Blockchain has been one of the most talked about technologies of 2017, with some even calling it the most revolutionary technology since the widespread use of the Internet.
How will blockchain technology affect the insurance group benefits coordination process?
Over the course of a 5-week sprint, Cookhouse Lab's blockchain & group benefit coordination project team went on a mission to find out. Using the lab's design-thinking methodology, the team identified key customer and business pain points within the current coordination of benefits journey, developed a future state blockchain-based process, and created a set of wireframes for the MVP. Finally, they were able to leverage resources from the project's build partner, msg global, to build a final MVP based on their wireframes and processes.
The proposed blockchain & group benefit coordination MVP
The team's MVP enables policy holders, covered by multiple insurance companies, to submit an extended healthcare claim (eg, vision, physio, massage) once to their primary provider. The claim will be adjudicated by the primary provider, then passed on via a blockchain to the secondary provider, who will adjudicate the claim for the remainder of the balance.
Technology used to build the MVP
This MVP was built with Hyperledger Fabric and hosted on Amazon Web Services (AWS). The former, is a blockchain framework implementation that was originally contributed by Digital Asset and IBM. This framework allows for various components, including consensus and membership services to be plug-and-play. The latter, is a secure cloud computing service which provides the necessary database storage.
How will this blockchain MVP benefit group benefit coordination?
Although the benefits of this solution are primarily customer focused, insurers will also undoubtedly gain from this technology. Here are two of the major ways in which this MVP will improve the group benefit process:
- Time efficiency: Policy holders would no longer need to submit claims multiple times when covered by multiple providers, which will enable policy holders to more easily receive the compensation they are entitled to.
- Cost efficiency: Secondary insurers would benefit too. By receiving claims directly from the primary insurer, they can place more trust in the claim information, and avoid the resource cost of reaching back to the customer for further details.
What are the limitations of blockchain?
While building an MVP for blockchain in a 5 week sprint is a huge accomplishment, it is still important to be aware of its limitations. This technology is still in its infancy, which means that development protocols are still being established and roadblocks are found often. Another factor to seriously consider is the associated costs with running this technology.
A current example of how inefficient and costly this technology can be is the public blockchain Bitcoin. As miners compete to earn Bitcoins, they increase their computing power, therefore driving up the environmental cost of completing a transaction. It was estimated in March 2017, that each Bitcoin transaction uses the same amount of electricity required to power 0.89 average American households per day. This is obviously unsustainable from a corporate perspective, so it needs to be taken into consideration when developing future blockchain solutions.
What’s next for blockchain technology?
While blockchain does have limitations, we can be optimistic in assuming the above issues will be rectified in due time. As the technology increases in sophistication, and as new consensus protocols are developed and implemented, blockchain will continue to become a more viable and efficient solution.
Ultimately, what it comes down to is that this technology offers a fantastic solution for transactions that take place across multiple parties. For this reason, and those detailed in the diagram below, blockchain lends itself well to solving the Coordination of Group Benefits use case.
Next steps for the Blockchain & Group Benefits Coordination MVP
Whenever a project comes to completion in Cookhouse Lab, organizations involved in the project assess the MVP internally before deciding on next steps. For this project, organizations will meet again in early 2018 to determine next steps.
Want to get involved with blockchain?
We want to thank our participating members The Co-operators, Great West Life, Manulife and Sunlife on bringing their innovative minds together for this project! If your organization is interested in joining this group of innovators for the next steps for this project, please contact us at firstname.lastname@example.org.