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Does Blockchain Have a Place in Healthcare?


The buzz about blockchain technology is ever-increasing, with pretty much every tech event having presentations about the potential uses for the technology. However, despite the hype, there is still a lot of misunderstanding surrounding the technology. One of the reasons for this is due to its contentious origin (the original designer of the original blockchain for Bitcoin is referred to under the pseudonym Satoshi Nakamoto and has never been identified, plus it has attracted controversy due to its popularity amongst online criminals), while there is also no standard definitions in place for what exactly is blockchain technology. However, the potential disruptive nature of blockchain makes it important to understand the potential uses it can be put to. However, it is also important to separate hype from reality. This article will attempt to do that, as well as understanding the potential implications that the technology will have on the healthcare industry.

What is Blockchain?

At its most base level, blockchain is simply a record of transactions. It is distributed across the network and once a transaction is recorded on the blockchain it cannot be removed or edited. The network shares the blockchain on a peer-to-peer basis between the users of the system, meaning that all users have access to the entire system. This process makes the data almost impossible to corrupt and therefore records on the blockchain are immutable. The basic blockchain system can then be built on, allowing for applications to be built or additional systems to be in place, such as self-executing smart contracts or public and private keys to use in transactions.

The blockchain hype can be compared to the hype surrounding the internet in the early 90s, where, for example, email and web browsing were considered as separate uses of the internet. Today, some of the confusion around blockchain is not at its base layer, but rather because of hype surrounding the potential, but yet unproven, use cases of the system, which are built upon the system rather than being an integral part of the system. An example of this is the confusion between blockchain and Bitcoin. Although Bitcoin is the first, and most well-known, use of the blockchain, it is only one of hundreds of applications that use blockchain technology today.

In terms of its use in the healthcare industry, although blockchain technology has the potential to act as a disruptive technology in this sector, it is unlikely that it will solve all of the existing and emerging issues that are a result of the health system being increasingly digitalised. Instead, it will be an evolutionary process, where blockchain based healthcare applications will be trialled in areas where trust and governance are core factors.

Where might blockchain be implemented in the healthcare industry?

Although blockchain has been accepted by the fintech industry as potentially revolutionary, the healthcare industry is only just beginning to understand the potential that the technology could have on its processes, both in the realms of reality and speculation. Although the excitement towards blockchain is shared by healthcare authorities, governments and the provider community, right now the industry needs to focus on creating partnerships between stakeholders and creating standards or frameworks to ensure that widespread adaption of the technology across the healthcare sector is achievable. An example of where it might be adapted is by the Hyperledger Foundation, an open-source collaboration that intends to provide for cross-industry blockchain technologies.

Although there is plenty of hype, it’s important to understand that blockchain can only be implemented into the healthcare industry one step at a time, and to first focus on realistic applications for the technology. For example, the five examples set out below are realistic opportunities where blockchain technology could be applied right now, albeit dependent on the accord of governments and health systems internationally.

  • Interoperability: One of the primary uses to which blockchain technology can be put to in the healthcare industry is data exchange. By hosting patient data on the blockchain, healthcare systems worldwide will have unprecedented access to secure and accurate data that is irrevocable, allowing access to historic and real-time patient data without the costs and manpower required to reconcile such data. An example of this has already been established in Estonia. However, issues around data privacy and governance structure, especially between public and private entities, may make the Estonian model of blockchain-secured health records difficult to implement globally.
  • Claims Adjudication and Billing Management: It is estimated that between 5-10% of healthcare costs worldwide are fraudulent as a result of overcharging or charging for non-performed services. In the US alone, an estimated $30 million of fraudulent payouts were made under the Medicare programme in 2016. By implementing blockchain, widespread fraud in medical billing can be minimised. If claim adjudication and billing management is automated, it also reduces the need for intermediaries and reduces the administrative costs and time. In addition, blockchain could be implemented to track the logistical information related to reliability-centered maintenance (RCM) functions.
  • Drug Supply Chain Integrity: Globally, it is estimated that about $200 billion is lost by pharmaceutical companies as a result of counterfeit drugs, with an estimated one-third of drugs sold in developing countries considered to be fake. By applying blockchain to the drug supply industry, the supply chain can be tracked from manufacture to sale. Furthermore, by adding functions such as public / private keys and smart contracts, proof of ownership can be illustrated at any stage of the supply chain, allowing for contracts to be successfully managed by different parties.
  • Clinical Trials and Health Research: It is estimated that up to half of clinical trials go unreported, with many investigators unable to share their study results. As a result, there as significant knowledge gaps throughout the healthcare industry. By enabling study results to be published on the blockchain, immutable records of clinical trials, issues surrounding selective reporting, fraud and error in clinical trials could be reduced or eradicated. In addition, the implementation of blockchain technology could assist in collaboration between researches and participants, especially in areas such as population health management.
  • Cyber Security and IoT: There were an estimated 27 million patients affected by data breaches in the US alone in 2016. Almost half of these breaches were from insider information while another quarter was as a result of hacking and ransomware. With the increase of internet-connected health devices (an estimated 20-30 billion by 2020), it will be a challenge to the infrastructure and architecture of security systems in the healthcare industry to protect the data being obtained from these devices. However, by implementing blockchain solutions, the industry can provide device data interoperability while also ensuring security, privacy and reliability.

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