Nitin Gaur IBM and Francisco Curbera IBM on ‘Design Principles of a Blockchain Network’ at Converge2Xcelerate Conference | Traders Network Show – Boston, MA

Contributed by: Show Editorial Team

Nitin Gaur, Director of IBM WW Digital Asset Lab and Francisco Curbera, Director of Blockchain & Consumer Health Development for IBM Watson on the Design Principles of Blockchain Network Panel at Converge2Xcelerate Conference (Boston, MA)

HIGHLIGHTS

  • Blockchain in healthcare market expected to reach $1.7billion by 2026
  • IBM brings in annual revenue over $79.8 billion
  • IBM has experts working on more than 500 IBM blockchain projects

FULL COVERAGE

INTERVIEW TRANSCRIPTS: Nitin Gaur, Director of IBM WW Digital Asset Lab and Francisco Curbera, Director of Blockchain & Consumer Health Development for IBM Watson

Nitin Gaur – Director, IBM WW Digital Asset Lab: 00:00

So I’ll take it off. How many of you know what blockchain is? So if you raise your hand on brass of questions, it’d be prepared. So this is a sum total of at least our collective work together. I am Nitin Gaur, so director of digital asset lab at IBM founded fortune labs at IBM. So I’ve been doing this since 2013 so the gray hair that I have is because of blockchain. And so connect to me, this is inspiration. Real world use cases. So we spent a lot of time experimenting. You’re going a lot of time with your clients. I personally be my Google team. Plus different client engagements and very small percentage of that has translated into moving from a POC production phase. So this is some of the learning part of the healthcare only because it’s a healthcare conference. Some doors love that experience tying that into a healthcare space. So Francisco, I’ll let him introduce himself.

Francisco Curbera – Director, Blockchain & Consumer Health Development, IBM Watson Health: 01:04

For healthcare solutions based on blockchain, we’re looking at also solution seven platforms and extension needed to support healthcare on the blockchain.

Nitin Gaur – Director, IBM WW Digital Asset Lab: 01:18

So he’s a healthcare guy I’m the tech guy and I think Mr. Curbera or the MIT professor just right at the after work together. So we try to bring the document together, we bring our technology teams, we bring the industry teams to be bringing the folks who get together to form a solution. So let’s start the solution deployed detailed sums of what we as a company have done over time. But there are a few things that I do want to talk about. Just one slide.

Nitin Gaur – Director, IBM WW Digital Asset Lab: 01:48

Thank you. There’s one slide I would like you to take from this presentation is this slide. I think oftentimes, and the reason why formed IBM visual asset labs was majority of the work that we were doing were around data and we were trying to solve data problems and I had to then take a step back after almost three and a half years with the work and look into solving the issue of you have to have the notion of digital assets if you’re dealing with blockchain. So what does blockchain do for us? If I had to distill down all the work that we’ve done is two things we are starting to solve for time and trust. And I think that will manifest itself in many of the examples that they’re going to give you today in terms of our work. But the idea there is the time has these two constructs have enormous implication and regulation has enormous implication in terms of the cost to the industry.

Nitin Gaur – Director, IBM WW Digital Asset Lab: 02:36

Because you know you have many parties involved. Each party have their own business process. Whether you look at camps, claims processing, or even clinical trials for example, you have all these intermediaries who are processing some information, some data coupled that with industry specified regulation. And you have a entire gamut of nightmare and cost that goes with it, right? So time and trust is something that blockchain aims to, which leads to using technology. So blockchain is a technology itself is interesting to people like us who are in technology, but by itself it doesn’t do a whole lot. Right? So it manifests itself in some of these sort of model where it’s truly a trusted digital transaction platform. It’s a platinum you cocreation, it’s a platform for multiparty trust networks, disintermediation networks and so on and so forth. But if you were to take the use cases that is manifested on a blockchain as a technology elements, you’ll realize that all imply that you have multiple parties working together.

