Blockchain Challenges, Opportunities, and Application in the Healthcare Industry
Aug, 28 2018 | blockchain

Blockchain in Healthcare Industry

It is wrong to join the bandwagon of critics who consider blockchain technology’s popularity a hype while there are growing businesses demand for revolutionary changes in all their aspects cum technological progress. It is rather fortunate to lean for a minute and think about the technology’s impact across boards since it is unveiled, and one would realize it probably worth even more than the current praise. Although not the perfect of technological inventions, it is wide a gap above its counterparts in a contest of efficiency and coverage in as many directions. Many more industries of the world are seeking opportunities to leverage on the blockchain benefits by the day. Why then should one be on the critic bench when it could be as useful and impactful for his own industry with a trial?

The healthcare industry is a growth oriented one. It is always striving and scavenging for technological inventions to better its operation, scope and quality assurance being an industry that have a delicate connection with human. More could be sad about the urgency of growth in the industry as well considering its landscape shifting towards a more patient centered approach which prioritizes affordable treatment and quality health facilities. Since it is aware of the blockchain technology and the mighty strings it pulls across boards and bounds, it is prepared to leverage on its swarm of opportunities to better operations.

Heads up! It is okay to ponder about how to implement blockchain in healthcare industry, but perhaps not as intelligent to query the capacity of the groundbreaking technology that allow a decentralized operation, secure distribution and sharing of data as well as transaction across multiple subjects in transforming the health sector except for its further development. Without much ado, one should be able to realize how useful the technology could be with electronic health records among other usage.

The living truth is that the enticing possibility of blockchain technology in the healthcare industry is not limited to electronic records distribution and sharing. There are much more to ponder on regarding optimization of pharmaceutical supply chain, fraud minimization, centralization of clinical trial and outcomes to drive innovation as well streamlining of billing and claim management in the industry. There is an increasing enthusiasm for the potential of the technology to address previous weaknesses in the industry’s IT infrastructure (particularly in the areas of data sharing and storage) as time passes, this made a research based firm release its finding about blockchain’s impact on the healthcare market so far in the midyear of 2018 as represented in the table below.

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Blockchain in the Healthcare Industry (Highlighting healthcare industry problems technology is expected to solve)

It is easy to say that the healthcare industry is interested in the blockchain technology given its efficacy in the aspect of data integrity, transfer of value, authenticity and validations and electronic coordination of medical supply chain without loss and delay. Unarguably, there are still skepticism and concerns about the use of the disruptive technology across industries, including the understudy healthcare industry. However, it is believed that when rightly deployed, blockchain would be a perfect game changer, while it would probably meet the following previous challenges in the industry;


  • Inability to express trust in validation of healthcare transactions
  • Exclusion of intermediaries as the course of inefficiencies and untrustworthiness
  • Challenge of information alteration in a share repository by multiple parties
  • Removal of data insecurity and concerns around transaction integrity


Looking at the highlighted quarters of previous or current inefficiencies in the industry, there is no argument about blockchain in the healthcare industry being the right solution for its worries. One should not expect any result shy of greatness in the way the technology would tackle those challenges considering its best features, unique characteristics and operation techniques. Healthcare and blockchain could therefore be the perfect complement to take the industry to a whole new level of standard attainment.

Implementing blockchain in healthcare

Blockchain use in the healthcare industry is based on three major principles that long existed. It is believed that the combined activities of the principles would provide safe and secure digital relationship cum information management in healthcare organizations.


Distributed ledger: Also known as shred ledger, it refers to consensus of shared records. A distributed ledger is updated in real time and possess no central authority for maintenance. Rather, a network of participant (blocks) ensure the updates of the ledger, making any changes made in the system reflects in matter of seconds.


Private Key Cryptography: This consist of a secret key along with an algorithm which functions to both encrypt and decrypt codes. The key is always kept secret even when the algorithm is not. This maintains that while a reference of the secure digital identity s created, transactions are made open on the network.

Data Authentication: The third principle blockchain technology runs on is authentication. This is a process that proves genuineness. This principle ensures that all transactions are authenticated before being added to chains of blocks. Algorithm ensures the validation and verification of all these transactions to decipher that information are encrypted, digitally signed and stored. This is only when authentication can be sealed.

The Use Case of Blockchain in Health and Medicine


There is no gainsaying that Blockchain is the most discussed technology in the world at the moment. There is a great potential of this technology in many industries and the health sector will be completely transformed if we decide to implement Blockchain technology. Implementing blockchain in healthcare industry could as well be easy like in others once particularity and peculiarity are well analyzed in the focused areas of use.

There are many possibilities within this new technology that facilitate the way of doing things, this enormous potential is becoming increasingly bigger and in this part we will see the impact and the cases of use of this new technology in the health sector.


