Americans could do with new ways to save on healthcare. Obamacare-administered plans are set to get more expensive by up to 50% this year amid uncertainty around federal subsidies that help pay for premiums. The cost of employer-sponsored insurance, meanwhile, continues to jump well above inflation. Many of us are hit with surprise medical bills we can’t afford.
CoverUS, a startup, has one idea: monetizing our health-related data. Through a new blockchain-based data marketplace, it hopes to generate revenue that could effectively make insurance cheaper and perhaps even encourage us to become healthier, thus cutting the cost of the system overall.
It works like this: When you sign up, you download a digital wallet to your phone. Then you populate that wallet with data from an electronic health record (EHR), for which, starting in January 2018, system operators are legally obliged to offer an open API. At the same time, you can also allow wearables and other health trackers to automatically add data to the platform, and answer questions about your health and consumption habits.
Why bother? To create a richer picture of your health than is currently held by the EHR systems, health providers, and data brokerages that buy and sell data from doctors, clinics, pharmacies, and other sources. By collecting all our data in one place, CoverUS wants to give us more autonomy over who uses our personal information and who makes money from it.
“From a moral standpoint, we think people should own their healthcare data. It’s currently being brokered to the tune of hundreds of billions of dollars without most of us knowing that it is happening,” cofounder Christopher Sealey tells Fast Company. “Secondly, we believe that healthcare data is most valuable when it’s in an individual’s hands because your electronic medical records and prescriptions only paint part of the picture. Nobody knows better than you how you are doing.”
The health data brokerage industry includes companies like Iqvia and Cinven. They buy and sell anonymized data under the Health Insurance Portability and Accountability Act (HIPAA), as well as non-anonymous health data not covered by that privacy standard, including what you put into search engines and health websites. Drug companies use this data to develop new products and target treatments to particular doctors and hospitals based on prescribing patterns. The data mining companies are often criticized for being intrusive, but it’s arguable if their profiles are even consistently accurate. When a reporter for The Atlantic downloaded her file last year, she found that the data was missing a good deal of necessary information.
CoverUS, which plans to launch in the first quarter of 2018, will pay for the data we gather in the form of a fixed-price cryptocurrency called CoverCoin. Users generate coins by signing up and then sharing their data. The startup then hopes users will be able to spend the coins on services that improve their health (like gym memberships) or deposit them in a health savings account where the coins can be exchanged for insurance plan savings. Sealey says it’s in discussions with several providers.
On the phone, Sealey and his cofounder Andrew Hoppin went through some examples of how transactions on CoverUS could work in practice. Say a user named Farrah Bostic signs up for CoverUS through her employer, Safeway. She is a diabetes sufferer so a diabetes care company, Abbott Diabetes Care, is interested in her survey data. Filling out Abbott’s form gains Bostic 85 CoverCoins. She completes another family history health survey that brings in a further 75 coins. She agrees to take part in a drug trial: 150 coins. Then she fills her prescriptions as her doctor suggested: another five coins are deposited to her account, for a total of 310 coins. On the other side of the ledger, Bostic spends 120 coins on gym membership and another 50 coins on a ride to her doctor.
Paying someone in crypto rather than real money sounds like a dodge but actually has practical benefits, Hoppin argues. For one, the value of transactions in the system actually goes toward making someone’s health better, not some unrelated purpose.
“If I just pay you in dollars for taking a diabetes trial and you spend that money on candy and cigarettes, the virtuous circle is not complete,” he says. “The [health] system is not any more efficient because you’re going to be in the emergency room anyway, even if you’re being financially rewarded. We want to incentivize people to use the [reward] in service of their health.”
CoverUS, which won a recent blockchain for social good hackathon, plans to meet its own costs by charging for access to its membership and by issuing a separate “utility” token through an initial coin offering (ICO) later this year. This will give clients, including health researchers and advertisers, the ability to view patient data on a time-limited basis, much like they were using data pipes from Facebook or Twitter. (When individuals sign up for CoverCoin, they agree for their data to be used by third parties).
Hoppin and Sealey are a little vague about exactly how much value users of CoverUS can potentially generate. They say it will depend on a user’s health and demographics. Sicker people with special conditions that are of particular interest to researchers will likely to be able to generate more money. They put the average possible payout to individual users at the equivalent of $100 to $1,000 a month, though they’re still crunching the numbers.
The beauty of using a blockchain for health data–a decentralized ledger that records digital transactions–is that no single entity owns all the data. It is both part of the network and accessible only if we, the generator of that data, choose to open it up to outsiders.
“When I tell people I’m doing a blockchain-based healthcare solution, they assume I’m using blockchain so I can go to an ICO quickly and become a very wealthy person,” Hoppin says. “That’s not true. We’re trying to close the financial gap in healthcare and put people in charge of their data and the value of that data in ways that makes the system more efficient.”
Correction: We’ve updated this article to remove a reference to the data company Veeva: It does not sell HIPAA-covered data. Its Veeva OpenData product contains demographics and compliance data about doctors, hospitals, and other healthcare organizations.