Revolutionizing Healthcare with Tokenization

The concept of data tokenization has been around for several years now. However, it is not until recently that the idea gained widespread application in the healthcare sector. In the healthcare sectors, Data tokenization simply refers to the process of replacing sensitive data such as PANs, ePHI, and NPPI with a unique and non-sensitive value. Tokenization allows users to access and retrieve data without decrypting or re-encrypting. Overall, tokenization is meant to enhance data integrity, security, and privacy. In this article, we are going to discuss some of the issues facing the healthcare sector and how tokenization can resolve these issues.

Healthcare issues

The global healthcare system today is tragically broken. The cost of treatment and equipment continues to increase each passing day. Governments are spending over 20% of their GDP on health care, as the global population continues to escalate the burden will be even bigger. Traditional management systems have failed to deliver the much-needed outcomes. Additionally, due to the presence of several High Deductible Health Plans(HDHP) and growth in technologies users have grown accustomed to certain payment standards. Providers are now faced with the double challenge of not only providing affordable care, but also convenient and secure payment methods.

Besides, cost and payment methods, the healthcare sector is further faced with challenges of security and compliance. According to reports by PwC and Transparency Market Research the digital health market is poised to rise to the tune of $61 billion in 2020 and $536.6 billion by 2025. While this presents a massive opportunity for growth, it also presents an equally massive security risk. Further, complicating the equation is the increasing need to ensure regulatory compliance with agencies such as the HIPAA and PCI DSS.

How can tokenization be used to improve the healthcare system?

Tokenization can help reduce the cost of medical treatment by transferring the power to hold and own data from intermediaries; such as insurance companies/organizations, hospitals and pharmaceuticals to the patient. In the current system none of these holders share their information with patients, neither are patients allowed to verify the accuracy of the data. Through tokenization, patients and the general public are allowed to hold their data and share it with whoever they wish. Upon sharing their information with research institution patients can then be rewarded with tokens which are used to offset hospital bills.

The ANSI and PCI have endeavored to develop standards and guidelines for tokenization. These standards will help in ensuring compliance with aspects of inventory management, physical access control, and penetration testing. Additionally, tokenization will help in mitigating the cost of breach notification as specified by the HIPPA. A token alone does not represent ePHI, and therefore if the token is stolen, the argument can be made that no ePHI was stolen.

Tokenization will also help in automating of payment collection. Besides, tokens being a safer and secure way of making transactions there will simplify the payment system. Providers can create customized systems to collect payment regularly within a scheduled period of time. Providers can also develop tokenizable portals that that will facilitate consumer communication, creating a streamlined and consumer-friendly platform.


There are several projects which have been developed or are being developed to implement tokenization in the healthcare industry. One of them is the Swiss-based HIT foundation. HIT is exploring ways in which health care data can be tokenized to adopt a bottom-top approach, which is projected to lower cost of healthcare. HIT COO, Elizabeth Chee, further opines that tokenization will aid in enhancing transparency and curbing fraud in the industry.

Other startups such as Hu-manity, TimiHealth, and Emrify are also exploring blockchain tokenization to place patients at the center of the healthcare ecosystems. The companies aim to provide incentives(tokens) for users who are willing and able to share their data with research institutions. Overall, this model will benefit both the patients and the researchers since the patient will be rewarded and the researchers will get more accurate information.


Over and above, tokenization of health data is vital in streamlining payment systems, reducing costs and helps to build patient-centric systems. The world is quickly waking up to the immense potential of this technology. With the numerous challenges facing healthcare, we simply cannot afford to wait any longer for tokenization of healthcare to disrupt the status quo.