TL;DR

• Blockchain technology has the potential to revolutionize the healthcare industry with secure data management and greater transparency.

• The integration of blockchain in healthcare faces challenges such as upfront costs, scalability, standardization and regulatory compliance.

• The decentralization and data distribution of blockchains can facilitate secure and synchronized patient records.

• Blockchain integration can improve interoperability between healthcare providers, enabling more accessible and transparent care.

Introduction

Although it is most often associated with Bitcoin and other cryptocurrencies, blockchain technology is also used for data storage and protection in various industries. Along with the charity and supply chain sectors, the healthcare sector is among the most discussed use cases. But what characteristics of blockchain make it suitable for healthcare?

The benefits of using blockchain in the healthcare sector

Some of the features that allow cryptocurrency blockchains to act as a secure way of recording financial transactions are also applicable for storing medical data. Because most blockchains are designed as distributed systems that record and protect files through the use of cryptography, it is extremely difficult for anyone to harm or alter data without the approval of all other participants in the network. Therefore, immutability is one of the characteristics that enable the creation of incorruptible databases of medical records.

Additionally, the peer-to-peer architecture used in blockchains allows all copies of a patient's record to be synchronized with each other as updates are made, even if they are stored on different computers. In fact, each node in the network maintains a copy of the entire blockchain and nodes communicate regularly to ensure that the data is up-to-date and authentic. Therefore, decentralization and data distribution are also important aspects.

It is important to mention that blockchains are distributed, but not always decentralized (in terms of governance). Decentralization is not something binary, therefore, depending on how nodes are distributed and the general architecture, distributed systems can present varying degrees of decentralization. In the context of healthcare, blockchains are generally built as private networks, as opposed to public ones that are typically used as cryptocurrency ledgers. While anyone can join and contribute to the development of a public blockchain, private versions require permission and are managed by a smaller number of nodes.

Potential advantages of using blockchain in healthcare

The power of blockchain goes beyond finance and extends to the important field of healthcare, from protecting patient data to ensuring the authenticity of pharmaceutical products. Here are some potential use cases that highlight how blockchain technology can revolutionize the healthcare industry.

1. Greater security

As mentioned, one of the most important use cases of blockchains in the healthcare sector is leveraging the technology to create a secure and unified peer-to-peer (distributed) database. Thanks to the immutability of blockchains, data corruption should no longer be a concern. Blockchain technology can be used to effectively record and track the medical data of thousands of patients.

Unlike traditional databases that rely on a centralized server, using a distributed system allows data to be exchanged with higher levels of security while reducing the administrative costs imposed by the current system. The decentralized nature of blockchains also makes them less vulnerable to technical failures and external attacks that often compromise valuable information. The security provided by blockchain networks can be particularly useful for hospitals, which frequently deal with hacker intrusions and ransomware attacks.

2. Interoperability

Another advantage of blockchain-based medical records is the ability to improve interoperability between clinics, hospitals and other healthcare providers. Technological differences in data storage systems often make it difficult for organizations to share documents.

However, blockchain technology can solve this problem by allowing authorized members to access a unified database of patient files or even medication distribution records. So, instead of trying to interact with each other's internal storage, service providers can work together using a single database.

3. Accessibility and transparency

In addition to simplifying the record-sharing process, blockchain systems can also provide patients with more accessibility and transparency regarding their own health information. In certain situations, requesting validation of changes made to patient documents can ensure the accuracy of the records. If used correctly, this feature can provide an extra layer of security against human error and intentional forgery.

4. Reliable supply chain management

Blockchains can offer a reliable method for tracking pharmaceutical products throughout the entire manufacturing and distribution process, reducing problems related to counterfeit medicines. In conjunction with IoT devices used to measure factors such as temperature, blockchain technology can also be used to verify proper storage and transportation conditions or to authenticate the quality of medicines.

5. Protection against insurance fraud

Blockchain technology can also be used to combat medical insurance fraud, estimated to cost more than $100 billion a year to the American healthcare system. Immutable records stored on blockchains and shared with an insurance provider can prevent some of the most common types of fraud, including charges for procedures that never occurred and charges for unnecessary services.

6. Recruitment for clinical trials

Another application of blockchain in healthcare is to improve the quality and effectiveness of clinical trials. Medical data on blockchains can be used by clinical trial recruiters to identify patients who may benefit from the drugs being tested.

A recruitment system like this could significantly improve clinical trial uptake, as many patients are not aware of relevant drug trials and thus never have the opportunity to participate in them. While trials are conducted, blockchains can be used to ensure the integrity of the data collected.

Challenges of integrating blockchain into the healthcare sector

The implementation of blockchain technology in healthcare is really promising, but it faces some challenges. Let's address some of the main concerns.

1. Compliance

Using the US as an example, healthcare companies interested in adopting blockchain technology need to comply with existing data regulations such as the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

HIPAA sets standards for storing, sharing, and protecting data in the healthcare industry. Therefore, to be fully compliant, US-based companies would need to implement custom blockchain ledger systems with enhanced privacy features and limited accessibility.

2. Initial costs and speed

For service providers, blockchain solutions will likely involve a high initial investment, a fact that certainly makes wider adoption difficult. Furthermore, distributed systems tend to be considerably slower than centralized ones in terms of transactions per second.

A large blockchain network with many nodes would likely need more time to transmit and synchronize data compared to centralized systems. This is especially concerning for very large databases that would eventually need to store and track the information of millions of patients. The problem would be even worse for large image files such as CT scans or MRIs.

3. Educational gap

The complexity of blockchain technology creates educational challenges in the healthcare sector. This gap can result in the underutilization and inadequate implementation of blockchain solutions.

Ongoing training and education is essential to provide healthcare professionals with knowledge of potential use cases, appropriate implementation strategies, and awareness of cyber threats and evolving regulations.

4. Scalability

The enormous amount of data produced by the healthcare sector presents a significant scalability challenge for blockchain networks. As data volume increases, so does transaction time and operational cost on some blockchains.

This limitation can delay obtaining information or verifying transactions, compromising system efficiency and patient care. This and other limitations may discourage healthcare agencies from adopting blockchain technology, resulting in a reduction in innovations and advances in the sector.

5. Data standardization

To promote efficient communication and interoperability on the network, blockchain needs uniform data input. However, this is particularly difficult in healthcare due to the wide variety of data types and formats.

Without a standardized data protocol, the exchange of information can result in misinterpretations or errors, causing problems and system interruptions. Therefore, achieving data standardization without losing important patient information represents a major obstacle to the use of blockchain in healthcare.

Final considerations

From securely managing patient data to improving transparency and security, blockchain technology holds great potential for healthcare. However, the educational gap, scalability issues, and existing regulatory frameworks are some of the factors that need attention. Balancing these complexities with the numerous benefits of blockchain will require a thoughtful and collaborative approach among everyone involved in the healthcare sector.

Further reading

• What is the Blockchain Trilemma?

• Layer-1 vs. Layer-1 Blockchain Scaling Solutions Layer-2

• What is a blockchain and how does it work?

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