Providence St. Joseph Health said Monday it has acquired Lumedic, a startup developing blockchain-based software aimed at improving how healthcare providers bill for care and manage reimbursements from insurers.
The deal, which Providence did not disclose the terms of, marks a rapid path from launch to exit for Seattle-based Lumedic. Michael Nash, the company’s founder and chief product officer, published a Medium post announcing Lumedic to the world just seven months ago.
Providence, headquartered in Renton, WA, operates 51 hospitals and 829 clinics across several U.S. states, covering an estimated 2.1 million patients.
Lumedic will maintain its brand and “operating vision” under new ownership, Providence said.
That vision involves using blockchain technology to help healthcare providers determine which procedures and services patients are eligible for under their current health plans, according to Lumedic’s website. Hospitals and clinics might also use the company’s software to process payments and claims sent to health insurers for reimbursement, Providence said.
Blockchain is perhaps best known as the technology that underpins Bitcoin and other digital currencies, but health insurers, large software businesses, and other organizations are increasingly signaling they see many potential uses for blockchain in healthcare.
Blockchain ledgers are designed to allow users to keep certain transaction information private and secure by encrypting it.
Providence says in its announcement about acquiring Lumedic that blockchain technology offers the promise to “enhance interoperability,” meaning the ability to quickly and easily exchange data, between providers and insurers. IBM (NYSE: IBM) expressed a similar belief last month, saying it was working with a group of insurance and financial services companies to explore how blockchain concepts could improve interoperability.
Another acquisition Providence made in recent years was its purchase of Silicon Valley-based Medicast, a developer of telehealth software. Providence also invests in digital health startups through its VC arm, Providence Ventures.