Health + Innovation

Blockchain in Healthcare & Wellness Benefits: Use Cases & Challenges for HR Professionals

16 August, 2019
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"HR should keep a pulse on the implications blockchain holds for delivering the employee experience with improved healthcare and other benefits."

There is a huge opportunity for blockchain to establish itself in the healthcare sector. Learn more about specific use cases that can help innovate how HR departments deliver healthcare & wellness benefits.

Blockchain technology is one of the most disruptive technologies on the market today, with multiple industries adopting it to optimize processes and innovate the way companies function. It has proven to be a game changer in the business arena and the global blockchain technology market is estimated to amass US$20 billion in revenue by 2024. Meanwhile, SAP reports that 71% of business leaders who are actively using blockchain believe it plays a key role in advancing technology and reestablishing industry standards. 

While blockchain has already been widely integrated in processes for supply chains, banking and cryptocurrency (e.g. Bitcoin), the healthcare industry has also been identified as one of the top industries likely to be disrupted. Blockchain technology could offer solutions to some of  healthcare’s greatest challenges, from securely managing patients’ medical data to tracking large databases of drugs through the supply chain or extracting healthcare data from clinical trials. As the technology advances and becomes more readily available, more healthcare organizations across the industry will be adopting blockchain solutions to redesign the global healthcare ecosystem. 

HR serves a critical function for the healthcare industry and is an intermediate between employees and one of the most valued aspects of life: their health. According to Bitfortune, 55% of healthcare applications will adopt blockchain platforms for commercial deployment by 2025. Meanwhile, adoption seems to be ramping up with multiple governments around the world announcing plans to invest in blockchain and encourage its implementation. For example, Singapore’s government has announced financial incentives to enterprises for adopting the technology.

Amid an evolving industry, it is imperative HR professionals stay current with how blockchain’s ledger technology is disrupting the healthcare industry. They should especially keep a pulse on the implications blockchain holds for delivering the employee experience with improved healthcare and other benefits.

Use cases: how blockchain can help HR transform in delivering healthcare & benefits
 

While the use of blockchain technology is still more commonly associated with payment functions, its disruption to HR will be profound and pervasive in coming years with many possible use cases across the functions of an HR department.

To prepare for the coming blockchain revolution, HR departments should focus on identifying problem areas and inefficient processes that could be addressed by the transparency, accuracy and speed that blockchain provides. The processes most primed for blockchain disruption are those that are burdensome and expensive with substantial data collection and third-party verification. For this reason, healthcare and benefits could be the ideal match for an HR department looking to adopt blockchain technology.

1.  Enhancing fraud prevention & cybersecurity for sensitive data in HR.

HR teams conduct some of the highest-volume financial transactions for an organization and handle sensitive employee data related to healthcare (as well as, banking, disciplinary records, performance records, expense reimbursement, and more).

Unfortunately, all of the data an HR department maintains is at risk of being exploited and, as more companies face data breaches, it is becoming increasingly important that proper measures are in place to maintain security and prevent fraud.

A company’s cyber risks largely emerge from an underlying lack of transparency and accuracy in its data systems. Because of its capacity for promoting transparency and accuracy, blockchain technology is being lauded as a solution for combating cybersecurity crime and protecting data. While blockchain’s popularity grows among large companies and companies that hold critical, sensitive data (for example, Lockheed Martin is trusting it to secure data), it is also being used by nonprofits to collect donations securely.

It is important to consider that blockchain technology can mitigate both internal fraud and external hacks of sensitive employee records. Access to the blockchain is limited and controlled—even those who have access are not able to modify the records. This limits both internal fraud and external hacks of sensitive employee records.

In the digital age, data is a major asset for a company. Blockchain essentially functions to decentralize data and places it across a large network of computer storage spaces to reduce the risk that a single hacking event could usurp all the data a company has. By using blockchain, HR departments can introduce a solid measure of security against cyber threats to protect their employees’ health information.

