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Why Healthcare Industry requires a Blockchain Solution?

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Blockchain Healthcare

Blockchain technology is all set to disrupt not just one or two industries, but the entire landscape of how business operations are run. Just like any other industry, the healthcare industry also requires innovation with blockchain implementation to bring transparency and privacy to the health ecosystem. 

Around 200 healthcare executives were interviewed in one of the surveys; 16% of them are expected to have a blockchain solution. Maintaining and securing healthcare data within the healthcare and supply chain management are the significant use cases of blockchain in the healthcare industry. 

Compared to ten years back, hospitals still function the same way. The reason is the lack of innovation and transparency. However, saying that innovations have never been done in the health field can be wrong. 

The lack of innovation here does not mean the lack of technological aspects. But it means the technological trends introduced a few years back need to be upgraded with new innovations. 

Blockchain could be the next level of innovation for the healthcare industry. Almost everyone is aware of blockchain technology and its potential to transform various industries. Before you understand its impact on the health industry, let's discuss what is blockchain

A blockchain is a time-stamped chain of blocks containing immutable records of information managed by a cluster of computers or nodes, not just by a single computer or user. Each block of data is secured and linked to one another with the help of cryptographic principles. 

Some of the reasons why blockchain gained a lot of popularity:

  • It is decentralized and hence not owned or managed by any single entity.
  • Since the blockchain is immutable, no one can alter or tamper with the data stored inside it. 
  • The blockchain is transparent and allows everyone within the network to track the data with full security. 
  • The data is cryptographically stored in the blockchain. 

Multiple computers running within the network own a copy of all the data kept in the blockchain. Every time something is updated in the blockchain, all the nodes get a notification. 

Interoperability is one of the big challenges in the healthcare industry. Blockchain can improve the problem of interoperability in the healthcare industry for patients, policymakers and providers. The two major areas where the issue of ineffective interoperability occurs are information blocking and trouble of identifying patients. 

Problems existing in the health industry

Many people consider that assigning a unique patient identifier can solve the challenge of inconsistent patient health records that has resulted in various errors in patient care. Explaining the problem, the Director of Center for Biomedical Informatics, Shaun Grannis said:

Matching the correct individual to his or her health data is critical to their medical care. Statistics show that up to one in five patient records are not accurately matched even within the same health care system. As many as half of the patient records are mismatched when data is transferred between healthcare systems.”

I will address these issues in the article and answer how blockchain can solve it potentially. Before that, let's look into more problems that exist in the health industry. 

Information blocking is also one of the major problems in the healthcare industry. Information blocking is stated as  "an unreasonable restriction on the exchange of electronic health info or patient's data." 

Blocking of information can happen due to policies that restrict the information sharing and practices that make exchange impractical. The significant reason behind this is that the hospitals never want to lose their patients and don't want to send their patients to another hospital for treatment. 

According to the research, information blocking problem can be resolved by enhancing transparency so that every action taken by the participant could be accounted for. Also, a better relationship between hospitals, health IT companies and HIEs. 

Blockchain can overcome all these issues with its potential to store immutable records in a secure yet transparent way. 

You need to understand different types of blockchain permissions before adopting blockchain in the healthcare ecosystem. 

Following are two types of blockchain permissions that you may need for building a healthcare ecosystem:

  • Public Blockchain
    Public Blockchain is a completely open ecosystem where any user can participate in the network. Public blockchain networks also an in-built incentive mechanism that rewards users for contributing to the system. Since medical institutions handle sensitive and highly-classified data, they would not want anyone outside their circle to manage or interact with their data. 

    Therefore, public blockchains can be impractical for the healthcare ecosystem.   

  • Private Blockchain 
    As the name suggests, private blockchain ensures privacy by allowing only specific parties or participants to take part in the system. It is not open to everyone. People willing to participate in the private blockchain network should have permission to be part of it. That is why it is also called as permissioned blockchain.

    Private blockchains are designed specifically for enterprise requirements and offer features like privacy, high security and fast transactions. Specific participants are granted permission to access the ledger and have a copy of the updated ledger at all times. 

    With a digital solution based on a private blockchain network, healthcare institutions can manage multiple tasks, including health record keeping, clinical trials, health insurance services, financial services. 

Let's discuss some of the use cases of blockchain in the healthcare industry that implies why blockchain could be an innovative solution for the health ecosystem. 

Use cases of Blockchain in Healthcare:

Drug Traceability 


Drug counterfeiting is one of the biggest problems that exist in the pharmaceutical industry. According to some research, it was found that around 60 Pfizer medicines were being counterfeited as of 2014 and WHO has estimated 16% of counterfeit medicines comprise of the wrong ingredients. 

healthcare blockchain1
Image Source : LeewayHertz

The blockchain's security feature can help provide drug traceability throughout the supply chain of pharmaceuticals. Every new transaction added to the block is timestamped and immutable, enabling the product tracking and ensuring no information gets altered. Private blockchains managed by the central entity can ensure the fake drugs are not registered. 

A company's access to that specific private blockchain for drugs would ensure that the produced drugs are authentic. Pharmaceutical companies have to decide actors of the supply chain who act as miners. These actors could be distributors, retailers or manufacturers. 

When a drug is manufactured, a hash is produced that contains important information about the drug. Every time a drug moves from one hand to another, the information gets stored on the blockchain, making it easier to track the drug. 

Clinical Trials 

Clinical trials are designed to the effectiveness of a product on a group of patients in the pharmaceutical industry. Because of the importance of results on clinical trials, frauds are so common. However, it is not easier to evaluate its frequency.  

Blockchain can offer proof-of-existence for any document and enable anyone to check the authenticity of the documents. To add new data in the form of transactions, most of the nodes have to come to an agreement that transactions are valid.

Registering and adding the document for clinical trials to the blockchain can bring trust and transparency in the system, thereby protecting the personal records of a patient. 

To know the impact of blockchain in healthcare, you need to get in touch with a blockchain development company like LeewayHertz who can help you understand how blockchain based solution can benefit your specific use case. 

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