| February 21, 2019

Blockchain in Healthcare: An Executive’s Guide for 2019

Codrin Arsene

Codrin is CEO of Digital Authority Partners. He has spent over a decade creating successful digital strategies for both Fortune... Codrin is CEO of Digital Authority Partners. He has spent over a decade creating successful digital strategies for both Fortune 500 companies and startups.

Blockchain in healthcare is ALL about removing the middleman. It’s about increasing the security of various transactional activities in the healthcare space, while eliminating bureaucracy and manual inefficiencies, improving quality of care and democratizing patient data.


Blockchain is a decentralized list of digital records linked together by cryptography. Each record is known as a ‘block’. Every block contains a cryptographic hash of the previous block ie a mathematical algorithm, a timestamp, and data of that transaction. Blockchain technology was developed to be a secure open ledger to record digital transactions, managed by a peer-to-peer network.


Traditional blockchain technology has historically been associated with cryptocurrency. It came to mainstream attention back in December 2017 when the price of Bitcoin soared from $900 to $20,000.


Here’s the catch though: blockchain is not only applicable to cryptocurrency. In fact, blockchain, as a secure public ledger, is exactly what the healthcare industry needs.

HIPAA reported that in 2018, there was at least one data breach of healthcare records every day. Between 2009 and 2018, more than 59% of the US population has had their healthcare records compromised from data breaches.


In the age of data-insecurity, health organizations should look at utilizing blockchain technology. There’s a lot more to it than simply transactional activities’ – blockchain is about securely sharing data previously deemed impossible to extract.


This article will talk about various middlemen that can be removed and mistakes that can be avoided if the healthcare industry adopts blockchain at scale. We will cover the following:


  • Pharma
  • Healthcare institutions and providers
  • Insurance providers
  • Consumers


According to Healthcare Weekly, 40% of healthcare executives see blockchain technology as one of the top 5 priorities in the industry.


Furthermore, the adoption of the blockchain in healthcare could save the healthcare industry up to $100-$150 billion per year by 2025 in data breach-related costs, IT costs, operations costs, support function costs and personnel costs, and through a reduction in frauds and counterfeit products.


Here is how the healthcare industry can benefit from blockchain.


Let’s start with an infographic which highlights the main ideas in this article:

blockchain in healthcare infographic


Blockchain in healthcare: how it will impact the pharma industry

There are lots of challenges to overcome in pharma. For example, in our previous article about the advantages of AI in pharma, we showed that the industry is struggling to keep up to date due to its legacy systems holding it back.


Blockchain technology can prove to be just as effective a solution as AI. It can help improve the drug supply chain and make the clinical trials process more efficient. Here’s how.


Improving The drug supply chain

One of the main issues in pharma is preventing counterfeit medicines from getting to market.


The main reason for this is likely due to the lack of a secure digital platform to track where treatment has come from. Current systems do not transfer information to each other so pharmaceutical companies have no way of knowing what is happening with their products.


This leads to a loss in revenue for the drug manufacturers and pharma businesses as they cannot sell to consumers, who also lose out.


However, blockchain technology is the answer. As the software runs across multiple networks and is decentralized, the data cannot be manipulated in any way and there will always be legitimate records of transactions made (which is why you hear the words “blockchain” and “immutable” in the same sentence).


At each stage of the drug distribution process, data will be available that shows the drug’s source, making it incredibly tough for fraudulent medicine to enter the market. This would also bring the costs of bringing drugs to market down too.


To quote PR Newswire:


The most prominent beneficiaries of the [blockchain] technology will be the pharmaceutical companies, which lose approximately $200 billion to counterfeit drugs each year. By enabling complete visibility and transparency throughout the drug supply chain, blockchain will allow tracking of drugs to their point of origin and thus, help to eliminate falsified medication, reducing revenue loss by up to $43 billion annually for pharma companies.


Blockchain technology is being used in other industries to prevent fraud so there’s no reason why blockchain in healthcare cannot follow suit.


For example, in January 2018, blockchain firm Viant announced it would collaborate with five companies, namely Microsoft, GlaxoSmithKline, Imaginea, the World Wide Fund for Nature (WWF) and an oil and gas giant, to accelerate the use of the track and trace technology in supply chains.


Specifically, the WWF will be using the Viant platform to track fish from catch to plate to prove provenance and ensure seafood sustainability, while GSK will be using their blockchain technology to provide transparency and tracking around the global use of its technology licenses and physical products.


And it doesn’t stop there.


