Blockchain in health care and in your portfolio [PODCAST]

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“The future of health care will be focused on prevention rather than focused on performing excessive medical treatments, diagnostic tests, and procedures. Many centralized processes, services, products, and entities will become unbundled, including insurance, hospitalization, inpatient and outpatient coding, medical billing, payments, patient care, medical education, licensure, and certification. Physicians, including Leah Houston, MD, are developing blockchain-based platform technologies for improved physician credentialing.

The current applications of blockchain technology that are currently being worked on in the field of health care include enhanced data security, transparency to financial operations, eliminating excessive administrative burden and waste, decreasing billing cycle complexity, improved methods for recording, storing, and access data records, credentialing, and supply chain management.

Obviously, with blockchain just still a nascent technology, a whole host of other unnamed applications are possible, as the sky is the limit.”

Christopher H. Loo is a physician and author of How I Quit My Lucrative Medical Career and Achieved Financial Freedom Using Real Estate.

He shares his story and discusses his KevinMD article, “What does blockchain mean for health care?”

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Hosted by Kevin Pho, MD, The Podcast by KevinMD shares the stories of the many who intersect with our health care system but are rarely heard from.

Transcript

Kevin Pho: Hi, and welcome to the show, where we share the stories of the many who intersect with our health care system but are rarely heard from. My name is Kevin Pho, founder and editor of KevinMD. Today we welcome back on the show Christopher Loo. He’s a physician turned entrepreneur and investor, and he’s the author of the book How I Quit My Lucrative Medical Career and Achieved Financial Freedom Using Real Estate. He wrote the KevinMD article “What does blockchain mean for health care?” Christopher, welcome back to the show.

Christopher H. Loo: Hey, Kevin. Really happy to be on the show. Thanks for having me back. It’s been almost since June of last year, and I’m happy to contribute to the content.

Kevin Pho: Excellent. And yes, you were one of my first guests, and I’ve done almost 400 of these shows, so it’s fantastic to have some repeat guests again. Now, for those who didn’t get a chance to listen to your first show way back, can you just briefly share your story and journey to where you are today?

Christopher H. Loo: Yeah, definitely. As you said, I’m a physician. Now I’m a full-time entrepreneur and investor. I’m based out of the Houston Texas Medical Center. Essentially, I went to Baylor for medical school, was part of the MD-PhD program, and got my PhD in bioengineering, and during my graduate school years was when I really started to delve full-time into entrepreneurship. I started to educate myself about financial freedom during medical school and started focusing on building my passive income streams during medical school. So by the age of 29 years old, in my final year of medical school, I had reached financial independence and matched into orthopedic surgery.

However, in 2008, I took a leap of faith to become a full-time investor and entrepreneur. When the world markets were crashing, I was running toward fear. When everybody was running away from fear, I was running toward it. I started investing in single-family residences, and from the years 2008 to 2016, I amassed a financial real estate portfolio such that at 38 years old, I was financially set for the rest of my life. And so I really started my consulting journey back in 2017, after spending a year as a digital nomad, so that I could create a platform where I could reach and inspire others to pursue their dreams, take risks, and pursue the dreams of entrepreneurship. Again, it was a really calculated and strategic risk, but it paid off huge in terms of financial rewards, as well as time freedom and location independence. So I’m happy to answer questions from there.

Kevin Pho: Now, in making that transition from medicine to entrepreneurship, what would you say is the biggest challenge during that transition?

Christopher H. Loo: A lot of it is based on fear. In medicine, we’re culturally conditioned to turn away from fear, to not take risks, to go with the herd. And so I really had to listen, tune in, and hone into my intuition and really venture out. I had to go against what the crowd was saying, what the herd was saying. And like I said, in 2008, when the whole world was crashing, I was running toward it, and as you can see, 13 years later, it paid off. So really, my number one advice is to really listen to your intuition, and sometimes you just have to take that leap, because we only have one life to live.

Kevin Pho: Excellent. So let’s transition now into the KevinMD article. It’s titled “What does blockchain mean for health care?” And of course, blockchain has been in the news recently with Ethereum and Bitcoin, of course, and NFTs, non-fungible tokens. I’m certainly interested in hearing the concept of blockchain as it applies to health care, but to get everyone on the same page, just give us a basic definition of what blockchain is, and then go ahead and summarize that article for those who didn’t get a chance to read it.

Christopher H. Loo: So blockchain is essentially a ledger. It’s really good for things such as financial transactions and recording events. Basically, the way I describe it in layman’s terms is that it’s almost like the internet on steroids. If you think about what the internet did in the early 2000s, how it dematerialized information, democratized it, and changed the media as well as the social media landscapes in a lot of industries, blockchain is almost like that, except it’s three-dimensional. So it’s almost like the internet on steroids.

