Blockchain in Healthcare: Benefits, Use Cases, and Challenges

Best known for its role in cryptocurrencies, blockchain tech is now used in many industries, including healthcare. The use of blockchain in healthcare provides a new approach to addressing complex issues, such as data security and patient privacy.

Throughout this article, you’ll find how blockchain applications in healthcare can secure data, simplify paperwork, and give patients more control over their health information.

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What is Blockchain in Healthcare?

Blockchain technology is a decentralized digital ledger that records transactions across multiple computers, ensuring the data is secure, transparent, and immutable. So, if you ask, “What is blockchain in healthcare?”, it refers to the application of decentralized digital ledger technology for managing and sharing medical data.

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With cryptographic techniques to connect data blocks, blockchains create an immutable chain of records. It can provide a reliable framework for storing sensitive healthcare data and protect it from tampering or unauthorized access.

Benefits of Blockchain in the Healthcare Industry

Implementing blockchain in healthcare is powerful, as the technology offers significant benefits to the industry.

As you’ve got the answer to “What is blockchain in healthcare?” in the previous section, let's now explore its key benefits within this sector. Knowing these will help you illustrate how this technology can lead to safer, more efficient, and patient-centric systems.

The most prominent advantage is that blockchain tech can enhance data security and privacy, preventing data breaches and unauthorized access.

In fact, data breaches in the healthcare sector are a significant issue worldwide, impacting millions of people. In the first half of 2023 alone, more than 290 breaches affected 39 million individuals.

One of the breaches happened at Managed Care of North America (MCNA).

The investigation revealed that an unauthorized party infected its health systems with malicious code. It had accessed certain parts of the data and removed copies of the personal information of 8.9 million people, from patients to guardians and guarantors.

The types of compromised data varied from person to person. Still, these included personal details like names, addresses, and government-issued ID numbers, health insurance information, and information related to the dental and orthodontic care provided.

By implementing blockchain in healthcare, medical providers can create robust security using cryptographic encryption and decentralized data storage.

Cryptographic encryption ensures that the data on the blockchain is encoded to prevent unauthorized access. Each data entry is hashed, transforming into a unique code derived from the original information. This hashing process makes it difficult for anyone to manipulate the data without being detected.

With decentralized architecture, blockchain also helps eliminate single points of failure^[1].

In centralized systems, a single breach can risk the entire health database. However, blockchain's decentralized setup is much more secure. If one part of the network is attacked, the other nodes or computers within can quickly find and isolate the issue, keeping the rest of the blockchain safe.

Additionally, the integration of blockchain and healthcare improves interoperability among healthcare providers.

Traditional healthcare systems often silo patient information within separate hospitals, clinics, or medical practices. As a result, healthcare providers find it challenging to access a complete patient history, leading to duplicated tests, treatment delays, and potential diagnosis errors.

Meanwhile, blockchain for healthcare addresses these issues by providing a shared platform where healthcare providers can securely exchange data in real-time.

Because blockchain is decentralized, everyone involved in the network has the same copy of all the data, keeping the information consistent. This shared access helps healthcare providers collaborate more easily, improving communication and collaboration.

When patients visit a new healthcare provider, their medical history and relevant information can be quickly retrieved from the blockchain, enabling a more comprehensive understanding of their health status.

Another benefit is that blockchain technology offers greater control for patients over their medical data.

Traditionally, healthcare providers maintain patient records, often leaving patients with little say over who can access their information.

Meanwhile, the decentralized nature of blockchain tech and cryptographic features enable patients to control access to their health records.

Patients can decide which healthcare providers, insurers, or researchers can view their information.

This blockchain health benefit is possible through the use of private keys, which act as digital signatures. Private keys allow patients to grant or revoke access to specific parts of their medical history.

Blockchain technology can also revolutionize the healthcare supply chain by giving clear and trackable records of products as they move from manufacturing to distribution and finally to patients.

This level of transparency is essential in healthcare, where keeping pharmaceuticals and medical supplies safe and validated is critical.

