What does blockchain have to offer to healthcare organizations?

By Roger Smith, PhD, CTO, Florida Hospital Nicholson Center

Blockchain is a means of storing and exchanging data with vendors, partners, and patients that is strongly secure, verifiably accurate, and significantly more efficient than existing manual processes. It will become an integrated layer inside of dozens of current IT systems and will enable the creation of new services that cannot be fully automated today. Using cryptographic techniques, a blockchain creates a mathematically secure system of exchange and storage which cannot be falsified, deleted, or spoofed.

Businesses of all types currently use systems of manual checks and balances to create a level of trust and security that is sufficient for important business transactions. In healthcare, these include patient records, clinician certifications, insurance claims, pharmaceutical records, research data, employee records, and many more. But when manual steps are involved, those systems are slow and expensive to operate. Blockchain applications promise to deliver higher levels of trust and security at faster speeds, lower costs, and without manual human interventions.

Understanding the detailed inner workings of a blockchain system can be very involved and may require a background in computer programming, mathematics, and cryptography. However, healthcare leaders need not to dig that deep to come to an appreciation of why the technology has suddenly become such a hot topic and to identify a few internal problems for which the technology might be a solution.

Healthcare organizations are very risk-averse by nature and can be expected to approach these blockchain tools with caution.

Since blockchain is used to protect and exchange digital data of value between parties that are not part of the same trust circle, we should look for healthcare situations that contain these same features. Currently, hundreds of healthcare organizations, consulting firms, and systems integrators are searching for these matches between capabilities and needs. These groups have identified a small set of key areas that seem to be well-formed for a blockchain solution.

The first is in tracking pharmaceuticals and medical devices as they move through long, multi-party supply chains. Blockchain can provide a record of the provenance of these products from the initial manufacturer all the way to the final consumer. Such a record can play a valuable role in curtailing counterfeit products and theft. Today, it is possible for counterfeit or stolen drugs and medical devices to be sold into weak points in the supply chain. This is of tremendous concern to manufacturers and consumers alike, even when these products are a perfect chemical formulary or a fully functional device. A blockchain system would require that each lot or device be traceable back to its origins. With a blockchain, the validation of the product can be carried out in minutes and is 100% reliable and unforgeable.

A second application is in processing insurance claims that fall across multiple service providers. This blockchain would include all of the injury claims, conditions, expenses, and current actions on a claim. Parties privy to the contents of this chain can all see what has happened and how it is being handled, to include visibility by the patient who is usually kept in the dark on the status of their claims. The current opaqueness of the process is a problem for everyone involved in the transaction and blockchains can provide complete transparency that is strictly limited to authorized parties. Insurance companies are primarily concerned with ensuring that a claim is being handled within the terms of the contract and is not an instance of fraud. Accomplishing this with traditional systems is very labor and time intensive. Blockchain solutions should be able to reduce the processing costs for these claims, while also speeding up settlements. It is a win-win for all parties involved.

Finally, the most beneficial and most difficult application is in handling a patient’s personal health information (PHI) that currently resides in multiple disparate and barely interoperable Electronic Health Record (EHR) systems.  Every patient has noticed that when they visit a doctor, every office posts their results to a different EHR. Even within large, supposedly integrated, healthcare networks there are multiple EHRs in use because those systems grew through multiple acquisitions, each of which had its own legacy EHR. In this situation, literally no single organization has the ability to access all of the medical data about a specific patient. The patient can’t do it, the physician practice can’t do it, the hospital can’t do it, no one can do it. Blockchain idealists envision a future in which a healthcare blockchain exists separate from the medical providers. In this picture, the patient subscribes to a blockchain enabled service and personally holds the keys to the data on that chain. Then every time they visit a medical provider, the patient provides a public key to the provider which allows them to access past medical data and to post a new record on the chain. In this scenario, the patient has ownership, access, and control of all of their own medical data, which they do not have with today’s systems. The medical providers are also able to access a complete set of medical records through a single portal, something that is nearly impossible today. This is a beautiful picture, and it may be a reality someday. But the path from where we are today to something like this is long and complicated. There are many smaller steps to be taken with the existing EHR systems before we arrive anywhere near this ideal state.

These are just three of the most often cited applications of this technology in healthcare. There are literally hundreds of smaller concepts being developed for this industry and which will begin to appear in the next year. Healthcare organizations are very risk-averse by nature and can be expected to approach these blockchain tools with caution. Most will be looking for tools that can be implemented and tested without posing a threat to their core business. Ideally, these could be added as a new service that will differentiate them from competitors but without risking any downside to their traditional services.

Healthcare leaders who are interested in exploring the power of blockchain applications might consider following some very basic steps. First, identify internal problems that do not have solutions with the current IT systems. Second, select a blockchain pioneer to learn the technology and build relationships with external providers. Third, engage in the global discussion about the technology. Fourth, watch for viable products or services that align with your unsolved problems. And finally, begin by addressing a problem that will not threaten core operations. Blockchain applications are transforming the internal IT processes in the financial services industry right now and will spread to other areas as applications are proven for each industry’s unique form of data, regulations, relationships, and business operations.