Healthcare Use Cases for Blockchain Technology

Healthcare Use Cases for Blockchain Technology

Healthcare Use Cases for Blockchain Technology 860 484 Avalon Health Economics LLC

Recently, the crypto-currency company Bitcoin has been in the news, mainly for its combination of volatility in valuation coupled with its impenetrable technological foundation.  The virtual currency is perhaps the most well-known application of a technology now commonly referred to as “blockchain.”[1] Each time those Bitcoin stories run, many of us again ask ourselves “what exactly is blockchain anyway?” According to Mackey et al., when used in the healthcare context, “at its core, blockchain is a new type of digital architecture, consisting of a shared, immutable ledger that can better ensure the resilience, provenance, traceability, and management of health data.” Put differently, blockchain is an electronic record of transactions and information that is decentralized, immutable, and secure.[1] Data “miners” validate encrypted transactions and record them on blockchain’s decentralized ledger. This distributed ledger eliminates the need for a third party to validate and store data, making blockchain much more secure and difficult to hack than a database of information stored in a single place. Blockchain technology also uses cryptographic techniques, identity linking, and unique digital signatures to ensure data security. Blockchain entries are tracked, immutable, and auditable, which protects data integrity.[2]

The defining characteristics of blockchain—security, integrity, and decentralized storage—make it ideal for use in the healthcare industry where rapid, secure information exchange is vital.[2, 3] Industry experts and stakeholders have identified five domains in which blockchain is likely to have a substantial impact: (1) interoperability (e.g., absence of standard patient identifiers, standard technology platforms, or standard coding languages); (2) medical records (electronic medical records, or EMRs); (3) supply chain (e.g., tracking and monitoring of medical devices and pharmaceuticals); (4) insurance (e.g., claims adjudication; fraud prevention); and (5) medical research (e.g., clinical trial enrollment; data management). There are many other healthcare uses for blockchain, but, most of the existing blockchain-based healthcare start-ups fall into one of these categories.[4]

Interoperability is one of the most promising advantages of blockchain technology because it covers virtually every aspect of health care. In medical care, interoperability refers mainly to the ways in which disparate diagnostic, treatment, and management technologies communicate with one another across applications and over time, but it also refers to the ability to track healthcare data using a common patient identifier. EMRs and other forms of automated personal health records have helped address these interoperability problems to an extent, but many blockchain start-ups have focused on addressing myriad problems unique to EMRs. For example, blockchain technology could offer a solution to the problem of EMR exchange. Currently, there are dozens of different EMR systems across the United States, which makes it difficult for physicians to quickly exchange critical health information between incompatible systems. A universal blockchain medical record system would solve interoperability problems and eliminate the current need to transition data between different EMR systems. In addition, blockchain technology can address the vexing problem of creating and tracking lifetime health records, and supporting the seamless “flow” of those records between providers and across state and country boundaries in our increasingly mobile society.[2] Blockchain has the potential improve medical record privacy, a problem which has also presented a seemingly insurmountable problem in the world of health data for the past three decades.[5-8]

In addition to medical records, the healthcare blockchain could securely store data collected by wearable devices (e.g., Fitbits, glucose monitors, etc.). Blockchain technology is also useful for non-medical information exchange, and could be used to track insurance claims and automate billing, which would significantly reduce billing-related administrative costs and curtail fraud. Blockchain’s security features, validation process, and unalterable record ensure data integrity and security. The technology also gives patients greater control over their medical records because physicians may only access a patient’s medical record if they are given a private cryptographic key. This creates a mechanism whereby the ownership of personal health data can be “transferred” back to the creator of those data—the patient. This is exactly the mission of blockchain-based companies like Hu-manity.

Blockchain also has applications in the pharmaceutical industry, and can be used to facilitate data storage in clinical trials and pharmaceutical research. The immutability of blockchain records may prevent companies from selectively reporting results and committing other types of clinical trial fraud. Blockchain can also be used in pharmaceutical manufacturing to create secure and auditable chain-of-custody and supply chain logs, which may help prevent counterfeit drug trafficking and reduce related revenue losses.

Though blockchain applications in healthcare show promise, the ideas discussed above are still largely hypothetical; there are a many companies with promise, but these companies remain largely untested in the fiercely competitive U.S. health care market.[3, 4, 9, 10] The infrastructure necessary to sustain a secure healthcare blockchain is still being developed as companies form consortia to build the blockchain. One key barrier to healthcare blockchain is regulation. In the United States healthcare blockchain technology must comply with HIPAA privacy rules, which require that health information must be completely secure and unidentifiable. Regulations in the U.S. often slow the pace of technology adoption in healthcare, so many blockchain startups are looking to prove success outside of the U.S. where blockchain adoption and implementation may be easier.

Another obstacle that blockchain startups must overcome is the problem of scalability and speed. As the blockchain gets larger, it requires more computing power to validate new entries into the blockchain. This additional computing power will increase the cost of maintaining the blockchain and slow the speed of information validation, potentially making real-time updates to medical records impossible. Finally, like all companies hoping to gain a foothold in the health industry, both in the U.S. and abroad, blockchain-based applications must prove their worth by conducting clinical and economic studies to develop evidence to justify pricing, reimbursement, and market access. Despite these challenges, companies such as Hu-manity, Healthereum, Simply Vital Health, Gem Health, and Hyperledger are developing blockchain platforms for different functions within healthcare. The success of these companies will irrevocably change how information is exchanged in healthcare.


1) Tapscott, D. and A. Tapscott, Blockchain Revolution: How the Technology Behind Bitcoin is Changing Money, Business, and the World. 2016, New York, NY: Penguin Random House LLC.

2) Siyal, A., et al., Applications of Blockchain Technology in Medicine and Healthcare: Challenges and Future Perspectives. Cryptography, 2019. 3(3).

3) IBM, Healthcare Rallies for Blockchains. 2016, IBM Institute for Business Value: Somers, NY.

4) Dimitrov, D.V., Blockchain Applications for Healthcare Data Management. Healthcare informatics research, 2019. 25(1): p. 51-56.

5) Bush, V., New data battle: state’s need to know vs. patient’s privacy. Mod Healthc (Short Term Care), 1975. 3(5): p. 60-1.

6) Ren, Y., et al., Data Storage Mechanism Based on Blockchain with Privacy Protection in Wireless Body Area Network. Sensors (Basel), 2019. 19(10).

7) Schairer, C.E., et al., Disposition toward privacy and information disclosure in the context of emerging health technologies. J Am Med Inform Assoc, 2019. 26(7): p. 610-619.

8) Vuori, H., Privacy, confidentiality and automated health information systems. J Med Ethics, 1977. 3(4): p. 174-8.

9) Mackey, T.K., et al., ‘Fit-for-purpose?’ – challenges and opportunities for applications of blockchain technology in the future of healthcare. BMC Medicine, 2019. 17(1): p. 68.

10)Zhang, P., et al., Blockchain Technology Use Cases in Healthcare, in Blockchain Technology: Platforms, Tools and Use Cases, P. Raj and G. Deka, Editors. 2018, Elsevier Inc.: Cambridge, MA.

(John Schneider, PhD, Katherine Dick, Cara Scheibling)