By using blockchain for healthcare, every step in the supply chain—from raw materials to final distribution—is recorded in a decentralized ledger.

With each product having a unique identifier or digital token, using blockchain in healthcare provides stakeholders with a transparent audit trail. They can ensure that drugs, medical devices, and other healthcare products are sourced from legitimate suppliers and manufactured following regulatory standards.

If anything is wrong or unusual, blockchain technology can spot it quickly, allowing stakeholders to take quick corrective action. This greater accountability makes the supply chain safer and more reliable, reducing the risk of counterfeit drugs entering the market and improving patient outcomes.

Besides revolutionizing the supply chain, the implementation of blockchain in healthcare can reduce administrative costs and paperwork.

To compare, many traditional healthcare systems rely on manual data entry and paper-based documentation, which can increase the risk of human errors and lead to billing inaccuracies, claims processing delays, and verification issues.

By embracing blockchain and healthcare innovations, medical providers can reduce administrative overhead.

Using blockchain in healthcare has the potential to automate various tasks within the industry. This automation improves efficiency and helps reduce inaccuracies and fraud, which are frequent challenges in traditional healthcare systems.

In fact, the Federal Bureau of Investigation estimates that fraudulent billing makes up 3% to 10% of total health spending, contributing to inefficiency, high healthcare costs, and waste.

Blockchains can trigger automated actions based on predefined conditions using smart contracts, eliminating the need for manual intervention.

For example, in insurance claim processing, smart contracts on a blockchain can automatically verify a claim when all the required conditions are met, reducing the paperwork and leading to faster payouts.

Implementing blockchain in healthcare can also facilitate automated payment processes for billing. When a patient receives treatment, the corresponding transaction can be automatically recorded on the blockchain. This automatic process allows for real-time billing and reduces the risk of errors or overcharges.

Lastly, blockchain can secure clinical trials and research.

Informed consent is a critical process in clinical trials. It involves obtaining a patient's approval to participate in a study, which must be documented accurately and securely.

A common form of clinical fraud^[2] involves falsifying patient consent or tampering with consent forms, undermining the validity of the trial and violating ethical standards.

The unchangeable ledger of medical blockchains is key to ensuring the integrity and origin of clinical trial data. Because it can't be altered, blockchains are perfect for recording patient consent, keeping accurate trial records, and protecting against fraud.

Additionally, using blockchain in healthcare can create a clear audit trail, which helps demonstrate the authenticity of clinical trial data.

The clear trail allows researchers and regulators to trace the source and history of data, confirming that it has not been tampered with. It's especially important when clinical trials involve multiple researchers or organizations, as it reduces the risk of data manipulation or misrepresentation.

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Blockchain Applications in Healthcare

With its secure, decentralized, and transparent nature, blockchain in healthcare is reshaping the way medical data is stored, shared, and managed. This technology helps improve patient care, simplify administrative tasks, and even solve fraud-related problems.

To find out more, let's discuss the blockchain applications in healthcare together in this section!

Patient Data Management

By implementing blockchain in healthcare, medical providers can ensure the security of patient records with cryptographic encryption.

Its decentralized structure also helps healthcare providers work together more efficiently, as it allows different healthcare systems to securely share patient records without relying on a central authority.

To further explain "What is blockchain in healthcare, and how is it useful for improving data management?", let's look at a real-world example.

One such example for this category is the Synaptic Health Alliance, a consortium of major healthcare organizations including Humana and UnitedHealthcare. It uses blockchain to improve data sharing and accuracy among healthcare providers.

The alliance aims to deliver better patient outcomes by ensuring healthcare providers have the correct information for referrals, billing, and coordinating care.

Synaptic Health Alliance aims to address issues like outdated records and information silos by using blockchain to create a shared, decentralized source of truth for provider data.

By doing so, healthcare stakeholders can access up-to-date information, leading to more reliable data across the industry. Ultimately, blockchains will help reduce administrative costs, decrease errors, and improve interoperability among different healthcare systems.