A study by Clauson, K., Breeden, E., Davidson, C. and Mackey, T. (2018) “Leveraging Blockchain Technology to Enhance Supply Chain Management in Healthcare:”, Blockchain in Healthcare Today, 10. doi: 10.30953/bhty.v1.20, adds further merit to its use in the healthcare industry.


The objective was to provide an overview of the opportunities and challenges associated with blockchain adoption and deployment for the health supply chain, with a focus on the pharmaceutical supply, medical device and supplies, Internet of Healthy Things (IoHT), and public health sectors.


The results showed the health supply chain appears well suited for the adoption of blockchain-based technologies, such as using blockchain to combat counterfeit medicines, securing medical devices, optimizing the functionality of IoHT, and improving the public health supply chain.


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Blockchain in healthcare: the clinical trials scenario

One of the blockchain’s best features is that by recording every change across the entire peer-to-peer network, every transaction is validated. Since clinical trials require a fast and transparent way to locate patient data, blockchain could be the long-term solution.


The best clinical practices are the most transparent. This includes who enters the information and the location of entry. The current way to view this data is through audit trails but blockchain can improve these processes with better security and improved privacy.


However, as is often the case in the healthcare industry, there are a few regulatory questions that crop up.


Clinical trial data must be secure due to its highly sensitive nature. Whether it’s proprietary information on a medical product’s safety and efficacy, or personally-identifiable information belonging to clinical trial patients, regulators must be sure that the blockchain is as safe and accessible to the people that need it as it claims.

Lawmakers would be pleased to know that blockchain has the flexibility to make data completely visible or completely password protected, depending on the user’s or firm’s preferences. It can be programmed to give certain individuals access while blocking others at the same time.


And it seems that they are starting to take notice. For example, the FDA started an initiative to define the best way of using blockchain to exchange health data. With these efforts underway, it almost seems certain that others will follow.


One company leading the way in blockchain record keeping and improving the quality of clinical trial processes is Boehringer Ingelheim. They have partnered up with IBM to test whether the decentralized framework can provide data integrity, provenance and transparency, as well as automate some trial processes and reduce costs.


Uli Brödl, VP of medical and regulatory affairs for Boehringer’s Canadian division said they ‘want to understand the value proposition of blockchain technology, and how that value would generally be applicable to many disease areas.’


While Boehringer has worked on using blockchain in their own drug supply chain, it was their first in clinical trials research.


Blockchain in healthcare: finding the right people for a medical trial faster scenario

The advantages of blockchain for this purpose is twofold. Firstly, from a consumer and pharma point of view, various blockchain marketplaces have been already launched. We will discuss this in more detail later down the line.

The second use case is that in today’s market, researchers are trying to find the right candidates for drug trials via patient IDs mapped onto EHR data. It’s messy. You can miss potential candidates and there is a lot of manual work involved.


Hospitals and health systems across the US require patient data to be manually entered across multiple EHR systems, including a patient ID system that gives a patient a unique ID number.


The blockchain can help this process by automatically replicating patient data to each EHR. This would permanently remove the chances of duplicate records created. It would store patient IDs and the record keeping system’s IDs.


Because the blockchain system is automated, once a physician enters details of a clinical trial and needs to find potential patients, it can easily use these identifiers and match the right people faster with improved accuracy and reliability. After all, since blockchain records cannot be entered without validation, doctors can be sure that they are getting the right people for the trial.


Blockchain in healthcare: how it helps institutions & providers

It’s difficult and tedious for health organizations to manage patient data, compliance and government regulations, not to mention the large costs that come with it.


However, the blockchain offers light at the end of the tunnel.


Blockchain for patient consent management

Do we really need to explain how much of a pain this is? You need to get all sorts permissions, opt-ins and informed consent from patients. On top of that, it’s imperative to be compliant with laws like the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) when handling protected health information.

Nevertheless, blockchain technology proposes a noteworthy solution to the mess that is consent management.


One company that is leading the charge is HealthVerity. They have built a technology platform that acts as the foundation for creating, exchanging and managing consumer data.


Known as HealthVerity Consent, their consent management platform leverages blockchain technology to aggregate and manage all individual consumer and patient data and preferences into a single, central location. Only those with active permissions are able to access this sensitive data in real time.


Jon Cappiello, CTO of healthVerity, is aiming to tackle the data fragmentation and inconsistency issue:


What we are trying to do with our solutions is to help audit the fragmented systems, create a single source of truth for consumer consent, and leverage the immutability of blockchain.’


Blockchain in healthcare: ‘fill up forms for hospital intake’ scenario

This use of blockchain technology in healthcare is hot off the press. Kalibrate Blockchain will be awarding an exclusive license to a single hospital in each market allowing that hospital to embed the FormDrop SDK in its own mobile app.


