Summary

  • Blockchain technology promises to disrupt the healthcare industry through secure data management and greater transparency.

  • Integrating blockchain with the healthcare industry faces many challenges, such as initial cost, scalability, standardization, and regulatory compliance.

  • The decentralization and data distribution of blockchain can promote the security and synchronization of patient medical records.

  • Blockchain integration can enhance interoperability among healthcare providers, thereby increasing access and transparency of patient care.

Introduction

Although blockchain technology is often associated with Bitcoin and other cryptocurrencies, the technology can also be explored for data storage and protection across a wide range of industries. Along with philanthropy and supply chain, the healthcare industry is one of the most discussed use cases. So where does blockchain fit in with healthcare?

Benefits of applying blockchain technology in the healthcare industry

Since cryptocurrency blockchains can be used to securely record financial transactions, they are also suitable for storing medical data. Most blockchains are distributed systems that use cryptography to record and protect files, making it difficult for anyone to destroy or change the data without the approval of all other participants in the network. Its tamper-proof nature creates an unchangeable database for medical history files.

In addition, the peer-to-peer architecture used in blockchain supports the synchronization of all copies of patient records when they are updated, even if they are stored on different computers. In fact, each network node has a copy of the entire blockchain, and nodes communicate with each other regularly to ensure that the data is up-to-date and authentic. Therefore, decentralization and data distribution are also important aspects.

It is worth mentioning that blockchains are distributed, but not always decentralized (in terms of governance). Decentralization is not a binary issue, so distributed systems may have varying degrees of decentralization depending on how nodes are distributed and the overall architecture. In healthcare, blockchains are often built as private networks, rather than the public networks that are typically used as cryptocurrency ledgers. Anyone can join and participate in the development of a public blockchain, but private versions require permission and are managed by fewer nodes.

Potential benefits of using blockchain in the healthcare industry

The power of blockchain is not limited to the financial sector, but also extends to the important field of healthcare, covering everything from patient data protection to the authenticity of medicines. Here are some potential use cases that highlight how blockchain technology can disrupt the healthcare industry.

1. Enhanced security

As mentioned above, one of the most important use cases of blockchain in the healthcare industry is to use the technology to create a secure and unified peer-to-peer (distributed) database. Due to the immutability of blockchain, the problem of data corruption can be solved. Blockchain technology can be used to effectively register and track the medical data of thousands of patients.

Unlike traditional databases that rely on centralized servers, using a distributed system allows for a higher level of security in data exchange while also reducing the management costs imposed by current systems. The decentralized nature of blockchain makes it less susceptible to technical failures and external attacks that often compromise valuable information. The security provided by blockchain networks is particularly useful for hospitals, which often have to deal with hacker intrusions and ransomware attacks.

2. Interoperability

Another advantage of blockchain-based patient records is that they enhance interoperability between clinics, hospitals, and other healthcare providers. Documents cannot be shared between organizations due to technical differences in data storage systems.

However, blockchain can solve this problem by allowing authorized parties to access a unified database of patient files and even drug dispensing records. Therefore, instead of trying to connect with each other’s internal storage, service providers can work together on a single database.

3. Accessibility and transparency

In addition to streamlining the process of sharing medical records, blockchain systems can also increase patients’ accessibility and transparency to their health information. In some cases, requiring verification of changes made to patient files can ensure the accuracy of medical records. If used properly, it can provide additional security by preventing human error and intentional falsification.

4. Reliable supply chain management

Blockchain can provide a reliable way to track drugs throughout the manufacturing and distribution process, thereby reducing the widespread problem of drug counterfeiting. Blockchain technology, combined with IoT devices that measure factors such as temperature, can be used to verify proper storage and transportation conditions or to verify the quality of drugs.

5. Prevent insurance fraud

Blockchain can also be used to combat health insurance fraud, which is estimated to cost the U.S. healthcare system more than $100 billion annually. Immutable medical records stored on a blockchain and shared with insurance providers can prevent some of the most common types of fraud, including billing for surgeries that did not occur and billing for unnecessary services.

