Blockchain Technology: It’s Not Ready for Healthcare Prime Time


The rise of cryptocurrencies like Bitcoin has everyone talking about blockchain. IT engineers and programmers the world over are eager to find uses for the technology, extending far beyond the realm of new age investments. In fact, some experts are even considering the potential use of blockchain technology in the healthcare field. On the surface, a means of securely distributing data in a decentralized manner seems like a no-brainer for an industry fraught with breaches and security lapses.

But before we hop on the bandwagon, let’s take a look at blockchain, its potential uses, benefits, and deficiencies, and how some early adopters are trying to leverage blockchain to innovate in the healthcare industry (at their own peril!).

What is Blockchain?

If you’re into digital currency, you’ve probably heard of blockchain. A blockchain is simply a list of blocks; a record that is linked to the previous record and secured by cryptography. The block will have three elements: transaction data, a timestamp, and a hash link to the previous block. As such, a blockchain can be a ledger of all transactions. Each block is recorded and then added to the chain according to when it was completed. This makes it easy for participants to see transactions without having to go through a centralized storage of records.

Blockchain technology was first created for Bitcoin, and it allowed people to exchange assets and validate transactions without a central authority, leveraging strong encryption for integrity. The best way to understand how blockchain technology works is to think of it as a spreadsheet that is duplicated on different computers, allowing everyone to see and make updates.

The spreadsheet is not stored in one central location and is accessible to the public. Anybody who wants to know about or verify a transaction can easily do so. What’s more, hackers can’t corrupt the spreadsheet because there’s no centralized version. That makes blockchains inherently secure, durable, and robust. There is no centralized point of failure and as a result, it’s very transparent.

How Can Healthcare Benefit from Blockchain Technology?

With all of these advantages, the healthcare industry with its need to constantly update electronic health records (EHR), should be a prime candidate for blockchain applications. A doctor sees a patient and adds to the record, the patient goes for an x-ray and the radiologist reads the doctor’s notes and adds her own, the x-ray gets added to the record, the doctor writes a prescription into the record, and the pharmacist reads it all to fill the script (and adds his own entry too).

It would seem that blockchain technology could help overcome current EHR issues like differing standards and architecture that are inherent in the current system for sharing patient information. Today, patient information is stored on an individual office or hospital database or in a network like a Health Information Exchange (HIE). Blockchain can help these organizations put these patient records on a nationwide database, making healthcare organizations more interoperable, mitigating problems like:

  • Keeping track of what data was exchanged and determining how it’s to be shared from one point to another. In order to share healthcare-related information, there has to be a HIE operator to oversee sharing and keep track of the data being exchanged.
  • Because the current system requires an operator, there is a high cost for every transaction. What’s more, most healthcare organizations don’t see much business benefit in investing in HIE initiatives because of low transaction volumes.
  • Creating a master patient index (MPI) because there are several patient identifiers that have to be taken into consideration. There are privacy issues with MPI as well.
  • The use of different standards including file formats, database names, and other factors that make it difficult to ensure compatibility between systems used by different healthcare organizations.
  • Limited access to integrated records.
  • And finally, there is still confusion on the rules, regulations, and permission in accessing patient records, which could mean that organizations might not be able to access the right data on their patients at the time they need it.

In theory blockchain technology is able to address all of these issues. For one, with blockchains, you do not have to have a centralized authority for HIE. This means that all participants would have access to the public ledger and that exchanging patient data is inherently secure. Without the need for an intermediary, data transfers over blockchain technologies are cheaper.

Blockchain also allows for close to real time updating healthcare information and the data is encrypted, making it secure and accurate. What’s more, you can use smart contracts to have consistent criteria for accessing patient data. These contracts are based on rules and should ensure that the right people access patient data at the right time. Moreover, each block is there and you cannot change, delete, or modify it. Transactions, once completed and recorded, are there forever. In sum, on top of being open, transparent, and permanent, blockchains make records easier to manage.