This app allows patients to fill out and submit healthcare forms automatically to healthcare providers from their smartphones. No clipboards, paper forms, or electronic tablets. What a relief!


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Patients can also use the FormDrop app to index their patient ID and personal health information on the Universal Patient Index to provide healthcare providers access to that information.


Blockchain for healthcare: smart contracts

There are a lot of contracts in the healthcare industry; between patients and hospitals, healthcare providers, organizations and vendors, the list goes on.


Now, with smart contracts being developed, the blockchain stands to upend the entire industry, with cutting costs being an added benefit.


For reference, a smart contract is a computer protocol intended to digitally facilitate, verify, or enforce the negotiation or performance of a contract, without the need for third-parties. They can be used to secure data transfers, retrievals and analyses.


Smart contracts will allow hospitals and other practices to store patient records in a digital ledger. Patients will have the freedom to change hospitals without the need to fill in numerous forms as their new physicians can view all their information on the blockchain network.


This data also needs to be made secure. Since smart contracts are built on blockchain technology, the data can be aggregated, shared and stored in a transparent manner.


Finally, blockchain for healthcare significantly reduces the inefficiency and waste in the current healthcare landscape. Health payers end up paying claims, and then retrospectively work on identifying inaccurate payments and reconciling over and underpayments.

Where blockchain can help is that its shared ledger capabilities provide complete transparency to all parties, allowing payers and providers to negotiate claims tied to the value of care.


Healthcare payments sent and received are immediately debited from the users and divided between all the people involved in the smart contract.


Blockchain in healthcare: secure data and transfer it safely between devices and health service providers

There are so many smartphone apps and devices being developed that collect our critical health data. For example, Omron’s HeartGuide monitors blood pressure while you sleep and includes a heart rate monitor.


This data is already being shared with various entities but it’s not secure (we mean in general, not specific to Omron!). However, the blockchain can become a safe and secure way to transfer data between health service providers.


When information is recorded into the blockchain, it becomes impossible to edit or remove. This is because it anchors data to the public blockchain via proof of data integrity. This allows any user to verify the data timestamp themselves, including proving the integrity of clinical research results, reducing the costs of audits and ensuring regulatory compliance.


HIPAA enforces safe methods of communication between those who deal with PHI stored in electronic form, which is why data encryption plays a crucial role in ensuring data privacy and safety.


Blockchain in healthcare: for payers (aka insurance providers)

No one has a more vested interest in people staying healthy than insurance companies. If patients are healthy, they pay their premiums and insurance companies’ profits increase.


In recent news, Health Care Service Corporation (HCSC), PNC Bank (NYSE: PNC) and IBM (NYSE: IBM) announced a collaboration to design and create a blockchain technology network to improve transparency and interoperability in the healthcare industry. They are aiming to create an inclusive blockchain network to benefit multiple members of the healthcare ecosystem through a secure, shared environment.


Here are some other ways that blockchain can help health insurance providers.


Blockchain for micropayments

Micropayments are small financial transactions made online. The biggest problems with current systems are that while the fees may be small, they add up over time, it can sometimes take a few days to complete the transaction and there is a lack of transparency in the systems in general.


Blockchain can solve each problem.


In terms of lower transaction fees, there are no third-party payment services with blockchain technology. Instead, you pay and get paid in tokens that build your wallet. These can either be sold for cryptocurrency or good old $$$. If there are any fees to carry out a crypto transaction, they are significantly less than compared to those in current systems.


For payment times, the blockchain processes crypto transactions all day, every day, and instantly, so you receive your tokens far quicker.


The transparency aspect goes back to the smart contracts point discussed earlier. Payment distributions are automated and divided between everyone in the contract.


There are some providers trying to incentivize patients to be healthy through rewards programs, with blockchain technology at the heart of it.


For example, Cigna’s Healthy Rewards is a discount program available to Cigna customers covered under a medical, vision or dental plan. You can save on health and wellness programs. There is no need for a referral or claim forms to find an eligible provider and schedule an appointment.


Fitbit is also doing its own rewards program. It lets their customers take advantage of other deals, including healthy eating options and other fitness gear.


Blockchain in healthcare: the ‘revenue cycle management’ scenario

With healthcare costs rising, hospital revenue cycle management professionals can be left with hundreds of thousands, if not millions of dollars in unpaid medical expenses. Revenue cycle technology is vital to organizations looking to improve their patient payment processes.


