practice and that you want to accept the risk of having them practice in your facility, in your clinic, what have you. It's primarily still a paper-based process in the U.S. healthcare industry where we're faxing copies of licenses, completions of graduate medical school education, all kinds of artifacts, if you will, about that physician, their education,

their experience, and their performance back and forth between hospitals. There's also the the requirement to, quote, primary source verify this data. So if there is an authoritative source, I have a medical license from Illinois, the hospital will call Illinois and ask them or go onto a website, Illinois's website, and verify that the license really exists, that they really did graduate from that medical school, et cetera, et cetera. And so it's a multi-party friction-filled workflow. And those two keywords sort of raise our blockchain antenna.

We've got multiple parties. We've got a lack of trust fundamentally in the artifacts themselves, and we've got a lot of friction, transactional friction in the acquisition and the verification of these artifacts. That sort of starts to get the ball rolling on what we think is a blockchain use case. The reason we built it as an exchange platform is to answer the question of what's the business case for doing this on the blockchain? Whose interest does it serve to start to move these artifacts and to verify them utilizing a blockchain? and we think we can articulate value for all sides of the equation, which is absolutely vital for making a blockchain idea into a real blockchain product that enterprise will be attracted to.

They have to understand the value of doing it in this way versus doing it in any other way. And so the provider credentialing exchange really is an exchange, very much akin to financial exchanges or other kinds of data marketplaces or exchanges, where we have producers or primary sources of these artifacts, and we have consumers of them. And, of course, in the middle sits the physician themselves

about who all this data pertains to. And so we want to provide a streamlined, auditable method for primary source entities to make this data available to the consumers. And we want to also attach trust data that we can monitor on the blockchain for the consumer to understand that the artifacts they're receiving

really did come from the primary source. We can do that with various key signature technologies. And we can also demonstrate via has that the artifact has not been altered in any way. And so we start to build up a history of trust of verification around individual artifacts. And the goal of this is to streamline the process of getting the physician into the room

to actually treat the patient and being paid for doing so. Currently, in the United States, that process takes about 30 to 45 days to properly credential a physician. Outliers look at it. look at 120 or even longer number of days, nine months sometimes to properly assemble all the credentials and to review them and verify them. And so doing this with a blockchain with a trust layer, and that's really what the blockchain does there, we think we can significantly reduce the

cycle time in this multi-party workflow to enable physicians to be able to practice faster and to be able to start generating reimbursement or getting paid for what they're doing, which is the core of the healthcare business. We think we can bring it down substantially. In fact, we think we can price it down to the day of how much is being lost per day that this process takes to complete. And so what's attractive about the exchange infrastructure is I'm not disintermediating necessarily anybody. I'm providing a forum, a marketplace, if you will, for producers and consumers of the data to meet, to discover value, to discover price, et cetera. And I'll let the market decide what's valuable in terms of how much that artifact costs,

what's it going to cost me to get that verification signature, digital or otherwise, on that artifact, et cetera. But that's the most efficient way to move forward and to have the marketplace itself discover value. And so provider credentialing exchange is the first example of our product that really is a market-level solution. It's not a customer-focused solution.

It's meant to address all players in the market, and it's open for all players in the market to participate in. Interesting. So the way we're bringing that to market is to convene that minimally viable network, that phrase we bandied about first in a pilot sense. What's the smallest transactional set of entities that we will need in order to prove value on the platform, and then articulate means for the network to grow? So who can come onto the network, who can go off the network, what's involved in those

decision points, and that all involves the governance agreements. have to build up around it. And so this solution is being built by hashed health. But I suppose you're facilitating sort of the initial conception of a network in which different stakeholders, right, the hospitals, the universities, you know, the healthcare practitioners, etc., will participate. Well, we're launching it as a joint venture into its own company called provider credentialing exchange with a partner who brought significant off-chain tech stack to the solution set. So alongside the blockchain, there is an unstructured database product which stores and can move the artifacts themselves. Some of them can be large, some of them can be highly sensitive,

and so we're very acutely attuned to what we're putting on the chain. And so the blockchain itself sits alongside this exchange platform, if you will, to actually move the data, and the the blockchain provides a role. Hashed health's role is to build the blockchain component of that overall solution and to jointly work with our partner on articulating the business case and the use case and to help convene the network. Okay. So as is often the case with these types of sort of consortium networks, my question is, what does the blockchain bring here that a, it seems to me like someone could have just started a company built, a SaaS platform with a traditional SaaS business model and even potentially integrated some