Nitin Gaur – Director, IBM WW Digital Asset Lab: 03:38

In many cases, we’ll talk about ecosystem, we talk about minimum viable ecosystem, we talk about networks, we talk about having a set of parties that are needed for the networks to sort of form. And eventually the network grows itself. And that’s the thesis. And that’s the hope of these Bochum promise to be delivered. So in many cases you’ll find that these ecosystems are very specific to our industry and especially in cases of regulated industries. We will talk about the problems that an ensues elements such as data sharing, which of course, you know it’s a big problem in a regulated industries like healthcare, financial services, talking about maintaining privacy, talking about identity. So all these things manifest themselves to be a technical challenge. But the promise of blockchain network itself is immense in terms of solving a collective network-based problem. So I’ll take a pause here, give it back to Parco R Francisco. He will talk about some of the industry imperatives and then we’ll give it back to me in terms of how it’s done. So I’m not just going to talk about the future and possibilities. I’ll give you an example of what we have done to achieve some of these theories.

Francisco Curbera – Director, Blockchain & Consumer Health Development, IBM Watson Health: 04:42

So why bought in for healthcare and if you look at their surveys that have been done over the last few years across a different type of different industries, top executives to try to assess the value, anticipate the value that blockchain technology can bring to the industry. You see at the top reliably financial services. Of course. Number two is healthcare and there’s a reason for that, right? Healthcare as admitted was it was saying, eh, in many industry you have processes, they build multiple parties. How care is particularly fragmented. It’s a very complex ecosystem. You’ve seen multiple parties, even in the simplest transactions, you have many parties from the payers, the providers, manufacturers, patient organizations, and these are, these organizations work together. So they’re business partners. The social is somewhat other surreal relationship and among many of them for many reasons.

Francisco Curbera – Director, Blockchain & Consumer Health Development, IBM Watson Health: 05:42

And there’s a situation in which you have an opportunity to simplify the business process, share data, and create the layer of trust. There’s going to make things that they are very complex, cumbersome, faster, easier, more effective, and eventually enabled of the industry. So that is the expectation. And you probably heard that there’s a lot of, if you follow a little bit the blockchain for healthcare saga, there’s almost consensus that there are many use cases, many situations, many processes that we run today that could be dramatically simplified and improved with, with blockchain. And that could lead to fundamental change, right? These are some of the ones that people, eh, people already mentioned in there. There are several others. Many of them have a common underlying issue of what’s the data that we share, how we share transactions, right? And let me just mention for example, the question of a healthcare data sharing.

Francisco Curbera – Director, Blockchain & Consumer Health Development, IBM Watson Health: 06:34

We’ll be here about this this morning, right? The ability of having a trusted repository where consent provenance, chain of custody of all healthcare information as provider can be will be transformational, right? We can lead us to integrated health records data going efficiently where it should be used, who it’s going to be more effective and provide our onboarding. I mean some of you have you come from a, from plans health clients provided data is a big pain point. The lack of quality that distributed responsibility or updating the lack of incentive to do this perfect use case again for blockchain, for delivering incentives, managing quality of the information, sharing quality information, right. I’m going to be talking about this. The one on the top left, the alternative payment models as a one example is one in which we’ve done a lot of work and it’s a situation which both you see almost the low hanging fruit in.

Francisco Curbera – Director, Blockchain & Consumer Health Development, IBM Watson Health: 07:29

So immediate value that blockchain can bring and also the its ability to drive transformation in the industry. Right. So, let me just talk briefly about one of these alternative payment models. Bundled payments, right. You may be familiar with this is a program has been pushed from the government since a few years ago. Commercial insurance is trying to get onto this and the idea is set a fixed price for a type of a care episode, right? And make essentially shift responsibility towards the providers to deliver quality care as at a fixed point. And this rewards it become below. They can share the savings. They also share the risk, right? So the interesting thing is that it is a very simple program from that point of view is hard to manage from many different perspectives among them because there are many parties involved. There’s a payer, this are typically a convener, our coordinator entity, multiple providers that evolve and they all have a risk and an opportunity also to share the savings.