2.  Improving health insurance, health records & patient experience with ‘smart contracts.’

Much of blockchain’s power comes in the application of ‘smart contracts’, which many organizations are using to make payments to employees, contractors and vendors. In fact, it is reported that 45% of early adopters of blockchain are already implementing smart contracts within their organizations.

A smart contract codes a set of parameters using statements in ‘if this, then that” (IFTTT) language. These contracts are designed so that, once executed, the entire process is dictated by these codes. It is also made irreversible unless of course terms of a contract need to be updated. While smart contracts have many applications for HR functions in terms of payroll, there are some very important considerations HR departments should be aware of in terms of healthcare.

Smart contracts have the potential to be used for insurance, including how patients buy insurance. Through a smart contract, all details of an insuree’s policy could be stored in a patient profile. This profile would then be stored on the blockchain platform in a safe and secure ledger that is less prone to hacks than the databases currently used. 

Smart contracts could also impact the insurance claim process by eliminating the need for lengthy forms and time lags. If an insuree undergoes a medical procedure covered by the policy, a smart contract would be automatically triggered to transfer money from the insurance company’s account straight to the hospital or medical provider. The automation cuts out delays and hassles, allowing for correct payment of the medical service.

There are also numerous implications for electronic medical records, information and medical data sharing. Storing patient’s electronic health records (EHR) on secured ledgers, for example, would allow a patient to move easily from one hospital to another without having to fill out numerous forms. The blockchain network would safely store their records, allowing their new physician to access them without delay.

While hospitals and healthcare providers currently rely on a number of databases filled with patient data, these can be too centralized and restrictive for sharing potentially life-saving insights around the globe. If health records were to be kept in a smart contract stored on the blockchain, the data analytics would be available to hospitals, providers and research institutions everywhere. With widespread adoption of this healthcare blockchain technology, an individual could essentially walk into any hospital in the world for treatment and, with their private key, their health data would be accessible instantly.

3.  Offering better access to healthcare & other benefits.

Blockchain’s ‘smart contracts’ could also change how employees gain access to healthcare and benefits. Once the employer outlines the terms of employment prior to hiring, HR is charged with upholding the conditions in the contract. These terms include provisions that employees value in their employee experience, such as healthcare insurance, wellness programs or other benefits.

The current model of manually delivering benefits runs risks of errors and could get in the way of properly servicing employees. With blockchain, HR could seamlessly deliver upon these benefits by implementing smart contracts that automate the process. For example, if a company outlines that an employee’s benefits packages begins after a specific waiting period, the smart contract would be written to automate these benefits at the right time and in the right fashion.

Not only does blockchain have the potential to improve security and automation of benefits, it is possible for benefits to be more personalized to each individual employee. In today’s digital world, consumers are accustomed to enjoying personalized experiences and this trend of hyper-personalization is reaching the workplace. Through blockchain’s smart contracts, which could be integrated with artificial intelligence (AI) and IoT technology, companies would be able to empower employees with benefits packages and wellness programs that are tailored specifically for them and their evolving needs. These personalized packages could become a critical tool for enhancing the employee experience.

Challenges HR faces in implementing blockchain to deliver benefits
 

Blockchain is a quickly evolving technology with new applications and trends regularly emerging. Though it is becoming more widely adopted across a variety of industries, it is inevitable that first-time users will run into issues and challenges in implementing it. For HR departments, it is imperative to consider these challenges as they explore which processes might be impacted by blockchain.

1.  Data standardization & integration with legacy systems.

With blockchain being a new technology, protocols and standards for its application are not yet established. When the internet began to commercialize, it initially struggled without proper protocols. But over time, controls were implemented to allow for browser compatibility, cross-platform multimedia and better interconnectivity between servers. As more sectors adopt blockchain—especially healthcare which handles sensitive and personal data—ensuring that blockchains offer an industry-wide benefit will require widespread collaboration and standardization. For example, it will have to be determined when private, as opposed to public, if blockchains make sense. Otherwise, this could impact the security and functionality of blockchain technology.