sort of a market where an identity provider could be paid for artifacts that they provide. What does your solution offer that such a SaaS product or with a trusted third party that presumably healthcare service providers and companies in the healthcare industry would trust? What is the advantage? Well, first off, with provider credentialing, there's a whole range of primary source entities who are unique sources of data. Some of those entities already monetize their data

in the status quo via their own proprietary portals or verification services, et cetera. So that presents the consumer with a bewildering array of sources that I have to assemble in order to get all the data. And so the exchange platform provides the consumer a unified place to try to get that data. No single entity could spring up and provide that data without the consent and participation of a wide variety of parties who provide those artifacts and who are the legal primary source of those artifacts.

And so what the blockchain does for those producers of the data is it provides a guarantee that although I'm making my data available on a platform, that is not my own, out of my control, the blockchain guarantees visibility and transparency into who's utilizing my data and on what terms so that I can trust making my data available on the common exchange platform because the blockchain guarantees that I'm getting paid when I'm owed, and I'm getting full transparency

into who's utilizing my data. For the consumers, the blockchain provides a unique role that a third party cannot do in that the artifact is signed by the primary source entity and that it's fundamentally been unaltered and such there can be no third party who can provide that level of trust both for the primary source entities and the consumers of the data without a ledger, an immutable ledger to sit alongside any exchange platform to provide that level of transparency and the cryptographic trust we need around the

individual artifacts. The fundamental problem in provider credentialing exchange is that you can't take another person's word necessarily. And so we have to find a means of mediating the movement of data while also providing that trust layer back to the primary source entity, ultimately. And we think that blockchain is the unique technology that enables that.

The fundamental problem around all technology and provider credentialing has been trust. And blockchain provides that trust layer in a, I think, unique way. So who are the first partners that are onboarding with this platform? I can't name names yet, but we've been in conversations for about five months with a variety of different entities, some of who are stepping up and really want to participate in the launch and the pilot. And, you know, this is the fundamental problem of all block, well, not blah, it's the challenge of all blockchain solutions is how do you grow, hack the network? So what incentives are there for the early participants versus someone who comes on later?

And how do you balance those early incentives with a fair governance structure for the future operation of the network itself? And these are some of the hard problems, hard challenges that we're currently working on and solving. But we'll be coming out in probably Q2, Q3 with a list of the initial participants. But, you know, we've been talking to health plans. We've been talking to very large health systems, hospital companies, hospital systems, etc. We'll be talking to a range of primary source entities, all who are very interested in the solution set, they just want to know the details. What does this mean for us? What do we get out of it?

What's going to be demanded of us? And so that's where the rubber really meets the road and sort of deploying these networks, is figuring out all those details and how we start to encode our sense of working together into a governance agreement. Sure. I totally get that. I mean, the incentive model is very important. However, for a platform such as this one where, I mean, I presume there's no monetary unit or monetary token in sort of the payment and the purchasing of credentials, is that handled off-chain or is that handled by a token of value on the system, on-chain? It is handled off-chain, and it's priced and transacted in Fiat and U.S.D. Okay.

The model could easily accept the token. It's more so our judgment that the market is not ready to transact in a token whose acquisition introduces new friction. In addition, we've been doing a lot of research into medium of exchange tokens. the tokens used for payment, for buying and selling. And those kinds of economies are extremely difficult to balance. And so it's great on the whiteboard. It's a whole different matter when you're actually trying to get enterprise to sign onto such a platform. Yeah, absolutely.

I mean, I sort of feel that that pain point of onboarding enterprise clients onto a platform. You mentioned, you know, so the incentive structure, because that's, to me, that's one of the major challenges, is converting a proof of concept with an initial group of sort of eager and interested companies and clients to a network that will grow and scale and become ubiquitous and perhaps even replace the existing systems. How do you think you'll get over that hump of going from the POC to the production system? Yeah. Well, it will be a production system, even in pilot stage. So we've got the fundamental technical proof of concept already accomplished.

