Why Medical Credentialing is the most important blockchain use case for the Healthcare industry right now

Cris Torres Fernandez
9 min readMar 24, 2020


When we build interconnected systems we need a core understanding and focus on identity before addressing other issues. Medical credentialing is the perfect place to start in healthcare.


Medical credentialing is a lengthy process that often takes between four to six months to complete.

To complete their credentialing, practitioners need to confirm many details such as:

  • Board certification
  • Academic background
  • References
  • work history
  • Background checks
  • Immunization history
  • Additional sub-industry & regional requirements

This process takes months as it involves contacting several entities and institutions. To be precise, the National Association of Medical Staff Services (NAMSS) estimates that most physician credentialing takes more than 120 days, while health plan enrollment takes 60 to 180 days.

On top of this, PwC reports that each physician in a practice submits an average of 18 applications for credentialing each year. That requires 80 minutes per application; including 69 minutes of staff time and 11 minutes of physician time per physician. Payers then spend time and money verifying these claims. Providers need to await medical credentialing to get reimbursed for their work and hospitals lose on average $7,500 daily waiting for their medical personal credentialing to be cleared and for the enrollment into an insurance program to be completed.

Furthermore, The Council for Affordable Quality Healthcare estimates that payers spend more than $2 billion a year maintaining provider databases, 75 percent of which could be eliminated by establishing a single source of truth, such as a blockchain.


It is no secret that medical credentialing is an immensely labor-intensive, time-consuming, tedious, and costly process, and so it comes without much surprise that tech companies and medical providers are looking to tackle this unavoidable process with the use of technology.

Currently, most hospitals and healthcare facilities dedicate entire departments to ensure their providers have the requisite credentials, while medium-size clinics or practices may have only one person dedicated to the process. Unfortunately, singular physician’s practices are left to do the credentialing work themselves.

To complete the credentialing process institutions and professionals must choose to 1) dedicate in-house staff to contact licensing institutions and other agencies, 2) hire a third party or 3) use CVO (credentials verification organization) or credentialing software.

Cloud-based credentialing software has become the preferred option for many institutions looking for a faster and more cost-efficient medical credentialing solution. These systems, however, still rely on unidirectional and repetitive medical credentialing processes; not to mention the security concerns that arise when information is solely stored in a direct access cloud.


To counteract these concerns, blockchain technology arises as a breakthrough proposal with the potential to cut time, costs, and the convoluted nature of the current system while keeping security and privacy at its core.

Nevertheless, a possibility is not the same as a solution; it is key that professionals and institutions choose the right perspective when applying the technology to make sure the potential within blockchain reaches its peak.

When we look at the credentialing solutions being proposed we find two main perspectives; one focused on institutional standards and another focused on patient data. Yet for an issue that has everything to do with the ability to prove one’s identity in a low-cost and hassle-free manner, there is no solution that clearly places the providers’ identity at its core.


Instead, what we see is various companies trying to create a “standard” credentialing process by proposing a single blockchain where records are stored and shared by multiple stakeholders. Such large, permissioned blockchains, however, can be costly and difficult to implement; especially when the benefits of recording the data in such a standard may not reap any long term benefit.

Furthermore, one singular private blockchain -both in terms of permissions and business ownership- for all the actors in the industry is highly unlikely to be adopted at all. Hence, this approach just leads to the creation of multiple permissioned blockchains, or multiple standards, that defeat the purpose and potential of the technology.


On the other hand, we see blockchain projects working to improve the ability of patients to find access to appropriate care. For example, Humana and UnitedHealth Group working on a project with Mutiplan and Optum, which tangentially — but not directly — touches the core need for proper identity management on the blockchain by requiring keeping up-to-date records of the licenses and qualifications of dentists and other practitioners. -


While a blockchain for a specific use case is the step in the right direction — the fact that licensing institutions and agencies — core to medical credentialing — are not at the center of Humana’s solution creates an unnecessary layer of complication similar to the projects which try to set industry-wide standards. Ultimately, this lack of focus around practitioner identity will limit equitable, real-world adoption of the solution.

We believe that strong, flexible, and low-cost identity management should be at the core of most blockchain health industry use cases. In order to reach the potential of blockchain for medical credentialing, we need a multi-directional ecosystem where a solution like BlockApps STRATO can act as the glue of a network where participants utilize and pay for services commensurate with their role & size.


A medical credentialing network on STRATO utilizes blockchain technology to simplify the process for all parties involved and align incentives so that all parties can get back to what really matters; saving lives. Compared to other blockchain credentialing networks, the STRATO network places more emphasis on ease of use and cost-effectiveness for ALL parties.