Electronic Health Records (EHRs)

Electronic Health Records (EHRs) are digital versions of patients' medical histories, including diagnoses, treatment plans, medications, immunizations, allergies, and lab results.

Blockchain and healthcare integration have the potential to revolutionize the way EHRs are stored and shared.

With decentralized ledger and cryptographic encryption, implementing blockchain in healthcare ensures that EHR data remains secure and resistant to unauthorized changes. With this technology, the patient can also manage permissions and decide who has access to their health information.

A real-world example of blockchain for healthcare in this category is Patientory. It’s a population health data management and analytics company that uses blockchain to give patients greater control over their health information.

Patients can store their medical records data on the PTOYMATRIX blockchain network by validating their identity and assigning it to the Patientory private key, securing access to their health information.

The mobile app will compile patients’ EHRs and genomic data on wearable devices. This capability will create a unified and comprehensive wellness profile. The data will then provide patients with insights and recommendations to maintain and improve their health.

To motivate users, it records their health scores and rewards them with the PTOY token when they engage in healthy behaviors and achieve higher scores. The tokens then can be traded on decentralized and centralized crypto exchanges like Binance. 

Patientory also helps health enterprises through another blockchain-based solution named Neith. This platform seamlessly integrates with a consumer-facing mobile app to integrate patients’ health and lifestyle data into personalized care plans.

Medical Research and Clinical Trials

Blockchain's design allows each piece of data to be traced back to its source. It will be particularly valuable in clinical trials, where data authenticity is important.

By recording every action, from collecting patient consent to processing trial results, blockchain tech ensures that each step can be verified, preventing data manipulation.

The immutable ledger of blockchains resists unauthorized changes, reducing the risk of fraud in clinical trials.

These are often susceptible to fraudulent activities, such as falsifying patient consent forms or tampering with results. Each record is unchangeable once added to the blockchain, making it nearly impossible to alter data without detection.

BurstIQ uses a blockchain to establish clear data provenance in healthcare settings.

It’s a health-focused technology company that specializes in providing secure and intelligent data solutions. The company's primary focus is on healthcare and life sciences, offering a platform that allows organizations to securely manage, share, and analyze large amounts of health-related data.

Key features of BurstIQ:

• Secure data management. BurstIQ's platform is designed to manage sensitive health data with high levels of security, making it difficult for unauthorized parties to tamper with or alter records.
• Data provenance and traceability. BurstIQ employs blockchain to track the provenance of health data, allowing each piece of information to be traced back to its source. This capability is particularly valuable in clinical research, where data authenticity is critical.
• Interoperability and data sharing. The platform allows hospitals, research institutions, insurance companies, and patients to share data securely. BurstIQ's decentralized setup encourages different systems to connect and exchange information without compromising security.

Artificial intelligence (AI) and machine learning integration. BurstIQ integrates AI and machine learning to extract insights from health data. This combination of technologies enables advanced analytics, allowing healthcare organizations to identify trends, predict outcomes, and make data-driven decisions.

As a secure data exchange provider for sensitive health data, BurstIQ also has all of the HIPAA-compliant infrastructure, healthcare organizations can trust that their patient information is handled in accordance with regulatory standards.

Pharmaceutical Supply Chain

If you understand the answer behind “What is blockchain in healthcare?”, you might notice that this technology can provide immutability.

With that ability, blockchain technology enables stakeholders to track drugs and medical supplies from manufacturing to final distribution. Each transaction or movement is recorded on the network, creating an unchangeable record that can be verified at any point.

MediLedger is at the forefront of using blockchain for healthcare. This platform is designed to bring more transparency, security, and efficiency to the pharmaceutical supply chain.

It aims to address some of the industry's issues, such as compliance with regulations, prevention of counterfeit drugs, and efficient tracking of pharmaceuticals.

This blockchain-based platform has gained traction in the pharmaceutical industry, with notable participants such as Pfizer, Genentech, and McKesson joining.

One of MediLedger's key applications is compliance with the U.S. Drug Supply Chain Security Act (DSCSA), which requires pharmaceutical companies to implement track-and-trace systems to combat counterfeit drugs.