We think, and the goal of our pilot is to carefully document the ROI. You know, we've got our research and numbers on the front end, but we want to bear out that value in actual transactional counterparties. And we think once we do that, the cost and the burden of this business process and the status quo is such that if we can prove value. in operation with a pilot group, expansion of the network will be relatively easy. In addition, due to our experience in health care, we know who to look for for, quote, aggregating participants on the network.

So selling it one by one is never going to get you very far, but can we approach a health system that will bring on multiple hospitals in a marketplace or in a geographical region? Can we go to an association to provide us access to a, number of health plans, et cetera. And so these aggregation strategies are important, and you just have to know how to navigate the different sort of silos within health care on the provider side, on the health plan side, on the primary source side, et cetera. And so those conversations have been ongoing. And so just real quick, you know, we've been working on this use case for around two years. So we've built multiple versions of the product and on a couple different platforms.

We've kind of had some different iterations around the business model for it. And so, and we've, over that period of time, we've received a lot of feedback on kind of these different go-to-market strategies. And so we, that's part of why at this point we feel pretty confident that we've kind of landed on the right model. So this will unfold pretty quickly over the next six months or so. And it'll be fun to watch it get to market. Fascinating. Well, I certainly hope to see more about this and looking forward to seeing what this

what this production platform will look like and who will be the initial partners. And I wish you a lot of success with that. The other use case you mentioned, this is one that I find really fascinating. Although I can't really conceive it from my sort of European perspective is a decentralized platform for healthcare service purchasing. So you described it earlier as a platform where non-fungible tokens could be issued by... Minted. Right? By health care service practitioners and sold to purchasers of medical...

services. So can you unpack this use case for us and why is valuable and why you're building it? Right. Before I talk about the technology, let me just talk about the setup in the U.S. healthcare market. It's primarily addressed at the U.S. market, although it has applicability, I think, the world over. And that's a couple of facts. Price in healthcare is a negotiation between payer and provider, except that in the vast majority of cases, globally, the payer is mediated from the consumer. It's not the same entity. So in the United States, a health insurance company reaches a pricing contract with a physician, a group of physicians, a hospital. That price list is under non-disclosure agreement.

They can never disclose the price to me, the consumer, me, the health plan beneficiary. And so there's great anecdotes. You can just Google it. You go into a physician's office, and the first thing they make you sign as a patient is a financial responsibility for them, saying I will agree to be financially responsible for all the costs. with the service I'm about to receive, if you were to turn around and ask the obvious question of what is this going to cost? No one can answer that question for you.

No one. And so the world over, no one knows what healthcare costs on the front end. Now, in some cases, that's completely understandable. You know, if I'm in an accident, if I have a trauma, some sort of emergency condition, if I had diagnosed with a long-term debilitating disease, the cost of that care,

is unknown because the time frame is unknown. But there are a range, somewhere in the range of 45% of all health care services are what we call shopable in that there are, there's quite a price variation in a market, there's quality variation in a market, and I have the luxury of being able to shop for that service. And in those situations, there is no way for me to shop because there is no understanding of price on the part of the buyer. That's true of me as a consumer. it's also true of other kinds of institutional buyers of health care services. And in the United States, the prime example of that is the self-insured employer, who is a large enterprise, usually around 500 employees or more,

does it make sense to become a self-insured entity, who's paying all medical claims out of pocket? So it's really helpful to think of the self-insured employer as a single-payer entity, who is then trying to buy services on behalf of their employees and the covered lives, the family members, loved ones, children, dependence, etc., of their employees. And they don't have any tools by which to rationally buy health care. The way they do it now is they actually make an agreement with a health insurance company to, quote, rent their physician network and inherit the prices that the insurance company negotiated

with the physician. But I'm paying out of pocket, but I can't enter into the negotiations around price. Now, we have seen some innovations among self-insured employers of the last five years or so. Actually, self-insured employers attempting to directly buy services for their employees. There's a great example of Lowe's a large company in the United States. It's a hardware home improvement corporation. They made an agreement with the Cleveland Clinic to provide back surgeries for all their employees. And so what they had told their employees is if you need back surgery, which is not an uncommon procedure for,

for a hardware store, for people lifting lumber, et cetera. If you need a back surgery, we will fly you to Cleveland with a loved one, and we'll put the loved one up in a hotel. And we'll have all our surgeries done by Cleveland Clinic, because by centralizing it, by negotiating price and quality with one provider, they not only had predictability in their cost, but they actually reduced their overall spend on back surgeries. Because the alternative is to tell the employees,

just go to whatever hospital near you, and get the surgery wherever you'd like, that introduced such an intense price variation in that service that it ended up costing lows more than to go out and try to buy the services directly. Now, the problem with that is that it's really hard to do those kinds of deals, something called reference pricing scheme and health care. It's very cumbersome. There are no tools for it.

