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Enhancing Patient Care with Blockchain

April 23, 2019

by Akash Kapur

This article looks at the core features of blockchain technology, the various applications of blockchain in healthcare, and the challenges that need to be overcome.

From relative obscurity to mass popularity, blockchain technology has come a long way since it was first described in a research paper by Stuart Haber and W. Scott Stornetta.

A large share of the credit for this goes to the world’s first and most famous cryptocurrency, Bitcoin.

In recent years, even as the interest in Bitcoin somewhat wanes, the interest in Blockchain has picked up tremendously. Several industries are undertaking research and development in this field. While the Banking and Financial Services industry is a trailblazer in this field, others are also catching up.

Healthcare is one such industry. As per an IBM report, 16% of healthcare respondents expected to have a commercial healthcare application for blockchains 2017. A more recent report by PwC stated that 49% of the 74 global healthcare companies it contacted are developing, piloting or implementing blockchain targets.

Given the scale of adoption and its potential to disrupt, it is high time that those healthcare firms that have not yet explored blockchain tech to start researching it soon. In this article, we’ll discuss various potential use cases of this technology for various stakeholders in the healthcare industry.

The Basics of Blockchain

A blockchain is a record of information, called a ledger, that is distributed across many different devices instead of being stored at a single, central point. All the users on a blockchain network, known as “nodes” have copies of this ledger.

Information is added to this ledger in the form of blocks. Each block consists of a large set of individual information (in the case of Bitcoin, these are individual transactions). This block is then encrypted using an algorithm called a “hashing function.” This function generates a unique fingerprint for the block, called a “hash”.

It is then shared with the blockchain network for validation. If a consensus is reached about the validity of the block, it is added to the chain.

In order to maintain the sequence of data, each block contains the hash of the previous block, thus creating the chain.

an illustration of the original blockchain structure

The major features of blockchains are:

  • Consistency – each node on the blockchain possesses the exact same copy of the data
  • Transparency – it is easy to track changes being made to the information on the blockchain
  • Decentralization – information is distributed across a wider network instead of being centralized
  • Immutability – it is extremely difficult to edit information already added to the chain
  • Security – encryption and access-control features ensure that users can control who has access to their data
  • Consensus – information can only be added if a majority of nodes verify it, reducing the risk of adding incorrect/invalid information
  • Smart contracts – they offer the capability to automatically carry out actions if certain conditions are met

Applications of Blockchain in the Healthcare Industry

The healthcare industry, while a vital part of society, has long struggled to overcome several issues that hamper its efficiency.

Crucial pain points include interoperability, incomplete or inaccurate patient information, cost of compliance (time and monetary), and risks of a breach or misuse of patient data, to name a few.

Here’s how blockchains can address these:

Managing Patient Data

The management and sharing of patient data is a major problem being faced by the healthcare industry. Due to a lack of a central, unified database of a patient’s medical history and the lack of interoperability between various members of the healthcare ecosystem, doctors find it difficult to personalize treatments to suit a patient.

As per a 2007 report in the Journal of Biomedical Informatics, “Up to 18% of the patient safety errors generally and as many as 70% of adverse drug events could be eliminated if the right information about the right patient is available at the right time.”

The lack of a secure infrastructure for data sharing also hampers medical research. As there is no common database, researchers find it difficult to access all the information they need.

Lastly, there is the issue of data ownership: the CMS recently declared that data belongs to the patient. However, in the current system, it is extremely difficult for patients to access their data, let alone take ownership of it.

Here’s how blockchain can help manage data better


Long seen as the holy grail of modern healthcare, blockchains can help the industry achieve this elusive goal.
In a blockchain network, all the partners on the network have access to the exact same copy of data at all times. This means a doctor needing immediate access to patient information can easily access it through the blockchain. By implementing access-control features, blockchains can also ensure that patient data cannot be shared without their knowledge or consent.