Francisco Curbera – Director, Blockchain & Consumer Health Development, IBM Watson Health: 08:31

So what are the problems we’ve seen this program had been out there for a few years already and some of the problems do we hear about these? First of all, this institution had problem managing their risk for that. They need visibility on data they can trust. They’re given an accurate perspective of where they are, what they up to. Are they going to lose money, make money? Are they managing the patients correctly? Right? There’s of course no of trust. For example, how we settle this contract. So the payer will tell you, this is what you owe me. The providers say, no, this is what I owe you. We hire an auditor. You know, there’s a question of the truth, responsibility and not single sentence. A single point of trust, right? And this makes us expensive, slow, inefficient. So the whole set of issues, right? Related to transparency and trust mostly, which is why it makes these very, very appropriate for a blockchain solution.

Francisco Curbera – Director, Blockchain & Consumer Health Development, IBM Watson Health: 09:24

This is how we approaching this. There’s always an initiative that we’re jointly building the solution like this with, between IBM and PNC bank and the DA’s use the blockchain as the central repository of trusted information and business logic, right? So essentially all services are rendered to any patient under one of these contracts are reflected and validated into the ledger, right? So that everybody agrees what services that are relevant has been provided, what has been paid. And then at the end of the cycle, we can do a reconciliation based on a set of business rules, smart contracts that everybody agrees upon, they’re trusted. And this allows us to do essentially immediate real time reconciliation of those this contracts as opposed to today where we know that this care episodes take six to 18 months to settle. So just from the timing point of view, there’s a huge gain for everybody.

Francisco Curbera – Director, Blockchain & Consumer Health Development, IBM Watson Health: 10:27

What makes this possible? The trust, the fact that all parties trust the data practice towards the, the rules that are going to be used to settle the contracts. Right? And what do we get in a typical situation? For example, a knee replacement is a very typical episode of care covered by these contracts. So you have preoperative care, there’s the inpatient is surgical, they stay in the hospital and then they post discharge, post acute or rehab, etc. Multiple parties involve different institutions. Today what we see manual reconciliation of the episodes, and this is not just because of lack of automation because of lack of trust as I was saying before, right? By moving to an automated trusted reconciliation with the kind of real time reconciliation on payment. This single view of where things are, all the information that is relevant, all the care has been provided and we know full provenance, what that information comes and how it has been validated so everybody knows that what they’re looking at is the real picture that is going to matter when the contract is executed.

Francisco Curbera – Director, Blockchain & Consumer Health Development, IBM Watson Health: 11:38

Right. All this other decisions, care decisions, payment decisions, contract settlement, our recording truck, full provenance, full transparency for all day, all the parties and this is essentially a summary of the value of get by applying blockchain or a situation like this. The real impact on the industry is that instruments like these are very valuable in which everybody can gain patients. Provider, a payers can become much easier to adopt because you lower all these barriers that make today this program is expensive, slow, somewhat undesirable for providers and others, right? You just make volume-based care is something that is affordable and can be deployed on effective manner. So there was an example I wanted to highlight. As I said before, there’s lots of use cases in healthcare and this is one that shows very well they opportunities of applying blockchain here.

Nitin Gaur – Director, IBM WW Digital Asset Lab: 12:34

I have questions for you all in the spirit of keeping the participation. So if you look at the healthcare, I’d let me and I got involved about four and a half, five years back, we were discussing EMR. EHR is really hard use cases and touch for obvious reasons, right? Complex ecosystems. The focus suddenly shifted from healthcare information to healthcare delivery. And there were two different things that the industry is gapping with and the cost. So we went back and looked into the original intent or ACA or AKA Obamacare, which is all of our healthcare information sharing, leading to solving, solve the core industrial molds that are costing that healthcare delivery. But the question you should be asking is to us is, you know, we dealt with this, we have a number of workshops, we had a bunch of POC with the various ecosystem players. We settled on spare pay network. Why does anybody want to guess? So yeah, if you want to guess why we chose this? And I’m just making you guys, because I disengaged out. Some time ago I was focusing on financial services, but I have an idea, I think why we focused on this.