And so Bramble, which is the platform we're talking about that we're building, is designed to allow. buyers, buyers can be institutional, governmental, consumer, buyers of health care services to act in an economically rational way around the purchase of services. And to do that, we've created a platform that allows the providers of the service to represent their service in a non-fundable token structure, an ERC 721 compliant asset token, which represents a specific position, a specific service under specific terms and conditions, and then the ability to make that service available on an exchange marketplace for buyers to meet.

And simply by creating a service asset that has a time bound to it, it's redeemable within a certain amount of time, we introduce a whole new variety of purchasing strategies around buying health care services. Instead of me just going to get an MRI, because that's what I'm told I need, with no understanding of the quality of the MRI I'm receiving or the costs. And if you look at procedures like MRIs or colonoscopies, et cetera, price variation, even in a single city in the United States, can be extreme as much as 10x between providers. So when I need those kinds of services, I now have the ability to go out and either prepay for them or do a future option to buy that service,

or a whole variety of outcomes-based payment models where I say, I'll pay you some now, I'll hold some in escrow, based upon some quality outcome from the procedure I'm buying from you. We've got a whole new vocabulary for buying, but the fundamental philosophical premise is to allow the buyers and sellers

to discover value through marketplace dynamics, which is something new under the sun for healthcare services, but is very common in almost every other aspect of our lives in terms of purchasing even services whose cost may not be well known at the outset. And so this is done elsewhere. It's just simply not done in healthcare, and we want to fundamentally change that

through the Bramble platform. Okay. So there's a lot here. Now, so the first thing I'd like to maybe address is the pricing. Of course, here in France, you go to the doctor and the price is set by the government, right? So the price is set by the state.

You pay $23 for a doctor's visit. You usually pay that up front or, you know, some doctors you don't pay it up front. You simply get reimbursed by the Medicare organization. And other doctors are perhaps a higher quality a doctor or maybe a doctor that, you know, provides additional services, has the ability to charge more and certain insurance companies will pay that premium, right?

Sort of, I guess, higher-end doctors or specialties. Right, expanded services. And so there's predictability in the price. So, and even for a non-conventional doctor that charges more, there's still some predictability because there's sort of tiers in the service offering. So you can't really go any higher than that. and every type of medical procedure or service offering, I presume, I believe, has a same sort of structure. So insurance companies are, you know, sort of have a pricing structure that they can adhere to.

And, you know, if you want to buy, so the basic insurance, you can buy that. Or if you want to buy the insurance that gets you, the premium doctor, you can buy, you can buy that insurance. And some employers will offer that. So it's a very different model. And so when you talk about price fluctuations or sort of hedging for the future price of a procedure or a service offering, that idea, that sort of market idea and health care to me is slightly foreign. Well, I mean, don't think about in terms of hedging future price variation because prices don't necessarily fluctuate that much, especially on an annual basis. But it does introduce predictability for the buyer in the sense of, I know. I can buy all the surgeries of a certain type I need for my employees right now.

And maybe I can get a discount by buying it in bulk and paying up front. Or as a buyer myself, I can put out an ask on the market. I need five surgeries. I'm willing to pay up to X if these quality metrics can be met. Who wants my surgeries? Who wants my business, in essence? And so we're starting to create a sort of an asset marketplace around these services. but fundamentally price is always contextual value.