Here’s how this can work: each patient on the chain is assigned a public and a private key. These keys are basically hashes that can be used to identify the user. The public key is known to the entire network and points to the private key, which is known only to the user.

Every time a healthcare provider updates or collects information regarding the patient, this data is stored on the blockchain along with the patient’s public key. This way, when another clinic or an insurer needs to access this information, they can easily find it through the patient’s public key. As they already possess a copy of the blockchain, they can access the data instantly.

Data security and validity

Blockchain can also enhance information security in a variety of ways.

The first is by controlling who has access to the data: in a private, permissioned blockchain, the data is only visible to those who are a part of the chain. Additionally, no one can join the network without the permission of the network administrator or the agreement of a majority of the members. This can help ensure that only verified, trusted firms have access to patient data. This removes the need for costly and time-consuming data validation checks: as each member is a trusted partner, the data they share can be assumed to be valid.

Another feature of permissioned networks is that different members of a network can be given different levels of access to the information based on their roles. Hospitals may be given permission to read and update all sorts of patient data on the blockchain while researchers may only be allowed to read the data.

The second way in which blockchains ensure data security is through their use of hashes and consensus protocols.

Each block contains the hash of the previous block in the chain, which is how the ‘chain’ is formed. Now, an important property of hashing functions is that even for the smallest change in the input they receive, they generate a completely different hash. So, if a user modifies the information on a block, the hash of the block will change. As far as the blockchain is concerned, the edited block is as good as a new block as it has a different ‘fingerprint’. This will break the chain as the following block will still be pointing to the old hash.

A dedicated hacker could still try to recalculate the hash of each successive block to ensure the chain remains intact. However, when this modified chain is shared with the network, the other nodes will refuse to validate it as this chain will not match their copy of the data. As no changes can be made to the chain unless the network reaches a consensus, these edits will be rejected.

This makes hacking a blockchain very difficult.

What’s more, as every action is traceable, the network administrators can easily identify such malicious actors and revoke their access to the blockchain.

 illustration of data sharing using blockchains in healthcare industry

Data sharing now (L) and data sharing with blockchain (R)

Data ownership and sharing

Public-private keys and smart contracts can also help ensure that patients are in full control of their data.
The blockchain can be programmed with smart contracts that allow entities to access a user’s data only if the user consents to it. Entities requiring access to the information can raise a request using the smart contract.

The user can choose to approve or reject the request, and sign their response using their private key. The private key then encrypts their response and sends it to the network along with the public key. The smart contract can check this public key to verify if the response received was given by the user in question. Once this is verified, it shares or declines to share the data as per the user’s response.

Alternatively, users can preconfigure the smart contract with their preferences of whom to share the data with, what access to give, and for how long. This way entities wanting access to this information can simply check the smart contract to see if they are allowed to use it.

This gives patients control over who has permission to access or modify their data.

Smart contracts can also be used to incentivize users to share their information for research purposes.

Instead of attempting to buy data from third-party sources, researchers can directly approach the user through smart contracts that reward users for sharing their information.

Users who agree to share their information can be automatically rewarded with tokens which can be redeemed for money. This will make it possible for researchers to get accurate data at lower costs. It will also reduce the time taken to access this information.

Drug Tracking and Supply Chain Management

The drug supply chain is another field wherein blockchains can be used to improve security and enable real-time tracking.

The existing processes involve manual intervention at several stages. This increases the risk of inaccuracies due to human errors and the overall time taken by at each stage of the process.

an illustration of the current supply chain tracking model for pharma (courtesy PwC)

Source: PwC

This also leads to gaps in the system which make it easier for counterfeit drugs to enter the system. As there is no unified record of a drug’s history, it becomes hard for pharmacies and end users to verify the authenticity of the drugs they sell/consume.

This is a major problem as counterfeit drugs often do not contain the required ingredients, rendering them ineffective. In some cases, the counterfeit drugs may be of a higher dosage or may other ingredients, making them potentially fatal for the end user.

Blockchains, combined with the Internet of Things (IoT) can help solve some of these problems.

