Consumer health data is a valuable currency in healthcare because of the insights it can provide in developing new drugs and treatment programs. Unfortunately, the consumers that generate the data, which is rendered to be anonymous before it is sold, aren’t the ones to profit from its sale. Those profits go to the sellers—the health systems, providers, insurance carriers and other healthcare data brokers—that collect patient data.
But what if there was a way for consumers to not only profit from the sale of their health data, but use those profits to lower their out-of-pocket healthcare costs? Technology start-up CoverUS believes it has hit upon the answer: a digital wallet that is a de facto health savings account into which funds can be downloaded each time a consumer shares his health data with a third-party.
Consumers downloading the CoverUS app, which is scheduled to launch during the second quarter, can set permissions within the app to allow third parties access to their electronic medical records. In addition, consumers can enrich their health profile with information downloaded from wearable devices and other consumer-facing health apps.
Access to additional personalized consumer health data is a point-of-differentiation for CoverUS over traditional health data sellers, which typically don’t have access to such supplemental information, the company says.
Improved accuracy is another point of differentiation. Giving consumers direct control over their health records creates the opportunity for them to spot and correct inaccuracies or fill in gaps in their medical record.
Data inaccuracies are a significant problem, says CoverUS co-founder Christopher Sealey. To illustrate his point, Sealey cites a World Privacy Forum report that found that of the consumer data it reviewed collected by a big database marketing provider only 50% was accurate.
“We start health data users further downstream because we give consumers incentives to participate in the data gathering process, which improves the quality of health data available,” Sealey adds.
To earn CoverCoins, CoverUS’s crypto currency that can only be spent on health-related products and services, a consumer must agree to anonymously share his health data. Crypto currency is a digital or virtual currency designed to work as a medium of exchange.
A consumer with diabetes, for example, may receive an offer from a medical research firm conducting a study on diabetes patients to release his medical records in return for earning 50 CoverCoins. Other ways to earn CoverCoins include agreeing to participate in a survey sponsored by a pharmaceutical company or a drug trial.
CoverUS determines the amount consumers earn for each transaction and funds its crypto currency with money paid by third parties to access a consumer’s information. Consumers will be able to spend their CoverCoins on health-related products such as prescription drugs, co-pays and other services related to social determinants of healthcare, such as rides to the doctor.
“We are engaged in conversations with direct primary care providers and concierge doctor networks that may be some of our first provider-based vendors,” says Sealey.
CoverCoins are pegged to fiat money, which is currency declared by the federal government to be legal tender, and therefore can be converted to U.S. dollars to pay for goods and services. “Vendor/merchant adoption is not a barrier,” Sealey says.
Sealey estimates the number of CoverCoins a consumer can earn per month, on average, will range from 100 and 1,000, depending on activity. Each CoverCoin is the equivalent to $1.
“High deductible health plans are putting a financial burden on people and by developing a comprehensive health data network that rewards consumers for sharing their health information, we can help consumers bridge the financial gap in healthcare, while giving them more control over their health data,” says Sealey.
CoverUS isn’t saying much about its business model, its revenue stream or start-up funding. But the Brooklyn, New York company is talking to employers and organizations, such as unions, trade associations and non-profits in Boston, Chicago, New Orleans, New York and Miami that can promote its service to consumers. These promotional messengers, as Sealey describes them, are entities that have credibility with consumers and are likely to serve as influencers that can help CoverUS build relationships with consumers.
“We feel that people and organizations can influence consumers more than building a brand ourselves can at this point,” says CoverUS co-founder Peter Shanley.
Shanley and Sealey co-founded CoverUS with Andrew Hoppin, a technology entrepreneur.
To support its crypto currency, CoverUS is using blockchain technology, a distributed, software-based ledger that provides an accurate, up-to-the-minute record of each transaction made with the currency at any point in time. While the best-known use case of blockchain technology is the ledger for Bitcoin, other use cases for the technology are emerging, such as settling stock and banking transactions.
What makes the blockchain appealing for other types of transactions is its simplicity, says CoverUS. Using the blockchain, assets can be moved directly between two trading partners similar to the way data flows across the Internet, which eliminates the need for intermediaries to help facilitate the transfer. Reducing the need for intermediaries, in theory, creates a more streamlined and economical process for transferring assets. In the case of the health care system, eliminating inefficiencies around the exchange of patient data could help lower the overall cost of care, Shanley says.
Under CoverUS’s model, third-parties looking to access information within the CoverUS database must request a key from the company. The key allows third-parties to anonymously identify groups fitting a specific demographic profile, such as people aged 40 to 55 with heart conditions. After identifying a group, an offer can be created to incent consumers within the group to share their data. Because consumers directly control access to their data, they can choose when to release it based on the offers received.
“We believe that consumers own their health data and should be able to control its use,” says Sealey. “Blockchain technology allows this and our model enables consumers to create a richer health record they can then monetize to ease the burden of healthcare costs.”
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