6. Clinical trial recruitment

Another use of blockchain in the healthcare industry is to improve the quality and effectiveness of clinical trials. Trial recruiters can use medical data on the blockchain to identify patients for whom a test drug might be effective.

Such a recruitment system could greatly improve recruitment for clinical trials, as many patients never learn about relevant drug trials and therefore never have the opportunity to participate in them. During trials, blockchain could also be used to ensure the integrity of the data collected.

Challenges of integrating blockchain in the healthcare industry

The application of blockchain technology in healthcare is indeed very promising, but it also comes with challenges. Let’s take a deeper look at the key issues.

1. Compliance

Taking the United States as an example, healthcare companies interested in applying blockchain technology must comply with existing data regulations, such as the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

The HIPAA law outlines standards for data storage, sharing, and protection in the healthcare sector. Therefore, in order to be fully compliant, companies in the United States need to deploy customized blockchain medical record systems with enhanced privacy features and limited accessibility.

2. Initial cost and speed

On the provider side, blockchain solutions may involve high initial investments, which will undoubtedly hinder large-scale adoption. In addition, distributed systems tend to be much slower than centralized systems in terms of transactions per second.

Compared to centralized systems, large blockchain networks with many nodes may take more time to transfer and synchronize data. This is particularly worrying for large databases that will eventually need to store and track information on millions of patients. The problem is even more serious for large image files, such as computer tomography (CT) or magnetic resonance imaging scans.

3. Education gap

The complexity of blockchain technology presents an educational challenge for the healthcare industry. This gap in understanding can lead to underuse or improper implementation of blockchain solutions.

Ongoing training and education is a must to help healthcare professionals understand potential use cases, appropriate implementation strategies, and awareness of changing regulations and cyber threats.

4. Scalability

The massive amount of data generated by the healthcare industry presents a huge scalability challenge to blockchain networks. As the amount of data increases, transaction processing times and operating costs for some blockchains also increase.

Such limitations could result in delays in information retrieval or transaction verification, making the system inefficient or negatively impacting patient care. Additionally, these issues could discourage healthcare organizations from adopting blockchain, hampering innovation and progress in the field.

5. Data Standardization

Blockchain requires unified data input to facilitate effective communication and interoperability within the network. However, unified data input is particularly challenging in the healthcare field due to the variety of data types and formats.

Without standardized data protocols, information exchange may lead to misunderstandings or errors, thus disrupting the system. Therefore, achieving data standardization without losing important details of health information is a major obstacle to the application of blockchain in the healthcare industry.

Conclusion

Blockchain brings tremendous potential to the healthcare industry, from secure management of patient data to increased transparency and security. However, education gaps, scalability issues, and existing regulatory mechanisms are a few issues that need to be addressed. Balancing these challenges with blockchain’s many advantages requires a nuanced and collaborative approach from all stakeholders in healthcare.

Further reading

  • What is the blockchain trilemma?

  • Blockchain Layer 1 and Layer 2 Scaling Solutions

  • Introduction to blockchain concepts and how it works

Disclaimer: The content of this article is provided "as is" for general information and educational purposes only and does not constitute any representation or warranty. This article does not constitute financial, legal, or other professional advice and is not intended to be a recommendation to purchase any specific product or service. You should seek advice from appropriate professional advisors. If this article is contributed by a third party, please note that the opinions expressed herein are those of the third-party contributor and do not necessarily reflect the opinions of Binance Academy. For more information, please click here to read the full disclaimer. Cryptocurrency prices may fluctuate. The value of your investment may go down or up, and you may not get back the money you invest. You are solely responsible for your investment decisions and Binance Academy is not responsible for any losses you may incur. This article does not constitute financial, legal, or other professional advice. For more information, please refer to our Terms of Use and Risk Warning.