Improving Healthcare Solutions with implementing Blockchain

A recent survey by Black Book — a Tampa, Florida technology market research company — found that 80% of healthcare payers were either considering deploying or were in the process of implementing Blockchain solutions. Other findings from the study included:

  • 95% of hospital and medical group IT specialists and management agree that Blockchain may resolve and expedite most concerns of interoperability and patient record sharing.
  • 93% of managed care organization respondents, 70% of hospital respondents, and 58% of physician practice respondents said that blockchain shows promise for healthcare interoperability.
  • All survey-responding payers with plans of 500,000 members are actively considering deploying or are in the process of deploying Blockchain for Q4 2018, and 20% are involved in trial deployments in some form1

What is Blockchain?

For those of you who don’t know, Blockchain is a technology that stores identical pieces of information across a peer-to-peer network. Therefore, it’s not controlled by a single entity and it has no single point of failure. Once a transaction is recorded in the Blockchain it cannot be edited, changed, or removed by anyone in the network — it’s read-only.

Invented in 2008, Blockchain was originally applied to the financial industry — it served as a framework, offering the necessary security for Bitcoin to operate.

Blockchain for Medical Data Management

Currently, many U.S. cities use multiple electronic medical records systems. These systems have different languages for representing and sharing data. Therefore, critical information is often scattered across several facilities and may not be accessible when it’s needed most. The inability to access this data costs an immense amount of money, and in some cases, lives.

Blockchain could remedy these issues by consolidating patient records on a single decentralized ledger, like the one underlying Bitcoin. Every doctor’s visit, prescription, hospital stay, etc would be added to a virtually incorruptible database, accessible to anyone running the software. This would give healthcare providers one-stop access to each patient’s full medical history, saving time, money, and a duplication of procedures.

Blockchain for Drug Traceability

Counterfeit drugs cost the healthcare industry between $163 and $217 billion per year, according to PwC2. In addition to damaging the bottom lines of major pharmaceutical companies, these counterfeit drugs also tarnish reputations and brand names. But beyond these financial costs, counterfeit pharmaceuticals take a greater toll — human lives. In a given year, they kill about one million unsuspecting victims across the globe, according to World Health Organization estimates. Although counterfeiters used to target third-world countries, they’re becoming smarter, using technology to penetrate the security systems of developed nations.

The typical digital supply chain consists of multiple trading parties — however, most transactions ( orders, purchase orders, advanced ship notices, etc ) occur between only two partners. This means that, as a drug moves through the supply chain, each vendor must trust that the previous vendor performed its duties appropriately. The records do not necessarily flow from party to party — in order to receive them, trading partners often have to trace the supply chain backwards and contact previous vendors. This is an inefficient and time consuming process that is vulnerable to both human error and fraud.

Vendors that conduct their business through a Blockchain ledger have a decentralized record of every event in the supply chain. Every step of the process is visible to every party with an access key. This transparency greatly improves compliance checks. Additionally, Blockchain’s immutable properties ensure that no records are forged or tampered with.

Blockchain for Claims and Billing Management

Fraud accounts for an estimated 5-10% of healthcare costs each year. It’s especially common in the Medicare program, which faced $30 million in fraud-related losses in 20163. Medicare is plagued by three common scams: phantom billing, patient billing, and upcoding.

  • In a phantom billing scam, the medical provider Bills Medicare for unnecessary procedures, procedures that were never performed, unnecessary medical tests, medical tests that were never performed, or unnecessary equipment.
  • In a patient billing scam, a patient provides his or her Medicare number to a provider in exchange for kickbacks — the provider bills Medicare and the patient pretends they received the medical treatment.
  • In an upcoding scheme, the provider inflates bills by using a billing code that indicates the patient needs more expensive procedures.

Aside from these common types of fraud, billing errors — often stemming from insufficient documentation — cost the program additional funds.

