Blockchain: An Rx For Healthcare’s Pain Points? By Jennifer L. Schenker

By | November 30, 2016

Blockchain could be just what the doctor ordered for patients’ medical records and claims.

There has been much discussion about how financial services might be transformed by the blockchain, a distributed ledger technology that enables the transfer, with privacy and security, of anything of value without the need for a middleman.

Now “the healthcare sector is starting to wake up to the possibilities of sharing data with providers and patients using blockchain technology,” says Brian Behlendorf, executive director of Hyperledger, a collaborative technology initiative hosted by the Linux Foundation which aims to establish a cross-industry open standard for distributed ledgers so that they can be used effectively for global business transactions.

Hyperledger has been working closely with the banking sector on the use of blockchain in financial services.  In October it announced that it is forming a working group to tackle technical and business issues around the use of blockchain for health services.

Uptake of blockchain by the health sector “ could be slow to take off: the privacy and operational concerns are real and significant, and it’s not as clear where you’d supplant existing networks and systems the way we see that with financial services,” says Behlendorf, a leader in the open software movement. “But there are some intriguing use cases. Managing prescriptions and managing patient consents in clinical trials are my current favorites,” he says. “Blockchain tech could significantly rework how participants in those use cases conduct business.”

State of Play

The healthcare sector is actively exploring various use cases for blockchain. An R&D unit of healthcare giant Philips has joined Gem Health, a group developing applications and shared infrastructure for healthcare powered by a version of the Ethereum blockchain, a network developed by Vitalik Buterin which can be used to codify, decentralize, secure and trade just about anything. MIT Media Lab researchers are using the Ethereum blockchain to develop a system called MedRec  to manage medical records. Drug maker Merck’s applied technology group is studying a variety of potential applications.  And Martin Ventures, a U.S.-based healthcare and technology-focused venture firm, is teaming with Hashed Health, a business consortia comprised of pharmaceutical companies, payers and providers of medical services, to develop distributed ledger solutions that are adapted to the healthcare industry’s unique issues and regulatory constraints.

The U.S. government is also examining how blockchain technology might be used by the health care sector. A division of the U.S. Department of Health and Human Services earlier this year launched a competition to gather the best ideas for use cases of blockchain in health and health-related research.

The department received over 70 submissions. Winning papers announced in September included proposals to: create a decentralized electronic health record management system that would use blockchain technology to manage authentication, confidentiality, accountability and data sharing; use the blockchain to enable privacy-preserving health care predictive modeling and to increase interoperability between institutions; create a peer-to-peer network that enables parties to jointly store and analyze data with complete privacy in a way that could empower precision medicine clinical trials and research; launch a platform that combines smart contracts, blockchain, and other technologies to make the  medical claims process more efficient.

While it is still early days “people who come to the table now will set the terms for how blockchain gets implemented and how it gets understood by other stakeholders,” Hashed Health COO Corey Toldaro said in a keynote speech at a recent U.S. conference that explored blockchain’s impact on the sector.

The Business Context

Thanks to devices like Fitbit and publicly available genetic tests from companies like 23andMe  consumers today have more access to information about their health than ever before. Yet, Brian Forde, director of the digital currency initiative at MIT Media Lab, says in a blog post, the most basic and traditional of our medical information –  the records generated by our doctors – remain trapped in silos, making access difficult.

While legislation in the U.S.- such as the HITECH and the Affordable Care Acts – now enable and in some cases mandate that data from doctor visits be stored digitally, medical records and results from different facilities and physicians are often stored in incompatible databases, notes Forde. This lack of interoperability costs 150,000 lives and $18.6 billion per year in the U.S. alone, according to the Premier Healthcare Alliance.

An interoperable blockchain could eradicate existing silos while strengthening data integrity and better protecting patients’ digital identities, says an August 2016 report by Deloitte, a professional services company.

In 2015, there were 112 million health care record data breaches due to hacking/IT incidents. In 2016, it is estimated that one in three health care recipients will be victims of a data breach, the report says.

The blockchain’s structure, which includes cryptographic public/private key access, proof of work, and distributed data, could create a new level of integrity for health care information.

Each participant connected to the blockchain network has a secret private key and a public key that acts as a visible identifier. The pair is cryptographically linked so that identification is possible in only one direction using the private key.

The blockchain public/private key encryption scheme creates identity permission layers to allow patients to share distinct information with specific health care organizations within the health care ecosystem on an as-needed-basis, reducing vulnerabilities stemming from storing patient information on all sides and allowing for data access time limits to be introduced by patients or providers.

A hacker would need to individually hack every single user to obtain unique private keys to access identifiable information of value.

Additionally, all health care organizations connected to the blockchain could maintain their own updated copy of the health care ledger. If an attempt was made to change an historical block it would require 51% of network participants to approve the change, as every single copy of that blockchain would need to be updated to reflect the change. The Deloitte report notes that this feature  limits the risk of malicious activity because changes are immediately broadcast to the network, and distributed ledgers provide safeguard copies against harmful hacks.


The blockchain could also make health record storing systems more interoperable This could be accomplished by creating an application program interface (API) oriented architecture.

The APIs would be published and made available to all participating organizations connected to the blockchain —enabling easy integration with each organization’s existing systems. When an API is invoked, it would carry the contents of the patient interaction to a smart contract housed on the blockchain.

“The promise of blockchain has widespread implications for stakeholders in the healthcare ecosystem,” says the Deloitte report. “Capitalizing on this technology has the potential to connect fragmented systems to generate insights and to better assess the value of care. In the long term,

a nationwide blockchain network may improve efficiencies and support better health outcomes for patients.”

There is also a business case for moving to the technology. Blockchain promises to lift “the costly burden of maintaining a patient’s medical history away from the hospital: eventually cost savings will make it full cycle back to the patient receiving care,” Hyperledger’s Ray George says in a blog post.

If this proves true, not just banks, but hospitals may soon start rushing to appoint Chief Blockchain Officers.