Nitin Gaur – Director, IBM WW Digital Asset Lab: 13:44

So this notion of going back to healthcare network, right? Then our end number of the patient consent management, which deals with treating healthcare record as an asset. So if I’m a patient healthcare record is today, if you were to move from, from let’s say Massachusetts to Chicago and you go meet a doctor there and you have a new life, you have to redo all these tests unless you are willing to carry in some form or fashion your healthcare records. And that was again, some of the core elements of what Obamacare was trying to solve back in the day. But that’s a challenge. I have really no control over my healthcare record. I visit a doctor, I visit hospitals. They all have different healthcare information provider from Cerner to Epic to few others to being the largest. So the idea was if I could have a healthcare ownership of the healthcare record, that solves a lot of problem because I have and if I drive the consentive in management so I own the record, it’s my asset and I can then do all kinds of downstream function by sharing temporary.

Nitin Gaur – Director, IBM WW Digital Asset Lab: 14:40

The record, which is what the gentleman from Estonia talked about is the notion of identity and assigning a record, additional asset to that identity and then eventually propagating the business function that goes from it. But there are hurdles, there are hurdles from the industry, are hurdles from the governance systems that are hurdles. So I believe, and correct me if I’m wrong I believe we chose this healthcare because it is the least it solved problem. It has a lot of business value in terms of moving money based on the healthcare providers, the ecosystem, but all the, I think also it’s, it is doable. It is something that we could do and address some of the core elements of healthcare industry problems as opposed to touching the most controversial lady of the industry, which is EMR, EHR and consent, which is giving the patients not just the right but also expecting the patients to do the right things in terms of being educated and so on and so forth.

Nitin Gaur – Director, IBM WW Digital Asset Lab: 15:29

Whereas a bigger pieces of things to solve, but I believe there’s enough work and effort going in that area. I’m going to take a pause. Does it make sense to where we’re going with this?

Francisco Curbera – Director, Blockchain & Consumer Health Development, IBM Watson Health: 15:41

Let me out to that because this is a very good point and this probably in transfer to other industries that the, the opportunity to fundamentally change the core of industry is huge. It’s hard. It’s going to take time, but you can start tackling real problems that have real value, understanding, engaging, engaging the community and the ecosystem, creating these networks of value around blockchain. And then people start sharing data, sharing business processes, and then you can get to the hardest part how this pieces.

Nitin Gaur – Director, IBM WW Digital Asset Lab: 16:25

And that’s where like for example, I have 30 minutes, and for those of you who are technical in the room, we can understand explaining and going into the crux and the guts of how we did this from a blockchain perspective in 30 minutes is a Herculean task. So the idea was not to educate, but to inspire to the methodologies that we’ve chosen across the industry is. So I’ve defined four steps I’ve written. This is a paper so happy to invite you to connect with me on LinkedIn. We talk about a lot of these methodologies that may be used in the industries, including the tech elements to say, giving our clients and ability to give you a four step process. And each step has a way which gives you a simplified way to consume and digest a lot of a huge slew of technical stuff cause it could be a huge task and not just understand blockchain but also applying blockchain to our industries is a huge task. The first step is find the right use case, right? So in many cases, unlike singular technologies, you could use a tech, you could use a specific tech like AI or you could use a new emerging tech to improve, improvise your existing processes.

Nitin Gaur – Director, IBM WW Digital Asset Lab: 17:14

You could use the tech to make things better for a single industry. So in many cases for blockchain, the biggest challenge, which is what Parker mentioned a few minutes back, is getting the minimum viable ecosystem, getting the rights of interested parties upfront to incubator network, hoping the network grows, giving the platform for additional services that we talked about. Again, let’s start with pay or pay network and if the, if the network itself establishes itself can not then use the platform for EMR, EHR, other sharing mechanisms with the right control points in place. So finding the enterprise impact, which means if this use case that you can solve for your own enterprise, can you not solve the same use case for your cohorts? And this is the network effect that we talked about, right? So finally, use case. Keep in mind the network or ecosystem is essential. Without that, blockchain doesn’t really surface to be the right tech.