There are a couple of key features about the blockchain that make it really important, and it also has a lot of features that make for potential applications that have a lot of promising potential. For example, one is that it’s decentralized, so it’s not subject to forces of coercion. It’s immutable, so it can’t be changed. Other things are in terms of interoperability, which means that you can use it across different functions and platforms. So it has a lot of unique features that make it amenable to a lot of potential future applications.

Kevin Pho: So as it applies to health care specifically, what do you see as some of the applications for blockchain?

Christopher H. Loo: Health care is a really interesting industry, because it’s very highly regulated and it’s highly bureaucratic. So a lot of the effects of the blockchain, in my opinion, aren’t going to be seen until a few, 10, 15 years later, just because of the massive amounts of regulation. But as for potential applications, for example, one is in supply chain management, because the blockchain is a ledger, right? So you can use it potentially for the tracking as well as the logging of the supply chain. There are a lot of different applications in terms of pharmaceuticals and in terms of material supplies.

A lot of physician entrepreneurs are working with the blockchain for easier physician credentialing and access. As we know, applying for licensure is an extremely burdensome, cumbersome, and time-consuming endeavor, so a lot of startups are looking into that realm. Other startups are also looking into how to use the blockchain for patient data, patient management, patient information, and patient privacy, and how to incorporate all of these data assets and items into potential applications. So those are some of them. Again, this is a highly nascent field, so there’s not going to be a clear winner, and the future is still unbound. So the sky’s the limit.

Kevin Pho: You mentioned regulatory burdens as one of the obstacles that’s preventing blockchain from achieving its full potential in health care. Now, what do you see as some other obstacles that are really preventing blockchain from advancing in health care?

Christopher H. Loo: So for example, a lot of the regulation. For adoptability, it has to have reached a critical mass where people are readily accepting it and using it as a means for their application. So mass adoption is huge. The second thing is trust. In any sort of application, you have to have trust, and you have to have safeguards against fraud, waste, and abuse. So those are some of them. But the main ones, like I said, in any new, nascent technology, are usually going to be regulation and bureaucracy, as well as trust and authenticity.

Kevin Pho: There’s a comment saying that in health care, technology is always five to 10 years behind, and then there are so many established players in the field who just like the status quo. If you took a look at electronic medical records, for instance, there’s one particular company that has such a large share of that, that is probably unwilling to give that up. Now, do you see the status quo in health care being an impediment to those who want to adopt blockchain technology?

Christopher H. Loo: Yes, I actually do. We alluded earlier to some of the challenges to actually becoming an entrepreneur as a physician. So really, the status quo is one of the hurdles against any sort of innovation, rightfully so, but also with regulation come hindrances to innovation. The thing is, now with the COVID-19 pandemic, we’re seeing a lot of issues, such as burnout and depression and a mass exodus of early-career physicians. It’s no surprise that the health care industry is in crisis. So yes, people are starting to generally waken up, which is why we’re doing these podcasts, and to really understand it, and people will start questioning the status quo. If you go on social media, there are a lot of physician influencers talking about financial freedom, innovation, and all sorts of issues. But that’s definitely one of them, and that’s why, again, I share my story and my inspiration for becoming an entrepreneur and becoming financially free at 38.

Kevin Pho: So I’m going to shift gears now, and let’s talk about that intersection between financial freedom and cryptocurrency, which of course the blockchain is a part of. Now, there’s a lot of controversy as to whether cryptocurrency belongs in a typical clinician portfolio for financial freedom. So as an investor yourself, what’s your opinion in terms of cryptocurrency, and does it belong in a typical clinician financial portfolio?

Christopher H. Loo: All right, it’s an awesome question. I get asked that all the time. In my opinion, in 2012, I read the white paper by Satoshi Nakamoto, where he talked about decentralized digital money and a decentralized financial system, and that just spoke to me, because I saw how the banks stole from the masses in the 2008 crisis. And so from there, I started buying Bitcoin when it was in the pennies. It was more as a hobby, but now it’s reached almost a critical mass of adoption with the Coinbase IPO. So the future is bright.

I will say that cryptocurrency has transitioned from being extremely speculative. Now people are looking to Bitcoin as a hedge against central bank printing, zero percent interest rates, as well as fractional reserve banking. So now people are looking at it as a storage of value and a hedge against future inflation. That being said, short-term-wise, there are going to be huge fluctuations, but in my book, long-term, I’m bullish on cryptocurrencies, not only as a storage of value but also, next, as a medium of exchange, so actually paying for different types of services. And you’re starting to see areas such as decentralized finance and non-fungible tokens, and so you’re going to see a whole host of innovation in this field. But like I said, this is not advice. This is my own personal opinion, so just do your own research.

