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Checking the Pulse of Blockchain in Healthcare


Blockchain is set to redefine how healthcare is contracted, managed, and paid for. Although the technology is in its early stages, here is where we are and what is ahead.

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Image has been resized. Credit: Tiagodimas2, Wikimedia Commons

Blockchain. It’s tough to think of another concept surrounded by more hype—and also some real promise—over the past 2 years. But what is really true about the current state of blockchain? Who are some of the key players? What does healthcare have to say about it, and where does it look like this potentially game-changing technology is headed? Here’s a status report on where things stand at the moment.

Let’s start off with a quick review of the overarching promise of blockchain in healthcare and the key components of its architecture that hope to make this promise a reality. Quite simply, blockchain offers free-market, patient-directed healthcare. To accomplish this, it uses a distributed database (a “ledger” in blockchain-speak) for secure transactions that contain a list of dealings, grouped into blocks, and shared with members of a network. Through “smart contracts” and a peer-to-peer replication process, transactions propagate through the network with approval from other members of the network. Every event or transaction is time-stamped and unable to be altered (“immutable” in blockchain-speak) at a later point.

The result: better data integrity and a higher level of trust among participants due to the extra transparency and data security.

Who’s Working on Blockchain?

Now, for the big question: What are the plans to deploy this technology in a real-world healthcare environment?

Change Healthcare just unveiled its Intelligent Healthcare Network Platform, in what the organization is calling the first enterprise-scale blockchain network in healthcare. Change is using an open-source blockchain framework applied to revenue cycle management to enable healthcare practices and payers to longitudinally track the real-time status of claims submission and remittance. The hope is that this emerging technology will deliver higher levels of transparency and efficiency to increase the ability to track and audit transactions. According to Change Healthcare, this network is processing more than 550 transactions per second through blockchain applications.

IBM, meanwhile, is working with the FDA to explore how blockchain can power health data transfers across Internet of Things (IoT) devices to increase health data access between patients, physicians, and researchers. The idea is to drive improved outcomes and visibility into population health management, while mitigating data security issues inherent in sharing data across mobile devices.

What Government Entities are Saying

Federal agencies have been receptive to the concepts underpinning blockchain. The Office of the National Coordinator for Health Information Technology (ONC) and the National Institute of Standards and Technology (NIST), are sponsoring a yearly challenge with cash prizes for designers, developers, investigators, patient privacy experts, and others to submit white papers on the topic of “Blockchain Technology and the Potential for Its Use in Health IT [information technology] and/or Healthcare Related Research Data.”

Although the US Department of Veterans Affairs (VA) has expressed some skepticism toward blockchain, the agency is open to new ideas on how best to use the technology. Charles Worthington, the VA’s chief technology officer, said he is interested in the “DevOps of blockchain.” By putting blockchain in the hands of developers, he wants to see if it will it result in new evolutions similar to how DevOps evolved from the work on cloud computing. The department is looking to industry to offer blockchain-enabled solutions to the many challenges facing healthcare IT, with which federal agencies often grapple.

The Road Ahead

There are several issues to be resolved with blockchain before it can go mainstream: One such issue is scalability. Blockchain uses every computer in its network to process every transaction, and this is not a very efficient way of doing things in a big data world. Another is the immutability of blockchain transactions. Some businesses may pause when they realize that a contract executed in blockchain can never be modified or reversed.

The merits of blockchain technology are also being clouded by to the rash of “initial coin offerings,” which many consider a giant investment bubble. Without the proper legal or regulatory controls, coin offerings that include everything from purchasing job placement to religious absolution are generating a fevered rush reminiscent of the dot-com mania. The fallout of these coin offerings could impact the market for legitimate blockchain applications.

But think about some of the specific challenges in healthcare that blockchain can legitimately address. A decentralized health data exchange can eliminate the need for a health information exchange (HIE), ensuring access control and the integrity of protected health information. Automating and removing unnecessary third parties from payment processing can shrink per-transaction costs. A time-stamped record of clinical trials that cannot be destroyed can reduce fraud and ensure the performance and quality of new medicines. With industry estimates showing that centralized IT systems for health data exchange cost approximately 150,000 lives and $18.6 billion around the globe every year, the opportunity from blockchain can certainly outweigh the risk.

Reduced cost-per-transaction, and interoperability without an HIE are just some of the benefits provided by distributed and secure access to longitudinal health data.

Similar to the efforts in interoperability, blockchain will need to grow, refine, and evolve. It will start with specific applications and then expand as confidence continues to build around the technology. And it looks like several creative ideas powered by blockchain are already off to a strong start.

Author details

Paddy Padmanabhan is a healthcare growth strategist and the author of The Big Unlock — Harnessing data and Growing Digital Health Businesses in a Value-based Care Era.

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