Nitin Gaur – Director, IBM WW Digital Asset Lab: 18:05

Second thing is cost. At some point beyond the initial romance or POC, someone’s going to pay for the network. You’ve got to garner funding, you have to have the longevity of the solution, so you have to ensure that this, this is a technical guy telling you this and you have to ensure that the use case has enough legs it can stand on in terms of making that investment that’s needed by the ecosystem. Step number two, create a business blueprint, and this is really, really critical where we do a lot of, again, early on 2014 we were eager and doing technical PLCs and POC is always proof of concept, by the way, always work. It’s a controlled experiment. You never heard of any proof of concept that failed, right? Everybody wants would like to conclude a success with it. The idea is to take an existing business process because remember time and trust and you’re trying to flatten the business process that today is distributed across multiple parties in a, in a network and in this case you’re trying to distill that business process into a blockchain network and then you have to redefine because in many cases you’re sharing data, you’re sharing process.

Nitin Gaur – Director, IBM WW Digital Asset Lab: 19:10

There’s a certain sense of visibility in the blockchain network. There’s certain kinds of transparency in blockchain networks which you can understand as a regulated industry. It’s hard to fathom. It’s hard to understand that and this is where we spend a lot of time to do things like office, getting data, ensuring the data movement is regulated and all the industry elements that are addressed. Why do we do it? We have to discover inefficiencies. Again, it’s a disintermediation platform. What that implies is that you have to ensure that we are trying to uncover some of the disintermediation elements. We are trying to uncover interaction points and find dependencies. As you know, as a part of step number two, so this is what we call as business modeling. You haven’t defined the business blueprint before. You begin to apply technology to it. Step number three is again, this is where all the crux of blockchain elements come into play.

Nitin Gaur – Director, IBM WW Digital Asset Lab: 19:59

We go into define the right protocols, find the right conscious, you know, smart contract logic, finding the right technology office, get the data which is ensuring that while we are sharing the data for sake of transparency, but also preserving some of the information about the personal PII type information. Again, uncover risk, total cost, understand the total impact. Step number four, the most expensive part of most blockchain networks is enterprise integration and we learned this again after an number of experiments is that once you formulate a network and you have participant on the network, eventually these systems would have to be integrated with the existing systems of the healthcare providers, the various ecosystem players. And that has to be taken to consideration as well. So these four steps will give you not just risk techniques but also give you a methodology.

Nitin Gaur – Director, IBM WW Digital Asset Lab: 20:51

If you’re knowledge just you know, just jump right into a specific use case, but have a approach which has helps you calculate cost, helps you with some of the elements in terms of ensuring that you’re making the right path, right approach to what the success beyond a proof of concept. Again, the four steps, there’s a long paper written this in interest of time. I’m going to skip that. Seven lessons learned. I’m going to stop at this in 3 seconds. The first four primarily business related elements. We do want to create a network. We do want to provide flexibility of participants who joined the network. They also want to provide flexibility of the network design, which allows participant to leave the network. So the first four elements are all about flexibility in business networks. And the last five, six and seven, again there’s a whole paper and chapter written on this topic which goes into technical elements.

Nitin Gaur – Director, IBM WW Digital Asset Lab: 21:44

I do have to scale. We are dealing with at least from United States perspective, 300 plus million patients, their records, their data and the fact that you have to maintain security transactionality and above all coexisting with business models. Now there’s a lot of technology behind it. I like to understand that it’s not for the fainthearted in the sense that we do spend a lot of time in design. We do spend a lot of time in translating that design and to applying the right tech. So connect with me if you need more information on that. We just had 30 minutes to communicate and convey what you’ve done so far with that. Last block, I’ve written two books on this topic one was all about figuring out the business models you need that in terms of so happy to share some of the knowledge that we’ve acquired over time. With that, I’d like to thank Tory and her team for inviting us to speak at this event and hopefully these 30 minutes, which you can never get back in your life was worth your time. Thank you so much.

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