Blockchain And Healthcare

Blockchain and healthcare

Although initially designed to support digital currencies, blockchain technology has the potential to disrupt many industries. One that has gained considerable attention is the healthcare space, in which the use of secure, decentralized digital ledgers could transform data exchange and enhance interoperability between organizations and systems.

Implemented effectively, this would mean improved patient care delivery, reduced costs, and operational efficiencies across many areas. Healthcare leaders and industry executives are excited about the short- and long-term implications of blockchain use and believe it could drastically improve existing processes.

Why Are People Excited?

Data Sharing & Interoperability

Today, health care data is held in isolation by organizations and systems, not individual patients. Data does not flow freely between providers, resulting in medical protocols that are disjointed when patients seek care from separate entities.

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Without a single source of truth available, providers don’t always have the full picture of a patient’s medical history and have to make decisions based on fragmented information. And with increased use of wearable devices and mobile medical apps, it is becoming even more difficult to capture all patient health information in one place.

Blockchain technology has the potential to enable a patient-centric healthcare system in which providers would have access to complete and unaltered medical records. Health data written to the blockchain would be “shared” on a distributed digital ledger, creating a level of interoperability not currently possible. Data could be exchanged seamlessly between organizations that would otherwise have to work through different data systems built by different vendors.

Personalized Medicine & Population Health

Blockchains could also unlock a new degree of personalized medicine where all providers, regardless of their affiliation or location, could care for patients with the most up-to-date information available. In addition to storing medical data, other variables — socioeconomic, demographic, and behavioral — could also be attributed to individual patient profiles, thereby helping care providers understand all of the factors that may be impacting personal health.

Because blockchains self-regulate, there is little chance of data corruption or manipulation. This not only carries implications for personalized medicine, but also creates exciting possibilities around population health. With blockchain technology, health data could be anonymously aggregated across systems and help experts study health trends across different population segments.

Security & Integrity

With their decentralized structure, blockchains are also a much more secure means of storing data. There is no single point of failure or organization to be hacked. All data written to the blockchain is verified by every participant, or “node,” in the network. This built-in accountability, combined with the immutable nature of digital “blocks,” ensures that data integrity is maintained.

Potential Areas Of Disruption

Blockchain technology has many potential applications within the healthcare industry. EHRs, supply chain management, and backend administration are all particularly ripe for disruption given their heavy dependence on trustworthy information exchange.


Although EHR adoption has grown significantly over the last ten years, interoperability is still a major challenge in a world where health data is owned by organizations and systems. Blockchains solve this problem and offer a much more attractive option for securely recording, storing, and sharing health data. Providers could better coordinate care, and EHR information would be incorruptible.

Supply Chain Management

At a high level, blockchains are expected to enhance much of how supply chain management is done. Supply chain management in healthcare is especially interesting given that the fraudulent distribution of pharmaceutical drugs and mishandling of medical devices puts patients’ lives at risk.

With blockchain technology, manufacturers and distributors could label and track product movement throughout the supply chain much more effectively. It would be harder for counterfeit drugs to reach the market as blockchain nodes would be able to instantly identify unusual activity. The same principles apply to medical devices and public health supplies. Blockchain-enabled identification and tracking of supplies would likely mitigate threats and prevent wrongdoers from jeopardizing the lives of patients.

Administrative Functions

Blockchain use would also create significant operational efficiencies for administrative functions as many processes could be automated. Smart contracts could be used to manage insurer payments and claims processing. Underwriting would also be much easier given that all of the necessary information that would need to be analyzed could exist in one place. Similarly to how blockchains could prevent fraudulent practices across supply chains, the technology could also help prevent bad actors from falsely billing for services that weren’t actually provided.

Blockchain Technology isn’t an Instant Fix

Blockchains won’t solve all of the industry’s challenges overnight. The complex nature of the technology, entrenched behaviors, and legal constraints all pose potential roadblocks. Experts agree that in the short-term, blockchain technology will likely complement existing systems rather than serve as a revolutionary cure-all.   

Successful implementation for any use case will require collaboration among all impacted stakeholders. Physicians, health systems, insurers, and government bodies will have to work together to successfully transition functionality away from legacy systems to distributed digital ledgers. Additionally, it’s possible that blockchains holding massive amounts of patient data could burden existing computer systems and networks and slow down transaction speeds.

Because information written to blockchains cannot be altered, organizations may also run into HIPAA-related compliance problems. Fixing erroneously written data or redacting information that should not have been shared may be challenging as these actions go against the core design of the technology.

Short-term Experimentation, Long-term Transformation

There is tremendous potential for blockchain technology to transform the healthcare industry. Many organizations are already moving in this direction and considering how distributed digital ledgers could be incorporated. Startups and pilot projects have cropped up all over the country to test specific uses across a variety of functions. Although system-wide transformation is likely a longer-term reality, the industry will see increased experimentation and development over the next several years.