Applications and Use Cases

Blockchain Advances Patient Care Through Proper Materials Management

February 13, 2020

Blockchain technology has come to healthcare. In an interesting presentation at the Blockchain Event, part of the ITEXPO in Fort Lauderdale, FL, on Feb. 12, Dr. Daniel Engelman described how blockchain technology can help hospitals maintain proper inventory.

The presentation, “How Healthcare Might Be the Next Biggest Blockchain Disruptor,” described a method for improving the availability of properly sized heart valves on surgery day. “Really, this is about the patient,” Englemansays.

Engleman, the co-founder andvice chairman at HealthChain, is a cardiac surgeon by trade. Healthchain deploys blockchain technology to track surgical equipment so that proper inventory levels can be maintained. The goal is to make sure the devices are onsite when the doctor needs them.

“The deal is, you have to have lots of equipment, lots of devices, when you do heart surgery,” he says. The current state of just-in-time delivery for medical devices leaves much to be desired, he says. Oftentimes, he says he has to go to his backup device because his first choice isn’t available due to poor inventory controls.

“It happens at the best hospitals every day,” he says. Since devices he uses can cost up to $40,000 each, hospitals often stock the parts on consignment from device companies. Result: Low par levels that helps control costs but also end up reducing availability.

Fragmentation is a big problem. Each hospital re-stocks differently. Data is siloed, and there’s no trust in the data. Using blockchain to track inventory reduces inefficiencies and repairs misaligned incentives that have developed between hospitals and suppliers, Engleman says.

The reorder process now requires nurses to notify materials management at the hospital. Then hospital materials management communicates with enterprise materials management, which relays the order to the device manufacturer.

One blockchain ledger allows each part of the distribution chain to be alerted at the same time. When the part is delivered, updates to the ledger are similarly distributed. Alerts are established at par level, to automatically prompt the system to resupply itself, Engleman says.

“We’re talking about supply chain management using blockchain,” Engleman says.

The next step is to incorporate invoicing and payment into the system. Once implemented, blockchain technology should allow for immediate payment because of the visibility inherent in the ledger. Right now, hospitals pay in three or four months.

Utilization triggers a smart contract that produces the product order, tracking document, shipping confirmation, invoice, shipping tracker and receipt tracker. All those components are visible in the ledger.

Edited by Maurice Nagle



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