Kevin Pho: Now, for those physicians who are interested in incorporating some cryptocurrency in their portfolio, what’s the best way for them to do that?

Christopher H. Loo: So there are a number of ways. The easiest way is you can start an account with Coinbase. It’s safe, it’s trusted, it’s regulated, and their recent IPO is a huge milestone for the crypto community. So you can do Coinbase. There are a lot of other exchanges; you can do Kraken, there’s Binance. But like I said, go with a safe, trusted, regulated brokerage and exchange, which in this case is Coinbase. But again, there are a lot of different ways. The main disadvantage of Coinbase is their high fees, but again, those high fees go in the form of added protection and more regulation, so you’re following the rules, and your money is a little bit safer.

Kevin Pho: In comparison to, say, a typical total market index fund, what kind of returns can you expect, and what kind of risks can you also expect from cryptocurrency?

Christopher H. Loo: I’ll give you an example. For example, this year, my crypto portfolio is almost 4x, 5x right now since January. So you can see those types of returns. Again, those aren’t like a typical index fund portfolio, 8 to 10 percent, maybe higher if you take risk. You can expect higher returns, but again, you also have to expect higher risk. You can see the price of Bitcoin and cryptocurrencies dropping drastically, 20 percent in a day, 10 percent in a day. So like I said, short-term, there’s going to be high volatility, but long-term, I’m still bullish on the industry and on the future.

Kevin Pho: And knowing that this isn’t financial advice, what proportion of a typical portfolio is reasonable for cryptocurrency?

Christopher H. Loo: Yeah, great question. For just the average novice person, 1 to 2 percent, just to have exposure to it. I don’t recommend 100 percent. I know there are people out there that have their entire portfolio in it, but like I said, this is a hedge, and a hedge means that you’re mitigating risk. So 1 to 2 percent. My crypto portfolio now is 10 percent, approaching 15 percent. But like I said, these are all personal decisions, so do your own research.

Kevin Pho: Now, I have physicians ask me about NFTs, or non-fungible tokens, and they’re based on the Ethereum network. And some of them asked me, “Should I invest in Ethereum, because it actually has more use than, say, Bitcoin?” Bitcoin’s really just used as a store of value. So what are your thoughts on that?

Christopher H. Loo: I think the Ethereum platform is awesome for future applications. All of the future applications that you mentioned are based on the Ethereum platform. The interesting thing about Ethereum is that they’re going to transition to Ethereum 2.0 because of the high gas fees. It’s a lot faster, but the fees are a lot higher, so now they’re trying to innovate on the platform to make it a lot cheaper in terms of fees.

This is what I’ve most recently observed with the price of Bitcoin versus Ethereum: The price of Bitcoin has actually topped around $60,000, and it drops, and it ranges between 50 and 60. But a lot of the investors and speculators that are looking for growth are now turning to Ethereum. Ethereum back in early January was like $900, and now it’s almost $3,400, last I checked. So if you’re looking for growth, Ethereum is the next thing, but like I said, expect wide fluctuations, because it’s a very nascent field.

Kevin Pho: We’re talking to Christopher Loo. He is a physician turned entrepreneur and investor. He wrote the KevinMD article “What does blockchain mean for health care?” Now, for those physicians who are interested in reading more about blockchain and cryptocurrencies as they relate not only to health care but to their own personal portfolios as well, what kind of resources can you recommend?

Christopher H. Loo: Well, there are a lot of great books out there right now. One great, fantastic resource is called The Bitcoin Standard. It’s a book, and it’s actually talking about the fundamentals and economics of central banking, fractional reserve banking, and interest rates, and how Bitcoin fits into it. So it’s a fantastic book. It’s not a speculator’s book; it’s more of a fundamental book. A lot of podcasts are out there, so you can go to YouTube. Michael Saylor is a great person I recommend. I’ve listened to him; one of his podcasts was two hours long, and I got so much information and gems from there. So, like with the internet democratizing access to information, now it’s so easy to get information and inspiration. So definitely check those out. It’s a fascinating field, and I’m really excited for the future.

Kevin Pho: And my final question: What’s your take-home message that you want to leave with the KevinMD audience?

Christopher H. Loo: Take risks. Take mitigated risk, take calculated and strategic, and always challenge the status quo, because the status quo is based on the industrial age, but right now we’re in the information age. Things are changing. Follow your gut and your intuition, but always think about cost, benefit, and risk. So I hope that helped, and I’m excited for the future.

Kevin Pho: Christopher, thank you again for coming back on the show, and thanks again for your time and insight.

Christopher H. Loo: Thanks so much, Kevin. I appreciate our time together.

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