St. Joseph Health plans to use blockchain technology with its Lumedic end-to-end revenue cycle management platform for distributed ledger technology, smart contracts, and machine learning.

Payers and providers connecting to Lumedic’s network can share trusted information and collaborate on integrated business processes. Their goal is to reduce inefficiencies in the healthcare system.


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Dr. Rhonda Medows, president of population health of Providence St. Joseph Health and CEO of Ayin Health Solutions, said.

‘By disrupting these often cumbersome processes ourselves, we strive to lower administrative costs for both parties while getting a deeper insight into the financial experience of patients and the ways we can simplify the process for them,’


Blockchain in healthcare: can help improve medication adherence

The world’s first blockchain-supported Personal Care Record Platform has been launched by Guardtime and partners to up to 30 million NHS patients in the UK. The MyPCR platform is estimated to improve medication adherence, saving at least £800 million in the UK and $290 billion in the US.


It is designed to deliver proof of health data and integrity, protect GDPR patient data rights and automate the verification of medication adherence.


Delivering medical adherence electronically and at scale has been extremely difficult for a number of reasons, including capturing patient consent and developing a secure mechanism to deliver personal care information to patients quickly and in line with necessary compliance rules.


For example, improved drug adherence processes can help avoid opioid overdoses.


Intel Corp is partnering with health companies to use blockchain technology to identify where the drugs leak out of the supply chain. It can track opioids from the manufacturer right the way to the patient’s home – even to the point when it’s taken by the patient. The blockchain will also help flag up cases of “double doctoring,” where patients receive more than one prescription from multiple doctors.


Blockchain in healthcare: what it can do for both consumers and providers/payers

This is the way that blockchain can help consumers of medical services. The areas, in particular, are medical history sharing and selling medical data on a blockchain marketplace.


Blockchain’s role for medical history sharing

This process is an absolute mess. Firstly, medical history data is often stored in many different silos and patients need to physically carry their information when doctors refer patients to other physicians.


The blockchain can prevent these issues.


A study by Li, P., Nelson, S., Malin, B. and Chen, Y. (2019) “DMMS: A Decentralized Blockchain Ledger for the Management of Medication Histories”, Blockchain in Healthcare Today, 20. doi: 10.30953/bhty.v2.38 introduced a decentralized medication management system (DMMS) to leverage the blockchain to manage medication histories.


These were the results:

‘We developed a proof of concept to showcase DMMS. In this system, a prescriber prescribes medications for a patient and then encrypts the prescriptions via the patient’s public keys. Patients can query their own prescriptions from different histories across healthcare institutions and then decrypt the prescriptions via their private keys. At the same time, a prescriber can query a patient’s prescription records across healthcare institutions after approval from the patient. Analytic results show that DMMS can improve security, trustworthiness, and privacy in medication history sharing and exchanging across healthcare institutions. In addition, we discuss the potential for DMMS in e-prescribing markets.’


The blockchain solution is in action.

Medicalchain enables users to give healthcare professionals access to their personal health data and record the interactions with it in an auditable, transparent and secure way through their distributed ledger. It’s built using a dual blockchain structure: the first control access to health records and the second underlies all applications and services.


Sell your medical data on a Blockchain marketplace

Most patients never know or understand that their medical information is shared. In hospitals or drug trials, you just sign some papers and don’t pay attention to the fine print.


Hu-manity has developed a smart contract that allows patients to negotiate specific terms of consent with companies interested in using their medical data. When it comes to selling the data to interested third-parties, they are in control.


Also, companies go through intermediaries (typically healthcare marketing companies) to get access to the right patients with the right health issues.


Open Health Platform uses blockchain technology for sharing data to healthcare providers, researchers and insurers.


Another company tackling this problem is Embleema. They are removing the middlemen but also allowing patients to own their data and find someone who wants to buy it. This helps both pharma and end users who can now monetize their data.



The US is spending 20% of its GDP on healthcare. Blockchain technology can help bring these costs down, keep patient data secure, save more lives and improve health outcomes.


This article has shown that:


  • Clinical research trials and the drug supply chain can both benefit from blockchain technology
  • Smart contracts can help with consent management and verifications
  • Insurance providers get better access to patient information
  • Consumers have more control over the data they sell

Do you need guidance with your digital transformation initiatives? Digital Authority Partners has worked with companies like Athenahealth, Omron Healthcare and Blue Cross Blue Shield on cutting-edge digital initiatives that improve patient outcomes and quality of care. Contact Digital Authority Partners at [email protected] or (312) 600-5433.

You may also be interested in reading our in-depth Healthcare industry reports:

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