Emerging Use Cases for Blockchain in Healthcare

Most people talk about interoperability and security when talking about the use of blockchain technology in healthcare. However, other use cases are emerging. For one, you can use blockchain to standardize current systems. Some hospitals have different methods for entering patient data. For instance, birthdates may be written as mm/dd/yy, dd/mm/yy, mm/dd/yyyy, or spelled out in words.  With different departments entering different fields, it is easy to have non-standardized data floating around, even within a single hospital’s information system. Blockchain ties your patients to their data, not identifying characteristics.

Blockchain can also be used to automatically decide if a claim is denied or paid, even without human intervention. This rules-based automation can save countless of hours and is a fairer way to judge claims. You can also automate contracts for your suppliers this way. Another use for blockchain technology is to make data unidentifiable, making it appropriate for use when recruiting participants for clinical trials.

That’s the idea behind blockchain. But can theory become reality?

Challenges to Implementation

While blockchain has a lot of theoretical uses and potential to change the way healthcare professionals and organizations store, deal with, manage, and share information, there is one major challenge that may be impossible to overcome; Data size. Electronic Medical Records are huge. No, they’re bigger than huge. They’re immense.

Blockchain is a great distributed, immutable transaction ledger: it’s great for currency or asset tracking, but even that has scale issues. If you use it for data, everyone participating ends up having to copy a very large database that never gets smaller. That’s okay if you want an asset ledger without a central authority, but not if you want an efficient way to manage access to health records.

And there are other issues:

  1. Permissionless vs. permission-based implementations. Permissionless blockchain implementation, like Bitcoin, is great for those who want broader access and want to facilitate innovation. However, these are typically hindered by a limit on the number of transactions that can be done in a second. This means that if you want permissionless blockchains, you should be sure to allow for slower processing times. On the other hand, permissioned blockchains do not have this limitation, but you need to make sure that you have enough computing power.
  2. Data scope and standardization. Not all patient data is suitable to be on the blockchain. This is why when implementing blockchain technologies, determinations must be made on which pieces of information are to be included and what information should be kept off the grid. Consideration must be taken regarding the size of information that you put on the blockchain, because as we said earlier, large transaction sizes aren’t ideal for the technology. This is where standardization involving codes for procedures or services rendered must be adopted.
  3. Incentives for participation. Expect some resistance, as with any major change. But the reality is that blockchains become more useful the more users participate in it. Participation could also be external, such as when you want to make it attractive for individuals to let you use their computers as nodes in a permissionless blockchain network.
  4. Costs of setting up a blockchain. Blockchains are typically more budget-friendly than traditional information systems because the technology is open source, and it really doesn’t require constant monitoring, configuration, and administration. But because it’s a new technology, the costs of running these systems in the long run are not yet known.
  5. Regulations and compliance. There are several questions that the healthcare industry must ask when implementing blockchain technology, such as who owns the data, and what are the rules in order to grant access to the data stored in it? You should also make sure that you are in compliance with the HIPAA Privacy Rule, and that sensitive patient information is secure.
  6. Who would build the Blockchain for healthcare? Lastly, one of the main questions is: Who will build the blockchain for healthcare? Cryptocurrencies, such as Bitcoin, have their own blockchain going for them. No such luck for healthcare companies. Right now, it’s every man for himself.

Blockchain Products For Healthcare are Out There

SimplyVital Health currently offers two products: Health Nexus and ConnectingCare. Using blockchain, SimplyVital Health gives healthcare providers a way to save money and time by streamlining their data with ConnectingCare. This happens even after the patient is no longer in the provider’s care. Not only does blockchain provide an audit trail for providers’ patients, but it can also accurately forecast costs.

Health Nexus builds on that and aims to give healthcare providers more services, including sensitive data. Health Nexus aims to be the basic infrastructure for patient records, while also enabling providers to efficiently share this type of information. It also helps more people monetize their medical data. If individuals want to sell their data to interested parties, they can do so with Health Nexus.


Blockchain technology is still in its infancy. The companies touting blockchain in healthcare are niche players. They have to be as the technology just can’t support the massive data needs of current electronic medical record systems. The real barriers to EHR portability and governance are policy and regulation that create standards to which every vendor, payer, and provider must comply. It’s a formidable mountain to climb. That trek will be interesting to watch.

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