A strategic blueprint for replacing traditional health insurance with outcome-based prediction markets. By aligning incentives through blockchain transparency, we can turn health into an asset class.
The current US healthcare system is built on perverse incentives. Insurers profit by denying care; providers profit by maximizing procedures. A Prediction Market flips this: profits are generated only when positive health outcomes are achieved.
Reactive. Doctors paid for sickness. Patients hide data to avoid rate hikes.
Proactive. Doctors "long" patient health. Patients monetize data transparency.
A four-phase strategy to bootstrap a new healthcare economy without asking for permission. Starting with a niche consumer app and scaling to a systemic replacement.
Immediate
Year 1-2
Year 3-5
Year 5+
Before we can predict health, we need data. People won't give it to insurance companies, but they will volunteer it for a chance to win.
The Concept: Users upload Fitbit/Apple Health data. If they hit 10k steps or maintain biomarkers, they earn "tickets" for a weekly crypto prize pool. We build the actuarial dataset for free.
A sustainable system requires all participants to win when the patient stays healthy. Here is the mechanism design for Phase 3.
Wants lower costs and better health.
Currently paid for volume. Needs to be paid for outcomes.
Liquidity providers replacing monolithic insurance co.
Eliminates the massive administrative overhead of traditional insurance (claims processing, denial management). Smart contracts execute payments automatically based on verified data oracles.
Real-time market pricing for risk. Instead of opaque premiums set annually, risk is priced dynamically based on actual population health data.
The Risk: Markets might price out the chronically ill or elderly. "Uninsurable" people could be left behind by pure market forces.
Mitigation: Government subsidy tokens injected into the market for high-risk pools, rather than distorting the price signal itself.
Connecting health data to financial markets creates surveillance risks. If the data leaks, users could be discriminated against.
Why use blockchain? Why not a standard database?
Verify a user is "Healthy" (e.g., BMI < 25, BP < 120/80) without revealing the actual numbers to the insurer.
Automated payout triggers. If the Oracle verifies the diagnosis/outcome, funds move instantly. No claims adjuster can deny it.
Anyone in the world can underwrite US health risk, deepening the capital pool and lowering costs.