Why Healthcare needs the Blockchain

A prescription for a sick ecosystem

sherpa protocol
Medlanes
9 min readJul 30, 2018

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Source: Shutterstock.com/ karpenko_ilia

The challenges from asymmetries and inefficiencies in information access have led to the healthcare ecosystem we encounter nowadays. Healthcare costs are rising over time and the highest quality treatments cannot be accessed by the the majority of the world’s population. No wonder, that the blockchain technology is one of the hottest topics in healthcare, promising to solve a number of critical obstacles.

By implementing a blockchain that connects the key stakeholders like governments organizations, insurance companies, associations, hospitals, healthcare practitioners and providers as well as end users a fundamental impact on the worldwide industry could be experienced. How is this possible?

In this piece of content you are just reading, we are highlighting the key benefits of the blockchain, which enable the health sector to cure itself of its major plagues. We are going to describe the benefits of the blockchain technology from the perspectives of different stakeholders:

  • Which benefits would doctors experience from making use of blockchain technology?
  • In which way would patients be able to make use from the implementation of the blockchain?
  • How would healthcare companies benefit?

Medical Data Management

Can the blockchain succeed, where EHRs have failed?

The new era of information flow in digital health care is highly driven by Electronic Health Records (EHRs). EHRs are digital patient records that can be made available for and shared by authorized users. EHRs are extremely valuable because of containing the medical history of a patient as well as past treatments. But there are a couple of disadvantages and pitfalls of EHRs that have been discussed in the publicity for a long period. They can potentially be solved by the blockchain technology:

Information asymmetry

Critics bring in that one of the main issues of EHRs is information asymmetry. When one identical procedure or test has been done several times, without different doctors knowing it, we speak of a problem of asymmetric information, where one party has more information than the other. This is what frequently uses to happen in the current EHR system.

Today’s EHRs often are controlled by one doctor or company, such as a hospital network, which causes problems in the availability of health data to patients as well as doctors. There is no single EHR, but rather several EHRs used in different medical fields. Therefore different ways of entering and changing data exist. Right now every time a doctor sees a new patient, a new medical record is created within the EHR used by that provider’s healthcare practice. With this, EHRs are causing a lack of information about the medical patient information, leading to higher spendings through inappropriate or duplicate tests and procedures. The consequence: High health risks for patients and poorer outcomes.

Using blockchain technology, the entire data could be hooked to one ledger. There can exist multiple addresses as well as multiple keys, but they will all yield to a single patient. All existing data about a patient could be saved on the blockchain and Ethereum-based smart contracts could be used to persevere treatments taking place at the agreed time. This could lead to patients and doctors canceling less appointments as well as less no-shows.

Interoperability

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At the moment EHRs are lacking interoperability, which is in its core the agreement on a common system for all repositories of information to interact. It is necessary that all systems can communicate with each other to successfully gain holistic images of patients. As well, data must be available and needs to be transferred from one source to another. Blockchain can be the answer to poor interoperability of medical health records. By working on a decentralized, encrypted ledger, any entity is able access and add information, in case given the right permission. Because no one owns this system, there is no need for cooperation between system owners. Blockchain could allow different entities to share and agree on a patient’s medication data. This is also what is called a “single source of truth.” Using the blockchain technology EHRs systems furthermore could be open to accept data from outside resources. The blockchain network can be shared with authorized providers in standardized in a secure manner, eliminating the cost and burden that is associated with data reconciliation.

Security & Privacy

Before introducing EHRs it was extremely difficult to transfer information to different providers of the healthcare ecosystem. Now with the digitization of patient data, cyber criminals are increasingly targeting EHRs to steal valuable patient data. Many providers have been forced to adapt EHRs, even though they haven’t been able to invest into the protection of the software. Hence healthcare technology is often outdated and vulnerable to attacks. The personal information is lucrative for cyber criminals and e.g. fake ids or medical data is sold in underground markets.

Making use of the blockchain technology for EHRs, the healthcare industry could profit from a higher security and privacy of data. Blockchain employs cryptographic mechanisms to validate transactions, adding an important level of trust to the data sharing. That way a secure solution to digitally collect and transfer medical histories is offered, additionally unusual activity can be identified. Companies could quickly react on hacking attempts to minimize damages. Using the blockchain all activities regarding patient records could be monitored. Blockchain solutions have the potential to be the infrastructure that is needed to keep health data private and secure while reaping the benefits of connected medical devices.

How likely is it that the blockchain is going to replace today’s EHRs?

Today the healthcare system is far away from an established blockchain standard for EHRs. There are discussions ongoing, if the use of the blockchain for EHRs is a hype or a problem solver. On the other side of the table it is evident that at some point no one will tolerate today’s EHRs anymore. As well the advantages of the blockchain sum up undeniable benefits. There is the reduction of admin time for doctors, fewer duplication in procedures and overall less confusion in the healthcare ecosystem.

Supply chain integrity

Is the blockchain the solution for major weaknesses?

Counterfeit and theft drugs are a growing concern. Pharmaceutical companies are losing billions of dollars every year due to counterfeit drugs. According to the WHO about 10% of the drugs sold in developing countries are counterfeit. As well medicines worth $33 million are stolen due to cargo theft each year in the EU markets. Another issue is that external actors may modify data by adding or removing drug allergy information in a way that is not trackable.