The heart of medical credentialing via STRATO is enabling a decentralized identity based on verifiable claims; claims that can be verified as authentic through cryptography as opposed to databases of questionable reliability.


With a decentralized identity, we can verify the identity claims of both people and institutions without the need for multiple centralized systems of identification.

From the start of their medical career, a provider will be able to build a wallet. While we traditionally think of cryptographic wallets as a place to store cryptocurrency, with STRATO they can actually be used to store any type of digital asset including a credential — much like their analog counterparts!

As soon as a provider gets their first physical credential (their degree) they will be able to make a claim for it from the university institution, which will be the only actor able to issue the claim.

When Mary (our new graduate for the sake of this example) logs into the STRATO network, the application will welcome her to not only store her education and residency credentials, but also her professional experience; all in a fully secured and private manner. STRATO will then create keys and an empty wallet where she will be able to store her credential claims.

Wallets are based on the principle of encryption, where public and private cryptographic keys are used to “sign” contracts. Keys are unique to both the provider and the institutions. Private to sign and public to identify.

Each STRATO instance connects to the external world through a secure authentication layer that ensures security and convenience for its users. Additionally, Mary will have the option to add additional devices linked to her wallet. In this example, Mary decides to add her phone.

She will be able to install such an application and identify the device with its own set of private keys. She will, however, continue to use the same wallet. This way, if Mary loses her laptop or her phone, her wallet will still be functional and she will not have to go through any process to create a new wallet and reclaim her credentials.

If she preferred,, Mary could even create a paper agent and store it in a safe place. The document would contain her wallet and its content (public and private keys) on QR codes. This way, if her devices are lost or stolen, she can immediately reinstate her wallet in any device using STRATO and regenerate her keys.

Mary will use her wallet as a tool to establish multi-directional connections to receive and verify her credentialing during the duration of her professional life.


For her first professional claim, the university from which she graduates acts as the claim verifier. The claim, in and of itself, becomes a digital representation of the education claimed by her (the medical provider) via a smart contract.

The university uses keys linked to their decentralized identifier in STRATO to sign the contract so that it is tamper-evident and anyone who recalls it can validate that it was issued by the university. The provider has a wallet to hold their claims.

Mary sends a credential claim via STRATO using her own university credentials. The university receives it (and if correct) creates a credential offer. The offer defines the credential in itself, by including the type, the issuer (the same institution) and a revocation mechanism. The university sends the encrypted credential offer via the channel created in STRATO when Mary sent the credential claim.

STRATO then notifies Mary that her university is offering her a credential offer. Mary reviews it and if correct she accepts. When this happens, the credential contract is digitally signed by both parties using their keys. The contract also contains information about its genre and about its revocation mechanism.


Mary will then be able to use this credential asset to generate a credential proof every time she has to go through a new medical credentialing process in the course of her professional life.

Fields in the various credentials (represented by smart contracts) stored in Mary’s wallet are built to update based on agreed-upon conditions and processes. The parties responsible for verifying and updating such information can do so directly through the application or via API.

When an employer (e.g. Hospital) starts a new medical credential process, the provider (e.g. Mary) gives the employer a credential proof containing both the public key of the issuer and the public key of the wallet where the credential is stored. The employer just needs to access STRATO (via node or API request) and create a smart contract to verify the credential. This smart contract is separate from the credential. It first asks the provider to verify/launch the request.

Physician credentialing, which as stated before, can currently take more than 120 days, is reduced to an immediate verification process via the credential proof given by the provider.

But what about if a credential is revoked? In case a credential needs to be revoked by an issuer after it has been created, the issuer can trigger a revocation on a claim that has been issued by them. Nevertheless, the revocation will depend on the type of credential and might not necessarily mean “deletion”. For example, a doctor can have his license under probation and have limitations on performing certain procedures for a certain amount of time. His full license can be reinstated after passing the probation period.


Focusing on identity’s key role in blockchain networks, the STRATO Healthcare industry ecosystem leverages the full potential of a decentralized ledger to ensure that every actor in the process independently plays its part and benefits from this cost and time effective solution. Furthermore, the fact that STRATO can be deployed on-premises or through most major cloud providers including Google Cloud, AWS, and Microsoft Azure highlights the potential of this smooth and scalable solution.

To approach your healthcare blockchain application or use case the right way, we encourage you to visit BlockApps’ healthcare industry resource hub or contact with their industry expert Dr. Craig Recatto today.