Blockchain: The Power Of Positive Disruption Within The Healthcare Industry

Four ways blockchain technology is predicted to transform healthcare


Digitization of the healthcare system, from instruments to electronic health records, has helped to advance the industry while also creating new challenges. One of the biggest challenges pertains to the access and protection of sensitive medical information. Blockchain, most commonly associated with its applications in finance, can be implemented to meet its challenges head-on, restructuring and standardizing the exchange of information.

According to IDC’s 2018 Worldwide Healthcare Industry Predictions Report, 20% of healthcare organizations are predicted to have moved beyond blockchain pilot projects by 2020, implementing the technology for operations and patient identity management. With use cases growing, healthcare executives see significant opportunities with blockchain, though they are concerned that regulatory requirements may hold back progress. Nonetheless, healthcare organizations are investing heavily into its application.

The Appeal of Blockchain

As a decentralized, distributed ledger of digital events that is difficult to alter, blockchain offers many appealing possibilities to the healthcare industry. A recent report by Deloitte notes that blockchain has significant potential to improve data interoperability, security, and privacy, and to advance the Department of Health and Human Services’ strategic goals and investments to standardize healthcare information.

The technology is able to address multiple industry pain points including the need for third-party trust organizations like health information exchanges, varying data standards, and inconsistent rules and permissions. Blockchain is not a silver bullet, but it does hold the promise of greater efficiency, reduced costs, and improved patient services.

The Benefits of Blockchain

The application of blockchain in healthcare is still in the early stages of development, but it is envisioned to solve the following recognized industry challenges:

Medical Data Management

Blockchain’s ability to streamline the exchange of data across authorized parties can be applied in healthcare to enhance the management of electronic health records (EHRs). Current health information exchanges (HIEs) are hampered by a number of technology issues, including the need for an intermediary trust network, data interoperability issues and inconsistent rules and permissions. These issues prevent the safe transfer and sharing of data. Consequently, health data remains siloed, increasing administrative burden and possibly reducing quality of care since not all data is easily accessible to patients and their healthcare providers.

One of the benefits of blockchain is that it can solve these issues without obsoleting existing electronic health record (HER) systems. Healthcare organizations can build blockchains based on data pulled from existing databases, creating a complete data picture and single source of truth.

This opens the door for a patient-mediated health information exchange that would restructure current HIEs. Patients would be the owners of their own data, accessible to each individual via the blockchain’s private key mechanisms. Patients could share this data with whomever they choose within their healthcare team. This would give patients and the caregivers of their choice a longitudinal history of their health.

Data Privacy

HIPAA compliance requires strict adherence to guidelines designed to keep personally identifiable information (PII) and personal health information (PHI) private and secure. HIPAA also limits how and under what circumstances this data may be used without patient authorization. A blockchain solution could assist with HIPAA compliance by segregating and encrypting patient identity, PII, and PHI into discrete units, accessible at any time by those who have authorization to do so.

There’s another significant advantage. Because blockchains establish a trusted audit trail that can be verified in real time, they are an ideal platform for regulatory compliance. Blockchains don’t merely track compliance; they also streamline enforcement and discourage fraudulent behavior from the beginning.

That’s because, rather than the typical enforcement method of occasional spot inspections, blockchain can be used to create 'smart contracts' whereby the appropriate parties are notified of non-compliant events in real time. Privacy regulations, then, can be automatically enforced. In addition, organizations can keep a record of who has shared data and with whom - without revealing the data itself.

Medical Research

There are two ways blockchain can assist with medical research. The first is with clinical trial data. The COMPare Trials Project found that out of 67 trials they examined, only nine were correctly reported; 354 outcomes were not reported, and 357 new outcomes were silently added. This casts doubt upon the accuracy of medical information derived from clinical trials and the resulting care that patients receive.

To create transparency and trust, those conducting clinical trials could use blockchain to record and time-stamp each event in the trial’s protocol. This would prevent selective reporting, ensuring that reporting of trials is correct and not 'spun' to achieve the desired outcome.

IBM notes that clinical trial records on interoperable blockchains would increase the universe of available trusted data. This leads to the second way blockchain can help with medical research. Healthcare organizations could, with patient permission, put data that is not protected health information or personally identifiable information into a national blockchain 'layer.' Information about age, gender, medication reactions and so on would further add to the total population health data that researchers and healthcare providers use to improve trial design and overall patient care.

Billing Management

Innocent inaccuracies due to complex billing procedures are a reality, but intentional medical billing fraud is a serious issue. In July 2017, a Medicare fraud task force charged more than 400 people, including dozens of doctors, with defrauding the government of $1.3 billion. Current processes are incapable of detecting all instances of fraud.

Blockchain’s security and auditability make it an ideal choice for claims adjudication and payments processing. Its decentralized trust model could eliminate the need for intermediaries, which would reduce administrative overhead and speed up the payment process. Smart contracts (mentioned above) could automatically catch billing anomalies and trigger payment of legitimate claims using sophisticated, customized algorithms.

The Future of Healthcare

These are just four of the many ways that blockchain can transform the healthcare industry. While the technology is still in early stages of development, blockchain is here and its potential for disruption can’t be ignored. How providers and researchers interact with the possibilities of blockchain now will likely determine their longevity within a few years. From data security and compliance to reducing fraud to improved care and patient-owned health information, everyone stands to benefit from blockchain technology.


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