Blockchain & The Healthcare Industry

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What is the blockchain technology?
The blockchain is a peer-to-peer distributed ledger technology that can be used for creating an unalterable and trusted record of transactions, which was initially introduced in connection with Bitcoin. Since then the blockchain has gained prominence in a number of traditional sectors such as finance, logistics & supply chain, voting and the like.


So, how can blockchain transform the healthcare industry?
In health care, the blockchain aims at tracking patient records securely, privately and comprehensively. In the current scenario, a patient’s medical history might look scattered in bits and pieces dispersed across multiple providers and organizations ranging from your family doctor to every specialist and hospital you have visited throughout your life. Information might also lie in laboratory records and wearable health tracking devices as well.

Blockchain could help us assemble all of these bits and pieces in real-time and view the entire medical history of a patient at a single place. This comes with the confidence of knowing the information is both comprehensive and up-to-date. With the technology, every update to a patient’s record would be verified and combined with previous transactions and added as a new block to the larger existing chain. This ultimately results in a complete and trusted medical history of a patient with details on how and when it has changed over time and who made these changes. Benefits of integrating blockchain into existing healthcare system are:


Improved Data tracking and integrity
With a constant increase in patient numbers, healthcare providers manage more and more health data on a regular basis. This increase in data volume may make it harder for hospitals and clinics to process and store information.
Normally data managed by medical organizations would include a patient’s medical history, electronic health records, data collected from wearable tracking devices or monitoring systems & medical insurance details.

It is crucial that these patient information records are stored and shared securely after verification of information. This is where blockchain comes into the picture as data integrity is one of the main features of the technology itself with information becoming unalterable as it is stored after encryption. Ensuring data safety leads to reduced audit expenses and better compliance with regulations.


Interoperability or secure data sharing
In the healthcare system flow model, smooth and clear data sharing between healthcare solution providers can lead to accuracy in diagnosis, effective treatment plans, and a cost-effective ecosystem. The day-to-day increase in patient data requires the proper utilization of resources in order to make the most effective use of the insights received through it.
Adapting blockchain technology in healthcare allows multiple entities of the healthcare ecosystem to stay in sync and share data on a commonly distributed ledger. With such a system in place, the participants can share and keep track of their data and other exchanges happening in the system without having to bother about integrity and security. Depending on the requirements and access permissions for the network members, two types of blockchains can be implemented:
  1. A Permissioned Blockchain that maintains the privacy of the data and allows real-time data to be shared only between the participants of the network who possess the permission to access it. Such networks are built and used inside organizations and enterprises in order to make transactions more secure. Once a transaction is approved through consensus, it will become a permanent record and get added as a new block to the existing blockchain.
  2. Permissionless Blockchain or Smart Contract which can be defined as a ‘set of instructions’ on the blockchain that is executed automatically once all the necessary conditions or events are met. This means permissionless blockchains provide access to anybody who creates an address of their own and begin interacting with the network.


Between the two, a permissioned or private blockchains would be more suitable for effective use in healthcare. The use of Blockchain technology in healthcare holds a lot of potentials like revenue cycle management, drug supply management, clinical trials management, and prevention of frauds.


According to Frost & Sullivan research for Blockchain Technology in Global Healthcare, “Blockchain technology may not be the panacea for healthcare industry challenges, but it holds the potential to save billions of dollars by optimizing current workflows and disintermediating some high-cost gatekeepers.”


Blockchain Applications for Healthcare

  • Patient Data Management: Healthcare being a complex system with many entities, a patient will have to share their health-related information with the doctor as well as the other care providers while going for treatment. A blockchain system in place for patient data management would create a hash for individual patient health information blocks and a collective system would generate a patient ID. The system would even allow patients to reveal the necessary data to third parties while keeping their identity secret and being able to control the time limit and access permissions for data sharing with third parties.
  • Population Health Data: Data security, shareability, and interoperability is crucial while compiling population health data of various demographics. With real-time update and access, blockchain is the solution to attain this. More information on public health and its sharing can go a long way in improving healthcare delivery across diverse populations.
  • Patient Payments Through Cryptocurrencies: Through blockchain systems and applications in place, the possibility of frauds during billing can be eliminated. Moreover, when larger organizations adopt payment processing through cryptocurrencies, each penny will be tracked with no place for fraud.
  • Drug Traceability: Counterfeiting of drugs in the medical supply chain constitutes a major loss of billions of dollars every year. The feature of data transparency in a blockchain system can help to find the complete path of origin of a drug, thus, helping in stopping the circulation of fake drugs. In the supply blockchain, every block containing the drug information will have a hash attached to it which will be linked to another block. As the drug moves along the supply chain among different entities, it can be easily backtracked.
  • Clinical Trials: Blockchain has the potential to increase transparency and accountability of medical practitioners and researchers when it comes to clinical trials and the trial subject consent. By maintaining an unalterable log of patient details and consent, regulators can easily monitor clinical trial standards for any violations of law.
  • Device Tracking: It is common that medical organizations suffer losses from not being able to track down their devices. The devices may become lost due to misplacement or not logging down their locations. The use of the blockchain in this scenario offers the opportunity to maintain an immutable ledger, which shows not only where the device is but where it has been in its lifecycle, as well as other details like manufacturer, reseller, and the serial number. This also
    prevents devices from being lost and reordered, which incurs a significant cost increase. Moreover, medical device theft and shrinkage can be reduced drastically as no malicious user can delete or alter the details of the devices from the network.


Implementation of Blockchain technology in the healthcare sector may be a game changer for all the right reasons, however, in practice, the implementation might not be as easy as it sounds. Some of the hurdles include:
  • Uncertainty or lack of knowledge: The Blockchain concept is not widespread yet. Lack of successful blockchain models to follow has created an uncertain situation.
  • Storage Capability of the network: Blockchain within the healthcare industry will be dealing with medical records, prescriptions, images, documents and reports which require a significant amount of storage space. Theoretically, every member included in the chain should have a complete copy of the full medical record of every individual in the network and this volume could eventually exceed the storage capacity of current blockchain technology. Such a situation might turn out fatal in the long run.
  • Lack of Ownership of data: The primary concept of blockchain is decentralization which means there is no central authority or ownership of data. Will this be viable when it comes to the handling of sensitive medical data?
  • Cost: The cost of establishing and maintaining a healthcare blockchain is uncertain yet. Most healthcare providers will want to know about the expenses ahead of time, should they consider implementing the technology.
  • Non-wilingness to share data: There are a number of entities in a blockchain from doctors to insurance providers. Without a streamlined system, it would be challenging to pull all these entities together to adopt blockchain as a technology. If some of the players are resistant and do not adopt it, the purpose of the entire system will be questioned.
  • Rules & Regulations: There are no solid laws laid down to regulate or address the use of blockchain in the healthcare industry. It is also uncertain as to how new policies regarding healthcare blockchain will conform to the current privacy regulations of each country.


The future of blockchain for healthcare sector highly depends on the acceptance of the new technology within the existing healthcare ecosystem in order to create the required technical infrastructure. Though there are a number of hurdles to be crossed while integrating Blockchain with current systems and its cultural adoption, the technology is still finding popularity in the healthcare sector and many solutions are being developed to adopt it. With an increasing number of potential use cases and possibilities, and industry persons showing the willingness to invest in the technology, blockchain sure does have a future in the healthcare scenario.


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