MediLedger's blockchain platform facilitates this by providing a shared, secure system where manufacturers, wholesalers, distributors, and pharmacies can record and verify the movement of pharmaceuticals.

This compliance ensures that drugs meet regulatory standards and are sourced from legitimate suppliers.

MediLedger also offers other benefits, such as reducing administrative overhead and streamlining supply chain processes. With all relevant data recorded on the blockchain, stakeholders can access the information they need without relying on centralized systems or complex paperwork.

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Claims and Billing

Insurance claims often involve complex processes, requiring multiple steps for verification and approval. Blockchains can streamline this by creating a single, secure source of truth for claims data.

With a blockchain-based system, every step of the claims process is recorded on an immutable ledger, allowing for automated verification.

For example, MetLife subsidiary LumenLab uses blockchain to explore automated insurance claim processing. The system automatically triggers claims when predefined conditions are met, reducing the need for human intervention.

Known as “Lifechain”, MetLife works with Singapore Press Holdings and NTUC Income to enable families who post obituaries in a local newspaper to quickly check if their deceased loved one had a life insurance policy.

The technology operates by sending a hashed version of the deceased's National Registration Identity Card (NRIC) to Lifechain, but only after the family gives its permission.

If there's a life insurance policy that matches, the family gets a notification within one business day. The system also automatically sends a notification to the insurer to start the claims process.

Meanwhile, British insurance firm Legal & General works with Amazon Web Services (AWS) to build a blockchain system for handling pension agreements, particularly bulk annuities.

Bulk annuities help pension funds and employers shift the risk of retirement benefits to an insurance company. When a pension fund buys a bulk annuity, the insurance company takes over the responsibility for paying out retirement benefits to the fund's members, reducing the pension fund's long-term risk.

Challenges and Considerations

Implementing blockchain in healthcare can tackle various issues in the industry, but it also presents certain considerations. These can impact the successful deployment of the technology.

One key consideration healthcare providers must consider when adopting blockchain health solutions is regulatory and compliance issues.

Healthcare is subject to strict rules regarding data protection, patient privacy, and clinical safety, making compliance a significant challenge when implementing a medical blockchain.

Healthcare organizations must comply with data privacy laws, such as the Health Insurance Portability and Accountability Act (HIPAA) in the U.S. and the General Data Protection Regulation (GDPR) in Europe.

These regulations outline strict rules for how patient data is collected, stored, shared, and protected. The decentralized nature of blockchain technology may raise questions about data access and control, requiring careful consideration to ensure compliance with these laws.

Healthcare applications often require approval from regulatory bodies such as the U.S. Food and Drug Administration (FDA) or the European Medicines Agency (EMA). Blockchain-based solutions for clinical trials, for example, need to meet strict requirements for data integrity and trial oversight.

Beyond legal compliance, blockchain applications in healthcare must also consider ethical issues, such as data fairness, bias, and patient rights. Compliance requires addressing these ethical considerations to build trust among healthcare stakeholders and the public.

Another element healthcare providers should consider when implementing blockchain in healthcare is data privacy concerns, as the technology removes the ability to delete or modify data.

For example, if a patient wishes to withdraw consent for their health records to be shared, the immutable nature of blockchains could prevent the data from being removed or hidden. It can create tension between the need for a permanent record of medical information and the patient's right to privacy and data control.

Healthcare providers that use smart contracts can also experience challenges related to immutability.

Smart contracts are coded to execute when certain conditions are met. However, this rigidity can pose legal challenges if there is a need to amend or terminate a contract.

Situations in healthcare may change due to new regulations, medical developments, or other factors.

Suppose medical providers implement blockchain in healthcare tools. In that case, they need to establish best practices for managing the immutability of smart contracts, as this feature can make it challenging to adapt to ever-changing conditions.

Interoperability and security are other considerations healthcare providers should be aware of. Interoperability refers to the ability of different systems, applications, and organizations to share and use information seamlessly.