With the blockchain we would see an immutable record of changes that afterwards could be examined in regard to historical changes. This also means, that historical records of products can be maintained to detect counterfeit and substandard products to identify the responsible party. The blockchain would securely bring together manufacturers, distributors, hospitals and pharmacies and hence every step in their supply chain could be authenticated leading to transparency and ensuring medication origin. Using blockchain technology pharmaceutical products can be tracked through their entire lifecycle. Furthermore smart contracts could automate the auditing of outsourced contract manufacturing processes.

Billing management

A smart contract is a distributed and instantly updatable agreement with a set of rules that apply to parts of the agreement. Being stored with all parties at the same time, all copies are updated simultaneously when a change is made by one party. Smart contracts facilitate a transition to value-based care, as payers would spend less time and money rectifying inaccurate payments.

Smart contracts would significantly reduce inefficiency in the healthcare systems and simplify the billing management. In addition, blockchain could reduce admin costs for billing by eliminating the need for intermediaries with automated activities and more efficient processing.

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Medical research & clinical trials

The power of aggregating medical data

After providing secure access to EHRs, the blockchain standard would be in a position to provide an incredible huge amount of data to clinical researchers around the globe while ensuring that this clinical data is valid. Researches would be able to gain population-level insight into treatments and outcomes. Bringing together the results of worldwide clinical trials and medical research so that new treatments could improve patient healing processes like never before.

Drug discovery research & development (R&D)

Currently it takes 10 years to release a new drug, not lately because time consuming clinical trials are necessary and fundings from investors are difficult to receive. Fundings are critical for a successful drug development while unexpected returns may severely affect funding opportunities. To improve the information access to investors in the early stage and at the same time tracking the ownership of proprietary information, the blockchain could be the suitable solution. By being able to securely share information on the blockchain across investigations, pharmaceutical companies will be able to access recent information on trial progress and facilitate new modes of collaboration. By unlocking the potential for multiple parties to collaborate on problems, the time for new drug development could be shortened. As well the blockchain could facilitate new drug development by making patient results more widely accessible.

Connecting the internet of medical things (ioMT)

By working together and empowering the exchange of information with wearable devices, patient-generated data could be aggregated and provided to researchers and clinicians. It is widely known that interconnected devices are being used to gather data like blood glucose levels, brainwaves, cardiograms and body temperature. Unfortunately, especially the data integration from multiple devices so far has been an obstacle for the successful deployment of the internet of medical things (ioMT), which the blockchain technology could overcome.

Patient centric medical data marketplaces

Today’s centralized marketplaces pitfalls are mostly related to the lack of trust. The blockchain is build to recreate trust and transparency. A single blockchain approach would allow patients to become the owners of their data. The tokenization of health data could enable people to generate value from their health information and being able to pay for health services. There are already models in which people can gain cryptocurrency tokens in exchange for health data. Existing set-ups create an incentive structure for patients, in which they can decide which data to share and whom to share it with. In order to do so patients must comply to digitize their health-related data and make them shareable. Then information seekers then have the opportunity to buy this data in exchange for tokens. One of the widely discussed examples in this field is the selling of genomic data via the blockchain. Since today it is cheaper and faster than ever before to explore the human genome, companies such as 23andme, Ancestry.com and Helix are entering the market, offering information to customers eg. about their ethnic descent through analysing and selling their genomic data.

Challenges & conclusion

The future of the blockchain in healthcare is exiting. We have pointed out, that there are four areas in today’s healthcare system, that would profit from the use of the blockchain technology: Medical research & clinical trials, Billing management, Supply chain integrity and Medical Data Management. The blockchain technology can improve data aggregation and is able to solve weaknesses of the healthcare supply chain. Not at least the blockchain has the ability to succeed where today’s EHRs have failed. While pointing out all of the positive aspects, there are the following obstacles e.g. in terms of immutability, transparency, costs and value fluctuation to be mastered:

Immutability

Immutability means that once data has been written to a blockchain, not even a system administrator, can change it. Therefore the blockchain, and especially the use of the blockchain in healthcare, is causing data privacy issues, while not even a patient could delete data from it.

Transparency

Transparency of a public blockchain needs a complex solutions to guarantee the data privacy of the patients. One basic solution is to encrypt files before storing them on the blockchain, and then keep the private encryption key offline.

Collaboration

The successful deployments of the blockchain will likely depend on the collaboration between all stakeholders like e.g. large healthcare systems, technology vendors as well as patients.

Costs

In comparison to a server application, the blockchain is 1.000.000 times less efficient than a centralized server application.

Value fluctuation

Payment solutions currently can’t rely on fluctuating cryptocurrency. Future solutions are stable coins, of which there is a small number already on the market today.

Transactions limits

The blockchain is not reliable yet for high volume use. Because all computers on the network must record every transaction, there are limitation in regard to how much data blockchains are able to process. So far there does not exist a solution proven to work.

If you want to learn more about the use of the blockchain technology in healthcare we highly encourage you to read the following articles, which you can find reading our SHERPA Medium Account or following SHERPA Protocols founder Erik Stoffregen:

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