The cases of Blockchain use in the health sector and examples:


At first sight, the element of transparency seems to be very out of place in the health sector. However, transparency in this context does not mean that the process is quasi, transparent and unauthorized people can see your data. In fact, exactly the opposite is true: Blockchain has the potential to bring the health sector closer to the centralization of the patient.

Patients, health providers or health organizations can collaborate using Blockchain and these are the main use cases:


  • National interoperability
  • Accessibility to medical records
  • Precision medicine
  • Smart contracts
  • Digital identities of the patient

The current management reality of medical data is alarming in most parts of the world. Available data are also often misused, thus preventing healthcare organizations from delivering the best quality services to clients. Although the current global reality of the healthcare sector mirrors that they are being fairly efficient in terms of economy, they are still unable to fulfil patient needs. Few statistics in the US have emphasized this. For example, it was recorded that nearly 50 percent of clinical trials in the US go unreported while close to 40 percent of healthcare provider records are either misleading or filled with errors. Consequently, data breaches across health care organizations are estimated to cost the nation up to $380 per record with a probability of even greater increase with the passing of time.


More prevailing issues consequent of poor data management and the use of outdated system give rise to drug counterfeiting. This problem has over time caused the US healthcare industry losses of around $200 million. However, the use of technically advanced system like the blockchain technology would undeniably diminish the losses drastically by tackling the root of their causes. For example, drug counterfeiting problem would be solved via accurate tracking of drug supply from pharmaceutical firms to hospitals.  The supply chain would be given a close watch to detect any sort of foul play and quickly give them a counter reaction.


Further, the management of medical data in the form of digital records of patients based on the Blockchain technology can make even patients the “master of the data”. This is one huge blockchain use case in healthcare.

An example of this is MedRec, a Blockchain-based technology for the management of electronic patient records. Tests such as X-rays and CT images, drug histories and the like can be stored in external databases and refer to Blockchain. This means, therefore, that the data is available in the existing computer systems in the corresponding health care provider.

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An index refers to this data in Blockchain and manages the corresponding access rights. The patient can decide for himself who can access his data, and can access it at any time himself. This considerably simplifies the cooperation between the different specialists who treat the patient, as well as the storage and administration of their personal data.


More areas of opportunities and use of the technology in the healthcare world include;


Increased security in data systems


There are many ways healthcare and blockchain can be interrelated to foster improved service in the industry. In the administration of a large volume of information as occurs in health institutions, it is frequent the presence of errors of personal diligence as they are the loss of data or the manipulation of the same, so that they are inconveniences that are presented as a lack in the current management method.


The blockchain technology thanks to its immutability and the time stamp of each block has taken blockchain use case in healthcare to a whole new level.  It ensures avoidance of the presence of eventualities guaranteeing the immediate availability of the data, as well as the truth that they are accurate and have not been altered at any time.


Likewise, the vulnerability to which central servers are subject to suffer any kind of attacks intended to steal or destroy any type of information, would be solved by the decentralization of the platform and the work of the nodes in the network.


New alternatives in the payment of health services


Blockchain being a technology closely linked to finance, this could not be an aspect left aside in the provision of health care services, innovating and facilitating new forms of payment in the different types of centers dedicated to this area. Blockchain in healthcare industry is thus not an idea under incubation, rather one that has been shaping transactions in the industry already.

The implementation of smart contracts would also play an important role in the industry, allowing both the hiring of specialists, as well as health plans or insurance for users. In addition, blockchain technology would open the door to new alternatives in terms of payment methods, either through a cryptocurrency or the creation of a token by a company dedicated to health.


Quality service guarantee

Proprietary function, agreement and terms as well as legal requirements of firms in industries are now run and mastered electronically. Same is the case with compliances and copyrights. These altogether alongside certificate of practice or outstanding performance as the case may be usually serve as attestations to quality services that are attainable in an organization. Implementing blockchain in healthcare only makes it better as potential patients could check and attest to firm registration details, certificates and compliances for authenticity via the technology. This share of transparency speak hugely of quality service guarantee in healthcare establishments.




Blockchain clearly has enormous potential in the health sector. The challenge now is to exploit this potential by creating well-designed and clearly structured applications. How more to implement blockchain in healthcare industry thus seem a question still begging answers, but there are no doubts about its potential in the reduction of complexity, the potential for decentralized collaboration, the creation and administration of authentic and secure data.


Health systems are very traditional in the management of their operations, so it is not a simple task for an emerging technology to become so easily part of its operation. The integration of what its processes suppose with a totally different platform, deserves a drastic change to which they must adapt progressively. More needs to be done to make healthcare and blockchain a formidable complement probably via development of more apps and software centered on medical uses.


Most of the solutions based on this technology appear still at the initial stage and their uses, without a doubt, have yet to be tested before they can be fully integrated into the health system. If fully implemented and harnessed, it is more than a confident assertion that blockchain is the newest best thing to have happened to the healthcare industry.