All industries will have to get over a major hurdle when it comes to integrating blockchain solutions with legacy systems—or replacing legacy systems altogether. But the hurdle is especially high for HR and healthcare, which are often bound to specific legal regulations and already have very specific HR or healthcare systems in place that incorporate these parameters. Synching these systems or replacing them with blockchain technology could prove to be difficult.

2.  Adoption & incentives for participation.

Despite enthusiasm and a strong record of success, blockchain adoption has proven to be difficult for companies. Greenwich Associates surveyed companies that have implemented blockchain and 57% reported its integration has been harder than expected. In terms of scalability, 42% of respondents reported it as a major issue, 39% said it is a minor issue and 19% said it is no issue at all.

Much of the challenges are culture or people-related, rather than technical. For example, most people resist change and, if they do tolerate it, they generally prefer it to happen gradually and incrementally. The oppositions to change could be even more pronounced for those in HR, especially with employees across an organization resisting how healthcare and employee benefits—which are very personal—is administered. Some of the proposed uses for blockchain would result in systemic changes that rapidly transform the entire system.

Even if employees and management are open to change, HR still has work cut out in hiring, education and training. Blockchain will require companies to hire more research and analytical staff as well as offer training on how to properly implement it. But this is where HR thrives. By helping to cultivate a culture of digital transformation, HR departments can also guide companies on their blockchain journey.

3.  High costs of developing & operating blockchain technology.

The adoption of blockchain technology is likely to offer long-term benefits in regard to productivity, efficiency, timeliness, and reduced costs. However, one of the greatest obstacles to widespread adoption of blockchain is the high cost to initially install it. The software required to implement blockchain within an organization must typically be developed specifically for each individual company. This makes it expensive to obtain, whether hiring in-house or buying from a developer. Moreover, even after the blockchain software is developed, the company would also have to purchase specialized hardware to be used with it. 

In addition to the software development costs, companies must also find qualified personnel to operate the technology.  The blockchain space is new and growing so rapidly that the demand for professionals in the field outweighs the supply. This makes hiring qualified blockchain experts—either in-house or as consultants—quite costly.

Currently, it appears that the world’s largest corporations are the only ones benefiting from blockchain because they have the money, resources and data to spare. Furthermore, the technology itself seems too new and not yet fully understood for SMEs to adopt in droves.

However, this is all likely to change over time. The commercialization of the internet was gradual and in the early days it required companies who wanted to go online to put up a substantial amount of money upfront and invest in customized solutions. Eventually, as blockchain becomes more mainstream, it will also become much less expensive, more streamlined and more accessible to companies.

Blockchain is already demonstrating its potential to disrupt business as we know it. Because the HR department guards and manages large amounts of sensitive data that are critical to employees’ lives and how a company operates, it is likely that blockchain technology will be infused directly into the HR function to add transparency and trust to various processes.

Healthcare and benefits administration is one of the processes that blockchain technology is likely to directly transform. Though there are challenges in cost, scalability and perception to overcome, HR departments could potentially use blockchain technology to provide employees with greater access to more personalized benefits packages. Furthermore, as time is freed up by automated processing, HR departments will be able to turn their efforts to more value-adding activities such as building employee engagement and experience.

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"Saudi Arabia's 'Vision 2030': Will It Save Or Sink the Middle East?" E-International Relations, 10 Jul. 2018, https://www.e-ir.info/2018/07/10/saudi-arabias-vision-2030-will-it-save-or-sink-the-middle-east/. 5. "Saudi Arabia Vision — Goals and Objectives." GO-Gulf, 14 Jul. 2016,https://www.go-gulf.com/blog/saudi-arabia-vision-2030/.

