In 2018, the global health industry was worth $8.45 trillion. The onset of the coronavirus pandemic boosted spending in the health industry even further and 2022 is expected to see global healthcare spending hit $12 trillion. As the market size and importance grows, so does the need to apply the advancements in technology that are already benefiting other industries. Whilst the DeFi (decentralized finance) sector is booming and revolutionizing the financial world, we are yet to fully see the multitude of benefits a blockchain-based approach to healthcare can have.
The transparency, efficiency, and cost-effectiveness of the DeFi method can have an equally as massive impact on the global healthcare industry as it has on the financial world. The key principles of DeFi – community governance, transparency, scalability, and efficiency through the elimination of third parties offer a myriad of opportunities for improving a burgeoning global healthcare industry. Let’s have a look at how.
Purchasing and Leasing of Medical Equipment
Medical equipment does not come cheap. In 2018, medical and surgical supply costs were calculated at $27.4 million on average per hospital. In a 2012 report, the U.S. Government Accountability Office (GAO) found that a big reason for the high costs of certain medical devices is the lack of transparency. When everyone in the middle is looking for a profit, the cost of purchasing and leasing medical equipment can soar.
DeFi eliminates the expensive and inefficient third parties and brings a much-needed level of transparency to the purchasing and leasing of medical equipment which ultimately will provide cheaper and more sustainable methods of funding for essential medical equipment.
Improve Practices
By putting more and more of the processes and operations on blockchain technology, costs can be cut and more efficiency achieved. This is not something new, In 2019, the UAE’s Ministry of Health and Prevention (MoHAP) launched a blockchain system for saving and sharing information of healthcare workers in health facilities. The blockchain system formed a database that enables the Ministry of Health and Prevention (MoHAP) to verify the qualifications and licensing of its large ever-growing healthcare worker population in a quick and inexpensive method.
By providing Distributed Ledger Technologies (DLT) on blockchain technology, the healthcare industry can revolutionize how data is stored and shared, bringing a level of accuracy, transparency, and efficiency yet to be fully realized. It can also improve other areas of the healthcare industry such as supply chain management.
Improve Medical Research
Research and Development costs estimations for the development of new drugs range widely, from $43.4 million to $4.2 billion. The high cost of researching and developing new drugs presents funding challenges. However, DeFi can bring together interested parties from around the world to fund research, in a transparent and cost-effective manner.
Final Words…
There is still a long way to go in the healthcare industry before the impact of DeFi and blockchain technologies can be felt. As of June 2020, 44% of healthcare providers had never even heard of blockchain. However, the revolution has started. More and more, we are seeing the application of Defi and blockchain technology in an industry that traditionally suffers from a lack of transparency, inefficiency, poor data management, and rising costs.
Decentralized finance can benefit the healthcare industry across the board and we shall see a lot more of Defi in the global healthcare world in the near future
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