The healthcare system is in dire straits. How can Web3 repair the broken healthcare insurance system in the United States?

Cracks in the system appear, doubts arise about National Health Insurance

The intertwining of US federal healthcare, private insurance plans, and high medical expenses has long posed a contradiction of high costs and low efficiency in the US healthcare system. Recently, the unfortunate death of UnitedHealthcare CEO Brian Thompson has brought attention to the role insurance companies play in medical services. According to The Washington Post, Thompson admitted that many Americans see insurers as obstacles, criticizing their stringent prior authorization and denial policies that affect patients' right to necessary treatment. This controversy once again reflects the stubbornness of the US healthcare system: excessive bureaucracy and entanglement with commercial interests not only stifle price competition but also make it difficult for patients to find a balance between insurance claims and treatment.

At the same time, the huge market size further highlights the root of the problem. The estimated output value of the US health insurance industry this year is expected to reach $1.4 trillion. Giants such as UnitedHealth Group, CVS Health, Anthem, and Humana monopolize nearly 70% of the market share, which severely limits the potential changes that can be brought about by policy adjustments and the market. After the pandemic, the demand for healthcare and costs continue to rise, making people more aware that reform within the traditional financial system alone may fall short.

Web3 and Cryptography: Breaking Cost and Accessibility Bottlenecks?

As blockchain and cryptocurrencies mature, the emerging Web3 thinking is being seen as a potential way to reshape the healthcare and insurance industry. Similar to the concept of decentralization and self-service in banking for Bitcoin, if it can be promoted in healthcare payment and data management industries, it may bring another option to the current multi-tier intermediary-based healthcare model in the United States, which is mainly dominated by insurance companies, institutions, and government subsidies. For example, through the immutability and public transparency of blockchain transactions, it can reduce the huge administrative costs in policy review and payment processes, and also automate cost settlement through smart contracts, reducing the space for erroneous claims and disputes.

At the same time, DeFi (decentralized finance) solutions derived from Web3 and the cryptocurrency market provide patients and medical institutions with more flexible financing options, such as microloans and cross-border payments, reducing delays in treatment due to insurance approval. For populations lacking complete credit records or financial channels (similar to 'unbanked individuals'), decentralized lending platforms can also help them raise funds for treatment or purchase supplemental insurance. This 'redefining healthcare payments' model allows for a balance between cost and accessibility among a wider range of users.

Data Sharing and Incentives: Reshaping the Medical Experience

In addition to payments and insurance, Web3 also has significant potential in medical data management. In traditional medical systems, personal medical records are often scattered across multiple hospitals or insurance companies, greatly increasing the risk of repeated examinations and misdiagnosis. If a decentralized medical record platform is established through blockchain, patients can control their complete medical records through private keys, and when authorized by doctors or research institutions, information can be obtained faster and more accurately.

At the same time, in order to encourage patients to contribute data for pharmaceuticals, AI analysis, or public health research, Web3 also provides an incentive model to reward individuals with encrypted tokens, shaping a new ecosystem of 'patient-research-insurance' network.

On another level, in response to complaints about "expensive premiums and lengthy review processes", blockchain insurance platforms can also use smart contracts to automatically execute approval processes and record them on the chain in an unchangeable manner, to avoid insurance companies unreasonably making things difficult or misleading. What's more important is that if data can be processed in a standardized format, insurance billing becomes more scientifically transparent, and conflicts of interest between medical institutions and insurance companies can also be reduced.

Image source: iThome Taiwan actually began developing the 'insurance technology application sharing platform' as early as 2019; creating the largest-scale financial blockchain 'claim/preservation alliance chain' in Taiwan through the 'alliance chain'.

Regarding the above content, Taiwan actually started developing the 'Insurance Technology Application Sharing Platform' as early as 2019; through the 'Alliance Chain' method, it has created the largest financial blockchain 'Claims/Policyholder Alliance Chain' in Taiwan, which has now become the most important application for multiple insurance companies, hospitals, and hundreds of thousands of policyholders. It will also launch 'Claims Alliance Chain 2.0' in 2023, continuously optimizing and providing more diverse financial services.

Image source: Global Life Claims Alliance Chain 2.0 Operation Instructions

Policy Challenges and Future Possibilities

Of course, there are still challenges such as regulatory compliance and market customs if we want to see Web3 and cryptocurrencies being widely adopted in the US healthcare system. High compliance costs, data privacy issues, and currency volatility risks are all current challenges. However, the market demand for reform and the open acceptance of insurance and payment methods by the younger generation are driving various forces to try to break through. More and more startups and research institutions have also entered this industry, actively exploring decentralized data sharing platforms and establishing health reward mechanisms using encrypted tokens, among other initiatives.

In fact, the sighs or anger caused by the death of the former UnitedHealthcare president in society highlights people's dissatisfaction with the cumbersome and inefficient US healthcare system. If the payment and management mode can be reconstructed through blockchain and encryption technology, it may help alleviate the dilemma of US healthcare reform. This does not mean that encryption can repair the entire structure overnight, but at least it provides a direction of "more cost-saving and user-friendly experience". If all sectors, from the government to the private sector, are willing to try this innovation, perhaps we can truly get rid of the existing impression of "insurance companies as obstacles" and move towards a new era of patient-centered healthcare.

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[Disclaimer] The market is risky, and investment should be cautious. This article does not constitute investment advice. Users should consider whether any opinion, viewpoint or conclusion expressed in this article is appropriate for their particular circumstances. Investment is at your own risk.

The healthcare system is in a difficult situation. How does Web3 repair the broken healthcare insurance system in the United States? This article was first published in 'Crypto City'.