Blockchain can automate the majority of claim abjugations and payments, removing intermediaries who could otherwise tamper with these processes. Its decentralized records would improve logistical tracking and transparency, allowing auditors to quickly identify billing discrepancies. In addition to reducing fraud in the billing process, Blockchain would significantly lower its administrative costs.

Blockchain for Cyber Security

According to the 2016 Protenus Breach Barometer report, there were 450 health data breaches in 2016, affecting over 27 million patients. Approximately 43% of these breaches were caused by insiders and about 27% were due to hacking and ransomware4.

Additionally, the healthcare industry is increasing its use of connected health devices — known as the IoMT ( Internet of Medical Things ) — at a rapid rate. There are currently over 3.7 million digital medical devices in use that collect data from patients’ bodies to inform healthcare decisions. According to a recent Research and Markets study, this number will climb to an estimated 20-30 billion by 2020. This growth in IoMT devices and data will put a strain on the existing Health IT infrastructure and architecture, which is already vulnerable to security breaches5.

Blockchain solutions can ensure seamless interoperability between the IoMT, while also providing the privacy and security needed to handle sensitive medical data.

Blockchain for Medical Research

Currently, with thousands of disparate medical systems in play, there is no centralized hub for researchers to process all the clinical trial and patient outcome data that’s generated each day. This creates a massive amount of unnecessary legwork — researchers must coordinate with a wide range of separate care providers and regulators to receive the data they need for their studies. The response times of these entities can vary, often delaying the process.

Blockchain’s decentralized ledger would store all of this data in one place, anonymously. Then, once a researcher had the necessary credentials and permissions, they could access it instantly. This would eliminate bottlenecks in the research process, accelerating the future of medicine.

Drawbacks and Challenges

The same Black Book survey found that:

  • 68% of payers expected Blockchain to be integrated into their systems by the end of 2018, however, only 12% of provider health organizations and systems have firm plans to implement Blockchain by then.
  • The undetermined cost of Blockchain solutions causes 88% of provider leadership respondents from committing to a time frame for deploying Blockchain.

Though Blockchain would provide obvious benefits for the industry, healthcare providers and payers are hesitant to make concrete steps towards adopting this technology.

Success Cases — MediLedger

Despite these challenges, successful Blockchain projects like the MediLedger have been launched. The MediLedger is an ongoing project that’s bringing pharmaceutical manufacturers and distributors together on a single Blockchain.

This Blockchain is programmed with the requirements of the U.S. Drug Supply Chain Security Act (DSCSA), ensuring its members comply with industry regulatory standards. With the necessary credentials, trading partners and regulators can access the cryptographically secured ledger and verify supply chain transactions.

This project is still in its early stages, but the eventual goal is to create an open-system architecture that includes all the industry’s major supply chain participants and service providers, ensuring every supply chain transaction in the healthcare industry will be recorded on a single immutable ledger.

Success Cases — Robomed Network

This revolutionary Blockchain is designed to mitigate medical errors, which are the third leading cause of death in the world. The Robomed Network connects patients and care providers via a smart contract — but the criteria of the contract is rests on the result of the treatment, not on the process itself.

For instance, a patient would pay for their appendectomy only if it was successful. And that price would stay fixed, regardless of the number of operations or resources it took to achieve this result. This incentivizes doctors to operate with the utmost precision and removes their ability to upcharge for unnecessary services.

This project was first launched in Russia and Dubai and, as of the end of 2017, it served nearly 9,000 patients. Robomed’s goal is to empower patients and fundamentally change the way the world pays for healthcare.


The Harvard Business Review explained it best: “Blockchain isn’t a disruptive technology; it’s a foundational technology.” To reap the benefits of Blockchain, healthcare providers and payers must make it a fundamental part of their infrastructure. This will take time — decision makers need to fully understand and trust Blockchain technology before they make this leap. But, when they do, the industry will flourish from unprecedented transparency, data accessibility, and security.


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