Here’s an audacious goal: Austin, Texas-based telemedicine startup BitMED is on a mission to deliver “no-cost” basic health care—to the whole world.
With $8.1 million in the bank, and plans to welcome 1 million new users by year’s end, BitMED utilizes a relatively straightforward business model: become a member, agree to allow the company to lease out your data for “research purposes,” and receive access to its in-house physicians, among other benefits.
Bo Vargas, BitMED’s co-founder and chief technology officer, says the company will be able to achieve its mission and provide health care to billions within the next 10 years—all built on the strength of its own blockchain protocol.
If BitMED’s plans to expand its presence in Asia pan out, it could see its market reach extend to 2 billion users in the next five years.
Vargas, whose prior experience at defense contractor Raytheon saw him engage in cyber warfare in the furtherance of U.S. national security, built BitMED’s blockchain protocol with the help of VP of Engineering Aurelian Dumitru, who previously developed cloud and data systems for Dell, Nokia and other tech companies. The engineering duo is confident that their protocol will meet the demands of their growing membership.
While BitMED currently services approximately 200,000 active users across North America, Africa and Asia, the company says it has contracts in hand through various partnerships to slowly onboard 50 million new users by the first quarter of 2020. If BitMED’s plans to expand its presence in Asia pan out, it could see its market reach extend to 2 billion users in the next five years.
BitMED says its protocol, based on a combination of Hyperledger and other technologies, can handle the load. “Early on, we realized that we won’t be able to scale to 2 billion users unless we adopt the most advanced software and system engineering practices, and build scalability and security from the ground up,” says Dumitru. “That led to making each layer of the stack—app, database, frontend—natively scalable and fault tolerant.”
Put your money where your health is
Founded in 2015, BitMED “stumbled upon” blockchain when searching for a way to incentivize its users to comply with their physician’s medical advice, recalls Vargas. He says that it wasn’t enough to simply tell patients “take this medicine or else you might die soon.” If you really want them to comply, you’ve got to hit them where it hurts: their wallets.
BitMED’s BXM token is what drives its growing online community. To mitigate the demand that comes with the promise of “free health care,” users must first request a signup code from the company’s website, or be provided one from a BitMED partner, such as an employer, church, or government agency. When members first log in, they are asked to fill out a comprehensive medical survey. That’s when things get interesting.
Members are then given the option to opt into the company’s data-sharing program and receive 1 BXM if they agree. (Those who do not agree to data sharing may still participate by earning BXM in other ways or buying it on BitMED’s exchange: 1 USD to 1 BXM.) Members may also upload any medical documents they choose; the more they share, the more they are rewarded.
Once on the platform, BitMED members use those BXM rewards to access content, community forums, and an array of telehealth services: primary care consultations, urgent care, women’s health, mental health, and even treatments for diabetes and hypertension. BitMED physicians can and do prescribe their patient’s medication, and the company says it aims to provide the full scale of medical services—everything short of emergency procedures and surgeries—all while learning everything it can about its members.
BitMED’s system depends on its extracting as much information as it can from its users, incentivizing “good behavior,” and developing a kind of “internal FICO score” for each member. Engage in desirable behavior, like following through with a health plan or moderating a community, and you’ll earn more BXM. Engage in undesirable behavior, like no-showing a scheduled appointment or spamming the community, and you’ll be penalized.
“The idea is to get people to think about their health at least as much as they think about their money,” Vargas says. He argues that people often put more resources into managing their finances than managing their own health care. “But as soon as you get sick, you’re willing to give all that money up to get better.” BitMED is ostensibly a telemedicine provider. It staffs roughly 100 physicians who share the goal of helping BitMED members lead healthy lives. But don’t get it twisted. This is a business. And BitMED is in this to make money. A lot of money.
“The beauty of data is that it can be sold 24/7.”Bo Vargas, BitMED Co-Founder and CTO
BitMED’s revenue model depends on its leasing the health records of its members to medical data brokers, hedge funds, or anyone else willing to pay for it. It’s what allows the company to provide its health-care services at no monetary cost to its members.
The buying, selling, and trading of health information presents a global market opportunity of more than $230 billion, with companies like IQVIA (formerly known as IMS Health) currently dominating the space. “The beauty of data is that it can be sold 24/7,” BitMED’s CTO says. “It doesn’t operate on any time slot.” Additionally, the telemedicine industry, primarily driven by BitMED’s largest competitor Teledoc, represents another $18 billion opportunity that is expected to grow to more than $40 billion by 2021, according to Orbis Research. With its feet firmly planted in both waters, BitMED aims to double dip their chips in ways that would make George Costanza proud. And investors have taken notice.
To date, BitMED has caught the eye of investment firms Dosatsu, Godzilla Capital Partners, Tokenstack Partners, and Lunar Capital and raised just over $8 million in financing. BitMED co-founders Vargas and Rishi Madhok, a practicing emergency-room physician with over 10 years of experience, started the company with $300,000 of their own money and are now eyeing another, much larger investment round in the near future. The dollars appear to make sense, but do the ethics?
Concerns and consensus
Privacy advocates have long raised concerns regarding the sale of medical records—anonymized or not. After all, data miners willing to make the necessary time investment are able to de-anonymize data and build individualized profiles.
BitMED doesn’t deny this. The company stresses, however, that most people are already having their medical records bought and sold without their knowledge. Vargas says BitMED cannot take credit for creating the business of selling medical data. What BitMED has done, he says, is create a “better, faster, and cheaper way to do it” while empowering its members to benefit from each sale. Each time a merchant leases a dataset on the BitMED blockchain, members whose records were accessed “have their wallets sprinkled” with up to 3% of the sale in BXM.
The transparency with which BitMED operates is enough to satisfy Dr. Ron Ribitzky, a BitMED advisor, former senior health-care strategist at Intel, and a leading expert in the burgeoning “blockchain in health care” industry. The ethics of data monetization is a “universal concern” that he regularly encounters in his travels around the world, he says. “As a physician and consumer alike, my answer is simple: profiting from one’s medical data is ethical if they agree to it.” In contrast, Ribitzky argues that preventing people from “making this decision for themselves, or making such decisions on their behalf,” is the truly unethical practice.
A physician and technologist by trade, Ribitzky says he’s come across his fair share of health-care-related blockchain projects. He has developed his own rubric through which he separates the signal from noise in this space and considers BitMED to be the “epitome of a disrupter.”
While BitMED faces stiff competition across its various verticals, the company is convinced that no one else yet offers the full array of services that it promises its members. It is precisely “the scale of the company’s ambition” that is causing observers to take notice, including BitMED’s newly minted vice president of marketing, Greg Saint James. Whether or not the business model is sustainable remains to be seen, but the company’s early success is a testament to the allure of its unique offering.
It’s free health care on the free market all at the expense of your personal medical data. According to BitMED’s projections, it’s a trade that billions of people are eager to make.