How Blockchain Technology can transform the healthcare sector?

Sukant Khurana
Apr 27, 2018 · 9 min read

by Sayan Basak, Ravishankar Ramachandran, and Sukant Khurana

Sayan is a 3rd Year, B.Tech, Department of Polymer Science and Technology, Univeristy of Calcutta

Many people have heard a lot about the blockchain in frames of a cryptocurrency called Bitcoin; however, it can have a much wider use than a simple payment method, including various industries. So, how does blockchain actually work in the healthcare industry?

What is the block chain that everyone is talking about? It is a technology that creates immutable and distributable data records which are shared peer to peer between networked database systems. The technology records digital events in a way that does not allow for the data to be changed or recognized until it reaches the recipient. That is why the most significant advantage of block chain is the idea that data is theoretically secured and protected from data breach threats. With widespread and rapidly increasing use, this technology is of particular interest to financial organizations. According to data from the Silicon Republic, block chain startups raised $1.4 billion in 2016 and $1 million in 2017. The financial sector has already realized the benefits of using blockchain. In total, the banks that use this technology save $8–12 billion annually. Will medical organizations be able to benefit from cryptography? Blockchain opportunities for healthcare are plentiful and here, we will cover the future potential of this technology in the industry and consider current usage.

Advantages of Blockchain for Health Data

The blockchain era has already begun. Taking into account the fast progress in the development of new and more efficient healthcare record systems, wearable devices, and medical examination systems implementing artificial intelligence, cryptography will become an important part of the way hospitals work. There are, however, a few improvements still needed in order for seamless blockchain adoption across the entire medical industry. According to Hyperledger’s survey, 42.9% of healthcare organizations suppose that the interoperability of electronic health records will help for faster blockchain implementation; with 28.6% of respondents ready to use this technology in care settings today. So, what are the benefits of blockchain technology in healthcare?

Data Provenance and Integrity

With an ongoing increase in patient numbers, healthcare providers have to manage more and more health data on a regular basis. As the data volume increases each year, it becomes harder for hospitals and clinics to process and store information.

Data managed by medical organizations includes:

· Patient health information (PHI);

· Electronic health records;

· Data collected from IoT devices (Internet of Things) or monitoring systems; and,

· Medical insurance claims.

Secure information sharing methods, which allow both healthcare providers and their covered entities to verify the correctness of data, are crucial for ensuring proper medical services. This is where blockchain comes in useful, as one of its main advantages is data integrity. When information is recorded and encrypted, it becomes impossible to change or remove.

One of the blockchain approaches that allows for the secure recording and sharing of information is anchoring data to the public blockchain. This method involves generating a proof of data integrity. Using this proof, any user can verify the data timestamp without the need to rely on third-parties. This method allows users to:

· Verify PHI integrity;

· Perform unchangeable medical audits;

· Prove the integrity of clinical research results;

· Reduce audit expenses and ensure regulatory compliance; and,

· Ensure data safety.

HIPAA requires the usage of safe methods of communication between those who deal with PHI stored in electronic form. That is why data encryption plays a crucial role in ensuring data privacy and safety. Our team has a deep expertise in developing digital solutions for the healthcare industry. One of our projects is a HIPAA compliant online communication platform called MDChat that allows patients to securely communicate with medical employees and be sure they are protected from any hacker attacks.

More Secure Standards

Blockchain provides a more secure way to protect data than ordinary encryption. The new technology allows for the implementation of new standards in managing insurance claims, PHI, and medical records. It excludes intermediation in data sharing, when using blockchain. Such consortiums as Hyperledger help increase awareness of the advantages of cryptography and further explain how to use blockchain in healthcare.

According to the survey mentioned above, the main reason why medical organizations hesitate to use blockchain is the lack of knowledge around this technology. A quarter of respondents are still at the stage of education and exploration, which is why responsible state organizations should make the corresponding information more widespread among caregivers. Healthcare providers suppose that this technology must pass several milestones before any adoption is possible, including:

· Technical proof of concept (PoC) (65.4%);

· Security proof (38.5%);

· Privacy proof (34.6%); and,

· Regulatory approval (23.1%).

We can spend a lot of time wondering why caregivers hesitate to implement blockchain in their organization, though the answer is far simpler than it may seem: they simply do not know enough about this technology and its advantages.

Data Transparency

Besides disintermediation, data integrity and provenance, healthcare providers see transparency (55.2%) as one of the top advantages of using blockchain in their industry. To better understand this aspect, let’s consider how it works in the financial sector.

This technology provides a decentralized register of ownership by recording every transaction made through the system. It stores all details starting from the formation of a data block, and ending with any digits related to a specific transaction. Every device that is a part of the system stores a copy of this block. Before making a transaction, the system confirms whether a blockchain version coincides with another in the network. Therefore, each blockchain user can identify the owner of a particular data block at any time. Furthermore, the blockchain is not only a secure way to send money, but a fully protected data sharing method that widens its potential use in healthcare.