Varun Khosla | 03 Oct 2019

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Sources: 1 China Academy of Information and Communications Technology (CAICT) under the Ministry of Industry and Information Technology (MIIT), Xinhua News, December 23, 2018,http://www.xinhuanet.com/english/2018-12/23/c_137693489.htm. 2 Heimburg, Fabian von, "Here are 3 lessons Europe can learn from China's flourishing start-ups," World Economic Forum, September 15, 2018,https://www.weforum.org/agenda/2018/09/3-lessons-europe-can-learn-from-china-flourishing-start-up-ecosystem/. 3 World Payments Report 2018," Capgemini and BNP Paribas Services, https://worldpaymentsreport.com/non-cash-payments-volume/. 4 State Council of China, "Made in China 2025," IoT One, July 7, 2015,http://www.cittadellascienza.it/cina/wp-content/uploads/2017/02/IoT-ONE-Made-in-China-2025.pdf. 5 The Made in China 2025 Initiative: Economic Implications for the United States," Congressional Research Service, August 29, 2018,The Made in China 2025 Initiative: Economic Implications for the United States," Congressional Research Service, August 29, 2018,https://fas.org/sgp/crs/row/IF10964.pdf. 6Gross domestic spending on R&D," Organization for Economic Co-operation and Development (OCED), accessed on April 1, 2019,https://data.oecd.org/rd/gross-domestic-spending-on-r-d.htm.https://data.oecd.org/rd/gross-domestic-spending-on-r-d.htm. 7CAICT under MIIT, "China's digital economy surges 18.9%, drives growth," China Daily, July 20, 2017,http://www.chinadaily.com.cn/business/2017-07/20/content_30179729.htm. 8Wenway, Winston Ma, "China's mobile economy, explained," World Economic Forum, June 26, 2017,https://www.weforum.org/agenda/2017/06/china-mobile-economy-explained. 9Digital Transformation Strategies: How are They Changing?" Jabil,https://www.jabil.com/insights/blog-main/how-are-digital-transformation-strategies-changing.html.

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Juliane Gruethner | 31 Oct 2019

International project assignments are one of the current hot topics in global mobility management. A quick poll in conjunction with our Expatriate Management Conference in 2018 showed that, in an increasing number of organizations, the mobility function is responsible for the administration of international project assignments. Nearly 90% of the responding mobility managers confirmed that their organizations have international project assignments, and 80% of respondents are responsible for their administration. With this trend, new challenges are emerging. Let's take a look. Challenge 1: Common Understanding of Terminology   There does not seem to be a common definition of an international project assignment. Mercer's poll showed that about 40% of the responding businesses define an international project assignment as simply an international assignment to a project, regardless of its duration, while 60% specified a period of time. 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This transparency leads to higher cost pressure, which calls for a greater flexibility with respect to the applicability of existing internal rules and regulations to be able to offer projects at a competitive price. In conclusion, the short-term business value (winning and conducting the project in a profitable manner) and the mid- to long-term value of international assignments (for example, filling a skills gap in the host location or employee development) have to be balanced diligently, which can be achieved by a thoroughly segmented international assignment policy. Challenge 4: Management of Large Numbers of International Project Assignments   Depending on the industry sector, the number of international project assignments in an organization can be extremely high. One of the respondents in the conference poll indicated that they handle about 23,000 international project assignments per year. Therefore, the resources needed in the mobility function will have to be increased or resources reallocated once mobility takes over the responsibility for international project assignments. You should also review the service delivery model, as well as individual procedures, and if necessary, adapt them to enhance the efficiency and effectiveness of the international project assignment administration. Using the right technology can also help streamline processes and make a large number of international project assignments manageable. Challenge 5: Deployment to Unknown Places   International project assignments take place not only in the company's regular assignment destinations but also in new locations at client sites. The company, therefore, may not have any resources in or knowledge about the location. Client resources or external vendors can be used to obtain necessary information or perform necessary services, such as immigration or payroll. In addition, if employees perform services in hardship locations, their safety and security need to be considered. Challenge 6: A Matter of Compliance   When it comes to international project assignments, mobility is regularly asked to deliver results even faster than for traditional international assignments, because requirements tend to come up or change at short notice. However, compliance is as complex as for any other international assignments and needs to be evaluated individually. This is true for external as well as internal compliance issues. Although compliance is regarded as one of the most important aspects by many mobility managers, we have seen that compliance is just the tip of the iceberg, and the list of challenges presented in this first part of the article is not exhaustive. We continue our considerations with the companies' duty of care and possible solutions in part 2  of this article. If you'd like to learn more, click here to get in touch with a Mercer consultant.

