Answering Healthcare challenges with Smart Contracts

In the previous article, we discussed the possibilities of blockchain application in the healthcare industry. Overall, we reviewed blockchain networks and their extensive applications in the healthcare industry. We focused on the advantages of blockchain and how those advantages could be leveraged in the healthcare sector. This article will predominantly focus on the challenges faced by the healthcare sector and how the use of blockchain’s smart contracts can solve these problems.

Before delving into the intricacies of smart contracts and blockchain we should first examine what they really are. Smart contracts are blockchain based protocols that facilitate the verification, enforcement, and performance of digital transactions. Smart contracts allow transactions to take place even in the absence of third parties.

As the world’s population continues to grow daily, the healthcare sector has been faced with a myriad of challenges from an increased number of patients, drug counterfeiting, middlemen, and administrative inefficiencies. Smart contracts and decentralized applications can be used to solve these challenges by facilitating secure and private transfer, retrieval, analysis and management of healthcare-related data and information.

Challenges in the healthcare sector

Data security and integrity

With an increased number of patient volumes, we have witnessed a significant strain on the side of healthcare providers. Managing of Patients Health Information, health records and Data from IoT devices has become an uphill task for medical practitioners and Health centers. The data stored therein has been vulnerable to breaches by malicious persons, in some cases patients health data has been stolen for marketing purposes.

Additionally, there have been several cases of fraud and manipulation of patients data and the health systems by unscrupulous individuals. Statistics from the FBI indicate that American taxpayers lose over $80 billion annually to medical insurance frauds. Billing for services not rendered, excessive services and duplicate claims are some of the most notable instances of insurance frauds.

Administrative inefficiency

Public health sectors in most countries around the world are administered with gross lapses and wastages. A 2011 study shows that the average US hospital spends nearly a quarter of its budget on billing and administrative costs. Cases of high readmissions, delay, and lags, poorly managed patient flows, and poor communication further helps to portray the massive inefficiencies in healthcare administration.

Patients spend a lot of time in hospitals making appointments, chasing down records, filling out forms and refilling prescriptions. On the other hand, physicians and nurses spent over 8 and 20 hours respectively filling up paperwork and conducting administrative tasks.

Smart contract solutions


Telemedicine is a growing field of medicine that allows the physician to reach patient through the uses of electronic devices such as Wearable Body Area Networks(WBANs), mobile phones and other IoT devices. Telemedicine is predominantly used in providing care for chronic health management, prescription compliance and collating real-time measurements of patient’s conditions. These advancements are largely helpful in increasing interoperability, reducing administrative inefficiency and enhancing patients outcomes. The downside, however, is that these mechanisms provide a lucrative target for hackers.

To ensure the safety and privacy of patients information and other important clinical data, smart contracts come in handy. Smart contracts can be implemented on a consortium owned blockchain to analyze, aggregate and share the data. Smart contracts can help maintain data in an immutable state. Overall smart contracts will ensure patient data is stored securely in a reliable and transparent manner.

Increased interoperability and reconciliation

Smart contracts will also allow health records and information of a patient to be stored in a digital ledger. Patients can move from one hospital to another without having to fill numerous forms since they can allow preferred physicians to view their health records on the blockchain network. Tracking of patients treatment activities for purposes of insurance payments will also be increasingly streamlined using smart contracts. Ones the network is notified of a consultation or operation it immediately releases payments to the appropriate entities. Additionally, smart contracts will help in facilitating standards and regulatory compliance. Changes to the standards and procedures can be instantly updated on the blockchain network without much hassle.

Overall smart contracts and blockchain represent the future of healthcare and medicine. While the technologies are in their nascent stages there is no doubt that they empower patients and provide them with diverse capabilities and rights. Smart contracts embrace high-level encryption and security, users can, therefore, rest assured that their information is confidential, safe and attack-proof.