Here’s how blockchains can help enhance the drug supply chain

Blockchains can be used to track drugs from their production all the way to the end-user.

Each batch of drugs produced is registered on the blockchain by the manufacturer. This information contains the serial number of each unit, the type of drug, date of manufacture, etc. A key part of preventing counterfeit goods from entering the system is ensuring that only manufacturers are allowed to add drug serial numbers to the blockchain.

These drugs are then given to a third party logistics provider for shipment. Each unit of the drug or each transport vehicle (or both) is linked with IoT devices connected to the cloud that continuously report the location of the batch. This information is continuously added to the blockchain, allowing the manufacturer and the distributor to track the drugs in real-time.

The distributor can then break up the batch into lots of different sizes to fulfill various orders. The information for each lot and the accompanying transaction information is added to the chain. This way, everyone, from the pharmacies to the manufacturer knows exactly which unit of a drug has gone where.

An illustration of a blockchain-connected drug supply chain tracking system

Source: PwC

As the blockchain contains the entire history of the drug, it is easy to verify if the authenticity of the drugs. This also makes it easier to recall a batch of drugs in the event of product issues/regulatory requirements.

In the near future, logistics vehicles can even be equipped with temperature monitoring IoT devices which can automatically update the use-by date of the drugs in case they get exposed to higher than recommended temperatures.

Blockchain and IoT can even be extended further up the manufacturing process to track the sourcing of ingredients and each step of the production process. This can help track any issues in the production of drugs at an early stage itself.

Claims Management and Payment

Back-end processing is a highly time-consuming and expensive part of the healthcare process. It is estimated that about 18% of healthcare expenses in the US were related to billing and insurance activities.

One reason for this is the work involved in claims management.

The current claims management system is slow and requires a lot of work. Providers need to verify whether a patient is insured or not and the terms of their insurance to decide how much to charge them.

Payers (insurers) need to verify the services accessed by the patient and the terms of their plan before deciding how much of the claim to pay.

In between these two sit the middlemen known as clearinghouses whose job is to clean, audit and format claims received from providers before passing them on to the payers.

An illustration of the current medical claims processing system

Source: CBinsights

Here’s how blockchains can streamline the medical claims process

Blockchains can solve the issues present in the existing claims process through the implementation of smart contracts.
Insurer’s blockchains can be programmed with the smart contracts for different policies built into them. When a new user takes out an insurance policy, they will be made a party to the relevant smart contract. Each smart contract will contain the agreements relevant to that particular policy.

As each member of the network has an exact copy of the blockchain information, hospitals merely have to check the patient’s unique ID against this information to identify their insurance plan.

When the hospital updates the blockchain with the treatment given to the patient, the smart contract will automatically check this information against the conditions of the policy and release funds accordingly.

Thus, by implementing smart contracts, insurers can automate the process of claim verification and payouts. This will lead to a faster, more robust process and a better overall experience for patients as well.

Other applications of blockchain in healthcare

In addition to those listed above, there could be several other ways to apply blockchains in solving healthcare problems.

One interesting application involves the use of IoT-enabled wearable devices. There are a host of startups trying to leverage fitness devices like Fitbits or simple app-based tracking solutions to gamify fitness.

Healthcare operators can adopt a similar technique by using wearables to track user activities (movement, exercise, blood sugar levels, etc.). By linking these devices to a blockchain, doctors can easily track a user’s activities in real time and see if they’re following the recommended action plan.

Users can also be incentivized for good behavior and penalized for bad behavior through smart contracts which reward/punish users automatically based on the device data.

Other applications could include:

Real-time regulatory and compliance checks. This could reduce the costs of ensuring compliance and ensure that non-compliance is detected in real-time.

Unified provider and payer database. This could reduce the duplication of effort and cost involved in a new provider getting registered on multiple healthcare service networks. Instead, the provider or payer can simply register on a common, shared database which can be accessed by each healthcare network.