Alice Harkness | 31 Oct 2019

Benefits have traditionally been provided on a "one-size-fits-all" model, meaning some employees gain greater value than others. Today, employees increasingly expect more personalized benefits that allow them to flex and utilize benefits depending on their particular needs and life stage. This allows employees to feel they are being treated equally, independent of circumstances (i.e., single or married). It's time to break the mold with a "non-traditional" approach that may include well-being incentives, opt-in/out insurance coverage and a design that allows individuals to claim parents' expenses or pet care expenses. Forward-thinking companies are on this journey already, but many aren't, as HR departments overestimate employee's satisfaction with the status quo. Why? They're afraid to ask. The risk of not asking can result in investing valuable budget on unused or underutilized benefits. Get to Know Your Employees Better   Don't be afraid to ask the tough questions. Gather feedback through engagement "spot" surveys or focus groups on what employees like and dislike in current offerings or what else would be beneficial. While it may be impossible to implement everything, it's a great opportunity to engage. Employees may not know what they need. Use data analytics to better understand what types of benefits (especially health) are being used the most and what's essential. Are people reporting that they want more well-being incentives, yet no one is taking advantage of your discounted gym membership offering? By combining qualitative and quantitative data, you can identify gaps. Sometimes, that gap is not on the offer itself but rather the communication around it. Communication Is Key   We often hear from HR, "Our employees have good knowledge of their benefits; we communicate them every year." This is not enough. Effective communication is key. Employees are time-poor with little patience for reviewing the fine print of policies. Why not get feedback on their preferred channels of communication? Find simple ways to communicate regularly, focusing on different benefit offerings. This can include infographics, interactive landing pages, videos or simply shorter, bite-sized information. Don't forget to tell employees why certain benefits are important — they don't always know! Flexible Doesn't Always Equate to $$$   Providing personalized benefits can be costly, but it doesn't have to be. It's about taking your current budget and creatively investing in employees in a way that resonates. Another benefit is confidence in knowing your investment is being used. Companies who invest the time in designing benefits that resonate with employees — throwing out the traditional approach by embracing new ways of more personalized thinking — will see a greater return on investment and a happier, more engaged workforce.