And thus, when it is set by a single entity, now in your case, there is a single payer. So payer has the right to sort of have an outsized opinion about what things ought to cost, right? If you don't like it, you can go elsewhere, is fundamentally the premise there. But price being negotiated on someone else's behalf does not take into account

what they value. And so, for instance, what I want in a primary care doctor may not be the lowest cost doctor. It may be a doctor who can meet me after work hours. It may be a doctor who agrees with me religiously or philosophically or has opinions about diet that are important to me. Certainly my wife, and we were selecting an OB for the birth of our children, that's a very specific list of what kind of doctor I want to work with to bring my children into the world. So I want a female doctor. I want a doctor under the age of 35 who understands fundamentally my experience. I want a doctor from my ethnic group who speaks my language. And so value and price is a very contextual and personal thing, especially in healthcare. And we don't have market dynamics now that allow anyone to discover price, much less

value for the services that we pay for. But ultimately, a lot of of that payment comes from me, the consumer. So, I mean, this might be particular to the United States, but the majority of U.S. workers have insurance that's sponsored by their employer. And the majority of those workers also have something called a high deductible health plan. So in addition to paying $15,000 of my money for my premium for health insurance, I'm also responsible for now an average $7,500 deductible before my insurance kicks in. and the majority of Americans never hit their deductible because, thank God, they're well, and they don't need to use the system a lot.

But what fundamentally means is that for the entire year, I'm paying all my health care out of pocket, coming out of my pocket directly. And yet I have no say in understanding price options, quality options, service variation offerings, etc. I show up and they do something for me slash to me, and I get a bill 45, 60 days later. outlining my responsibility to that, but I can't know ahead of time. And that encourages a lot of perverse economic incentives on the part of payers and the part of service providers

to not give you that information, to make decisions with you out of the loop. And I think that is fundamentally wrong, but I think we can get a lot more value by bringing and activating buyers of healthcare and putting them in communication with the service providers. I think the service providers will get a lot of value out of this setup as well. I mean, in the United States, CAQH has shown that health care providers spend 14% of every dollar simply to recoup that dollar.

So the AR cycle is about 60 days with about a 14% overhead. You know, if you compare that to retail in the United States whose payment overhead is 2%, the physicians are giving up a significant amount of money simply to get paid in 60, 60, to 120 days. Our system can allow the physician to name their price, and if the market likes their price, they can get paid up front with very little overhead compared to the traditional medical claims system. And so fundamentally, Bramble is a new payment rail for healthcare services that puts the buyer of the service into a closer proximity to the service provider in order to negotiate and discover value. And it's creating a transparent, competitive playing field where value is rewarded and

people are able to shop based off of reputation or cost or their definition of value. And I think what it also does is it creates a platform upon which we can get very innovative in terms of the types of services that are offered on the platform. So it goes way beyond our current kind of, you know, just MRIs and colonoscopies and shopped with health care services. You can start to bundle together very innovative packages of health care services and telemedicine, travel medicine, and surgical episodes and, you know, things that are designed specifically for certain populations of people.

And you can also start to organize the market on the buy and sell side an interesting new ways as well. So it really kind of changes the container around how health services are transacted today. Interesting. One of the things that we talked about a little bit before the show, and I'd like to address is perhaps the risk that speculators try to take advantage of arbitrage opportunities, so buy up large swaths of types of services, or buy up, you know, the entire service offering of a specific practitioner or group or hospital company and then sell those on the secondary market at a higher price. Can you address those, you know, this and perhaps other risks of attributing too much sort of market freedom to

something as important to society as healthcare? Sure. Well, it's important to point out at the outset that that's already what happens. So what you describe now perfectly describes what health insurance companies do with networks of providers. So they negotiate a price. They relist that price in the form of premium payments, and they take a margin off the top of that. And so your ability to access a network of physicians

is controlled by what insurance company and premium you pay, and they've already bought up all the services from those providers and are relisting them for you in the form of your premium payment. So that's pretty descriptive of what's happening in the status quo. Our system addresses it in two fundamental ways. The first applies only to our platform, and the second, of course, applies both to our platform and more broadly, even in the status quo now. So the first is that these non-fundable tokens have an expiration date.

This is essentially a service-backed asset that entitles you to the service within a given timeframe. That time frame might be 90 days, it might be a year, but eventually it eventually, it eventually, or it gets burned because it's not been fundamentally redeemed. That's important for the provider not to have an open-ended liability on their books to provide a service at some future date if that future date is not found by a window. But that has an important function on price in that our system connotes a premium price dependent upon the size of that time window. And so the longer the time window, the higher the premium price because it gives you more flexibility in how you want to use that service. And so what that means is these non-fungible, tokens are constantly depreciating in value. They never appreciate in value. And so it doesn't make sense to buy up and resell unless you radically alter the price of that because these are always depreciating there. The second defense against speculative arbitrage is that we're talking about a very flexible supply of services. There is a hard limit on the number of

providers that exist in the given market and the number of services that can be visited. delivered within a certain time frame, but ultimately it's up to the provider to dictate supply. And so if someone were to buy up my services and relist them at a higher price than what I was offering on the market, I would simply mint more NFT tokens and offer them at that lower price knowing that the market respond to my price point and not that arbitrage one. So we really enable or empower the provider, the service provider, to be in consistent. control of supply as a means of controlling third-party speculative arbitrage. They can do that today.

