A Closer Look at Blockchain for Public Sector Use

November 21, 2019 Christine Quinn

Taking a Closer Look at Blockchain for Public Sector Use

By now, nearly everyone has at least a passing understanding of the buzz surrounding blockchain, which offers promise as a technology to help modernize transactions, increase transparency and automation, and improve security, while providing meaningful, real-time insights.

What may be less well understood is how this particular technological advance hasn’t already taken off, especially across the public sector. Clearly, federal, state and local government agencies desperately need to ensure the security of transactions, and automate or streamline many operational processes. Within its Emerging Technology purview, the General Services Administration (GSA) has already developed three blockchain programs, including:

  1. United States Agency for International Development (USAID) – examining how blockchain could help address development challenges in health, agriculture, governance, finance, trade, humanitarian assistance, or energy.
  2. Centers for Disease Control (CDC) – testing how blockchain could help with public health surveillance to more efficiently manage data during a crisis, or to better track opioid abuse.
  3. Department of Defense – exploring how blockchain could help ensure cybersecurity in manufacturing processes. 

Although blockchain is not yet been specified on state government strategic roadmaps, the need to modernize and streamline eligibility and enrollment operations across agency health and social services has been well documented. As agencies across all levels work to modernize operations while operating within strict budgetary constraints, public sector leaders recognize the need to adapt and embrace solutions or services that will transform outdated manual/paper-driven processes.

This is why it’s a good idea to take a closer look at blockchain technologies. According to Gartner Inc.’s recent research, by 2023, up to 30% of world news and video content will be authenticated as real by blockchain, countering deep fake technology. And Gartner also predicts that by 2025, 50% of people with a smartphone, but without a bank account, will use a mobile-accessible cryptocurrency account.

How it works

Blockchain is a resilient public or private system that provides an immutable ledger for transaction information. Transactions are logged as ‘blocks’ in the ledger’s ‘chain’ and broadcast across networks. Network nodes are able to trust every transaction’s accuracy in the shared, chronological ledger. Similar to the cloud, a blockchain can be public, which means anyone can add to it -- or private, which means a ‘privileged’ consortium of members may add to the blockchain.

One caveat is that blockchain isn’t easily bolted onto current systems to ‘modernize’ existing processes. Instead, agencies must determine how best to use blockchain to transform the way transactions are documented, organized and managed. In Health and Human Services (HHS) agencies that provide subsidized services to people who meet specific criteria related to the federal poverty level, blockchain is well-positioned to help. In nearly every process used to enroll individuals or validate eligibility, there is a strong requirement to improve security, transparency and traceability.

Agencies must also accelerate timeliness, while reducing the potential for fraud or abuse. By reducing manual interventions required to authenticate identities, or confirm eligibility, blockchain can help states automate intricate steps involved in eligibility and enrollment, while simultaneously reducing errors and improving efficiency. In many ways, blockchain can help HHS agencies overcome serious security, transparency, privacy and interoperability challenges.

Here are a few best practices to consider in evaluating how best to use blockchain in your agency’s operations:

  • Think about where you most need to track transactions. That is likely where blockchain would be most useful.
  • Consider implementing a specific pilot project and choose a partner well-positioned to help you capitalize on blockchain’s advantages.
  • Hone in on processes related to procurement, administration or authentication to see the biggest benefits. For one large health insurer, Conduent is working to build a blockchain network to validate provider credentials. This pilot will create a unified network of healthcare stakeholders (payers, providers, and members) to store, track, and update provider data one time, all in one place.
  • Coordination across agency HHS programs is key to delivering optimal support to recipients. Using blockchain, agencies can connect beneficiaries of one program to additional programs as needed, while preventing the potential for service duplication, or other types of fraud, waste or abuse.
  • Understanding agency requirements and how a blockchain application can help is crucial.  You must clearly understand how best to apply and adopt blockchain in specific transactional operations to make the most of its advantages.

  • Review the results of our recent Blockchain Hackathon. Check here to learn more about a few winning implementations.

Investing in new technologies, such as blockchain, requires a knowledgeable, dedicated partner to help you plan the best path forward. In addition, there are also government-led initiatives worth further investigation. GSA, for example, also offers a blockchain mailing list for government employees and the public to help everyone keep up with developments in this arena.

Within the Department of Homeland Security, the Public-Private Analytics Exchange Program created a report on blockchain that found, “more resources, training and development should be dedicated to pilot programs to determine the utility and impact of blockchain to the U.S. government.”

At Conduent, we find the promise of blockchain lies in creating new and better ways to efficiently and securely deliver agency services. From healthcare invoice processing to HHS benefits administration, Conduent can help you improve security and optimize agency operations across a range of platforms and initiatives.

To learn more, read Blockchain in Human Services, or visit www.conduent.com/innovation/blockchain/.

 

About the Author

Director of Business and Market Segment Development, Public Sector, Conduent

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