Wejdan Alosaimi | 17 Oct 2019

For many decades, Saudi Arabia — as a nation, culture and economic force — has been inextricably tied to oil exports and the energy industry. However, a bold new vision, named Saudi Vision 2030, aims to wean the country off its dependencies on fossil fuels through the creation of sweeping new reforms and policies. This vision looks to modernize Saudi Arabia, both as a domestic society and a global financial powerhouse. The Power of Embracing Change   In 2016, Crown Prince Mohammad bin Salman bin Abdulaziz Al-Saud led the unveiling of the Saudi Vision 2030 initiative, which detailed the nation's unprecedented and extraordinary commitment to emerge as a leader in a rapidly evolving world. As oil prices continue to react to new economic realities and regional political forces shape the roles and objectives of nations throughout the Middle East, Saudi Arabia's decision to proactively embrace change could have extraordinary foreign and domestic ramifications. With a population of more than 33.4 million people and a median age of 25, Saudi Arabia faces a future filled with significant challenges and opportunities.1 Saudi Vision 2030 is a road map for how the nation will empower its millions of young citizens to work and thrive in a globalized world that increasingly views petroleum as an outdated and harmful source of energy. A shift in long-established revenue resources and economic paradigms requires a fundamental shift in local workforce skill sets and proficiencies with modern technologies. As other nations are slow to adjust to climate change and other geo-economic shifts, Saudi Arabia is poised to exemplify to the rest of the world how governments can leverage policy reform to enhance the lives of people both inside and outside the country's borders.2 Accommodating a Complex Global Economy   Saudi Vision 2030 will have a profound impact on rapidly growing economies, such as India, that seek to leverage digital transformation while implementing innovative domestic and workforce policies. In fact, the fate of Saudi Arabia and India are becoming increasingly intertwined, as India — unlike many western economies — requires more oil to empower its robust economic rise. Industrialized markets, in areas such as Europe and the United States, are seeking greener alternatives and more electric vehicles for transportation demands, but India remains heavily dependent on fossil fuels. By 2040, India will need to process up to 10 million barrels of crude oil every day to support its expanding economy and progressively urbanized populations.3 Saudi Arabia, a nation that already has a few notable government policies elevating the standard of living for its citizens (such as offering free college education to all citizens), is further internationalizing its economy by prioritizing privatization. The 2030 plan encourages financial institutions to promote private sector growth, marking a significant development in how the country is aligning its domestic workforces to compete in a globalized economy. The focus on increasing privatization and other non-oil industries — such as construction, finance, healthcare, retail and religious tourism — will create new opportunities for Saudi businesses and entrepreneurs.4 Creating a Future Through Indigenous Resources   Saudi Vision 2030 addresses many of the local, cultural challenges facing the nation, such as the role of women in the workforce and society, the impact of digital transformation and automation, and the need to modernize the sensibilities of Saudi businesses. Allowing women to drive and granting them greater access to economic prosperity — with the goal of increasing women's participation in the workforce from 22% to 30% — has generated positive responses with global investors. The 2030 plan also prioritizes domestic issues and the overall health of its citizens, with the stated objective of raising the average life expectancy from 74 to 80 years and aggressively promoting daily exercise and healthier lifestyles for all Saudi citizens.5 The Saudi government also seeks to bring its society into the digital age by implementing more e-government services that will connect citizens to resources through smartphones, data-centric operations and other technologies. This push will also drive human capital out of government jobs and into the private sector. According to the Mercer Global Talent Trends 2019 report, companies in countries such as India, Brazil, and Japan will experience a 70% increase in automation, boosting their need — like Saudi Arabia — to find new roles and professional development opportunities for workers. The 2030 plan offers an ambitious vision for the nation's indigenous resources. Empowering women and integrating modern technologies throughout its economy and government are just part of this comprehensive strategy. By inviting the global economy to invest in its progressive financial mechanisms and bolster tourism through campaigns highlighting the nation's history, Saudi Arabia is poised to lead its people, and the world, into a future forever defined by a new, modern view of the future. Will it work? The world will know in 2030. Sources: 1. Kingdom of Saudi Arabia. "Saudi Census: The Total Population." General Authority for Statistics, Accessed 11 July 2019,https://www.stats.gov.sa/en/node. 2. Mohammed bin Salman bin Abdulaziz Al-Saud. "Vision 2030." Vision 2030, 9 May. 2019, https://vision2030.gov.sa/en. 3. Critchlow, Andrew. "India is too important for oil titan Saudi to ignore." S&P Global Platts, 6 Mar. 2019, https://blogs.platts.com/2019/03/06/india-important-oil-saudi/. 4. Nuruzzaman, Mohammed. "Saudi Arabia's 'Vision 2030': Will It Save Or Sink the Middle East?" E-International Relations, 10 Jul. 2018, https://www.e-ir.info/2018/07/10/saudi-arabias-vision-2030-will-it-save-or-sink-the-middle-east/. 5. "Saudi Arabia Vision — Goals and Objectives." GO-Gulf, 14 Jul. 2016,https://www.go-gulf.com/blog/saudi-arabia-vision-2030/.

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