Using blockchain in healthcare can play a key role in achieving seamless information sharing, which is crucial for effective patient care, reducing redundant tests, and enabling coordinated treatment plans.

While blockchain usage can improve interoperability, it's crucial to follow industry standards like Fast Healthcare Interoperability Resources (FHIR) and Health Level Seven (HL7), which introduces additional complexity to integration.

In addition to regulatory issues, another challenge is the diversity of healthcare systems. These systems often use varied standards, protocols, and data formats. Providers need to align these systems if they want to integrate blockchain tech, which can be complex and resource-intensive.

Many healthcare organizations also operate with legacy systems that were not designed for blockchain technology. Updating or replacing these systems to work with a blockchain model can be costly and time-consuming.

Moreover, using blockchain for healthcare can introduce security challenges and vulnerabilities that require careful consideration. Despite its reputation for strong security, a blockchain is not immune to risks.

One of the primary security challenges is 51% attacks, where a group gains control over more than half of a blockchain's computational power, allowing it to manipulate data. This attack could impact patient records, clinical trial data, or insurance claims, leading to doubts about whether the information is accurate.

Smart contracts, which automate processes like insurance claims or billing, can also contain coding errors or be exploited through malicious activities. In a healthcare setting, this could lead to unauthorized data access or financial fraud.

The next thing healthcare providers should be aware of when implementing blockchain tech is scalability and performance.

Scalability refers to a system's ability to grow and manage increased workloads without compromising performance. If medical providers implement blockchain in healthcare, the sheer volume of data generated can strain a blockchain network.

Healthcare data is often large in volume and complex in structure. For example, EHRs include extensive information on patient histories, diagnoses, treatments, and lab results, which can create heavy data loads.

Additionally, medical imaging, genomic data, and other specialized healthcare information can further increase the demands on a blockchain system.

If a blockchain can't scale effectively, it may lead to slower transaction times, increased costs, reduced reliability, and create bottlenecks and performance issues.

In healthcare, slow performance can affect patient care and operational efficiency. For instance, if a blockchain is used to manage patient records, a delay in data retrieval could impact clinical decisions and patient treatment.

The last consideration is adoption barriers.

A medical blockchain model is complex and needs specialized knowledge. Healthcare providers, from doctors and nurses to administrative staff, must understand how blockchain works and how to use it effectively in their daily operations.

Blockchain applications in healthcare may involve a steep learning curve and comprehensive training programs, which can be time-consuming and divert staff from essential activities, affecting productivity during the transition period.

Using blockchain for healthcare involves considerable initial investment. Organizations must invest in the necessary infrastructure, including hardware, software, and network resources, to support blockchain technology.

There are also costs for hiring or training staff with blockchain expertise and meeting compliance and regulatory requirements.

These upfront costs can be substantial, making it challenging for smaller healthcare providers or those with limited budgets to adopt blockchain technology.

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Conclusions

The relationship between blockchain and healthcare is evolving, offering new opportunities to enhance patient care and system efficiency. As the technology becomes more integrated into healthcare processes, it has the potential to revolutionize everything from data management to insurance claims.

However, the successful adoption of blockchain in healthcare will require overcoming challenges related to regulation, compliance, and interoperability.

Looking ahead, I think one of the most exciting areas of innovation in this industry is the integration of crypto exchanges like Binance and Bybit. Blockchain in healthcare is a critical factor in this development, as these platforms allow for secure and efficient crypto transactions.

The integration with crypto can open opportunities for funding medical research, facilitating international healthcare payments, and even providing alternative methods for insurance and billing.

The content published on this website is not aimed to give any kind of financial, investment, trading, or any other form of advice. BitDegree.org does not endorse or suggest you to buy, sell or hold any kind of cryptocurrency. Before making financial investment decisions, do consult your financial advisor.

Scientific References

1. Haleem, A., Javaid, M., Singh, R.P., et al.: ‘Blockchain technology applications in healthcare: An overview’;

2. Saeed, H., Malik, H., Bashir, U., et al: ‘Blockchain technology in healthcare: A systematic review’.