Blockchain in Healthcare: Usage

Caregivers feel quite optimistic about fast blockchain implementation, with 37.9% predicting that it will take only five years to adopt it across medical organizations. For now, these organizations and professionals need examples of blockchain, and how it can be helpful in their field. Here, we will cover examples of blockchain use in the healthcare industry, describing existing issues in the sector and considering possible solutions through the use of this technology.

Blockchain in healthcare examples include the following usage issues:

· Drug traceability;

· Data security in clinical trials; and,

· Patient Data Management.

Let’s consider each of them.

Problem: Drug Traceability

One of the most serious problems in pharmacology is drug counterfeit. According to the Health Research Funding Organization (HRFO), approximately 10%-30% of drugs in developing countries are fake. US businesses lose up to $200 billion annually because of drug counterfeiting; however, the main reason is not in counterfeiting itself, but, rather, that these drugs provide different effects than their traditional medicinal counterparts. They may not help patients at all, or may even be harmful and dangerous to a person’s health.

Blockchain-Based Solution

As all transactions in blockchain are times tamped and immutable, it is easy to detect fraudulent drug dealers. There are two blockchain types: private and public. Trustworthy healthcare blockchain companies have to register their products in the private system to ensure authenticity and the high quality of their medicines. Private blockchains are moderated by central entities, and the fact that a specific producer or distributor has access to the so-called drug blockchain is proof of drug authenticity. This is where blockchain transparency comes in useful. Once a drug is produced and moves from the manufacturer to retailer, the operational data is recorded on the blockchain. It makes it extremely easy to verify the whole path of the drug, and determine all chain links at any time.

Problem: Data Security in Clinical Trials

Clinical trials are used to determine the effectiveness of particular medicines which cure specific diseases. These tests can either prove or disprove an offered hypothesis. During clinical trials, researchers obtain and record a great deal of information concerning statistics, test results, quality reports, etc. Each scientist is responsible for specific research, making it difficult to control everyone. Those data can then be easily modified or hidden in order to change the whole outcome of the research performed. Criminals are interested in recording the results that are beneficial for them, even if the data does not coincide with the reality.

Blockchain-Based Solution

This technology allows users to prove the authenticity of any document registered in the system. It provides proof-of-existence by adding data in the form of the transaction and validating the information by all system nodes. As mentioned above, blockchain records immutable data. This characteristic will allow for the storage of results from clinical trials in a secure way, making it impossible to modify data. Two doctors from Cambridge University conducted a 2016 study to see how blockchain can provide proof-of existence for clinical trials. They found that comparing a unique data code, which is set by the system, with the original makes it possible to verify whether the data of clinical trials has been modified, thanks to the inner SHA256 calculator which generates a unique hash every time a modification is made to the data.

Problem: Patient Data Management

Patient data privacy is strictly regulated by the Health Insurance Portability and Accountability Act (HIPAA), and requires PHI to be totally secure. There is, however, another problem related to PHI: sometimes, patients need to share their medical records with third parties (e.g. with pharmacies when they need to buy specific medicines). So, how can blockchain help protect data while providing partial access at the same time?

Blockchain-Based Solution

The Blockchain creates a hash for each PHI block, together with a patient ID. Using an API, covered entities can receive the necessary information without revealing a patient’s identity. In the same way, a patient can decide whom to provide with access and whether this access will be either full or partial. Furthermore, a patient can set specific third parties that would have to give their permission for sharing the PHI, if the patient is not sure in what he or she is doing.

Blockchain has a tremendous potential of use in different industries, including healthcare. This technology has already become widespread in the financial sector, but medical organizations still hesitate to implement it into their IT systems. This does not mean, however, that there are no healthcare companies currently using blockchain. Below, you will find a short list of startups that have made this technology the base of their operational structure.

Blockchain healthcare startups:

· Guardtime (a blockchain-based system for securing patient healthcare records);

· Gem Health (an initiative that promotes blockchain-based collaboration in healthcare);

· Cyph (a platform for building secure digital identities and ensuring protected communication between healthcare providers);

· MedRec (a blockchain-based system for securing medical records management); and,

· Blockchain Health (a blockchain-based system for medical research management).

Blockchain is an effective technology that can help prevent data breaches in the healthcare industry. It is a secure and reliable method of recording, storing, and sharing sensitive data. Caregivers will definitely benefit from implementing this technology, while remaining HIPAA compliant with this method of trustworthy digital protection.


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Sukant Khurana

Written by

Emerging tech, edtech, AI, neuroscience, drug-discovery, design-thinking, sustainable development, art, & literature. There is only one life, use it well.

The Startup

Medium's largest active publication, followed by +681K people. Follow to join our community.

Sukant Khurana

Written by

Emerging tech, edtech, AI, neuroscience, drug-discovery, design-thinking, sustainable development, art, & literature. There is only one life, use it well.

The Startup

Medium's largest active publication, followed by +681K people. Follow to join our community.

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