So, I mean, when I go into a physician, if I don't have insurance or the premium is too high or my deductible is too high, physicians are willing to negotiate with me to bring down that cost for me with payment plans and other kinds of options right now. So we see that there already is that sort of supply and price flexibility on the part of providers, we just want to provide them with an easier platform in which to effectuate that. One other comment here is that part of the information that's embedded into the NFTs is kind of these terms and conditions. And that's an area where we can start to innovate over time in terms of the types of contracts that exist on top of the marketplace that buyers and sellers can enter into.

And so I think there's a lot of different things that we can do to spur innovation and make sure that the producers, the mentors of these tokens are seeing the right level of value and participation through those processes. So we've got some ideas about how this kind of unfolds over time, and we're going to learn a lot over the first few years of this product. and continue to mature it. But we feel like we're at a point now where it's time to get this thing out into the wild and see how it's being used. And we're under no illusions that this is not a very forward-looking idea.

It comes out of left field for a lot of people. I think it resonates a lot with the experience in the United States of being a consumer of healthcare, a buyer of healthcare services. But we've already started to talk about or engage with parties who could perform, the minimally viable network. Where I think Bramble gets very interested, and that's the name of the platform itself,

Bramble, is that it meets where a lot of very forward-thinking value-based purchasing strategies that Medicare has piloted and commercial insurance is piloting and self-insured employers and employer purchasing groups are interested in utilizing as a means of control and cost. They just don't have tools to pursue those strategies. And so I think Bramble meets the sort of leading edge of innovative payment design for healthcare in a unique way. And we draw on our own experience in those kinds of movements over the past 10 years in the design of Bramble. Cool. And so Bramble will be, you mentioned an Ethereum-based platform will be on the public Ethereum network,

or is this going to be a consortium network deployment? The movement of the NFTs and ownership of it is tracked on the, actually, the public Ethereum chain. That's our design at the moment. It utilizes that public utility that Ethereum is a really robust, very secure chain. The data about the tokens themselves is held off chain. And so there is a semi-centralized component to the overall platform that utilizes Ethereum as transactional settlement and ownership provenance of those service tokens themselves. But given privacy regulations and healthcare, etc., there is a component that we need to run off-chain

in order to ensure privacy for medical purposes. And what is the timeline here for deployment or release? We hope to have the V1 pilot in Q4 of 2018. So we've already done some significant work. Our team of developers showed off a very early build of it at the Ethereum Waterloo Hackathon last fall. That project was entitled Convergence, but it fundamentally showed how to create a basic service asset token and move that around on the Ethereum blockchain. We've been really had a lot of lift from the ongoing development of the 721 non-fungible token standard on Ethereum, which has brought a lot of good thinking about how these NFTs are not only different from ERC20, but how they interact with smart contracts and what kind of smart contract functions do you need? in order to effectuate a real economy around NFTs.

Cool. This is all really fascinating stuff. I mean, there's lots more we could talk about. I really wanted to touch on identity systems and how they pertain to the medical space. But unfortunately, we are running a bit long. So we'll have to keep that for another conversation.

But thank you very much for coming on, guys. It was fascinating to speaking with you and learning all about how you guys are disrupting the healthcare space. Yeah, thank you for having us. Hey, thank you so much. It's been a pleasure. And thank you to our listeners for once again tuning in. You can subscribe to Epicenter on iTunes, SoundCloud, your favorite podcast app.

We're also on YouTube. And you can also leave us an iTunes review, and we really enjoy it and appreciate it when you do. And it helps people find the show. And, of course, you can join our Gitter community, which is at episcenter.com. dot TV slash getter if you want to leave his feedback or if you want to interact with other epicenter listeners so thanks so much and we look forward to being back next week