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“How Blockchain Technology Can Transform the Healthcare Sector”

September, 27, 2018

Authored by Dr. Anandhi Ramachandran, Associate Professor, International Institute of Health Management Research.

Blockchain is a de-centralized distributed digital archive collectively maintained by a network of computers, called nodes. One individual alone cannot modify the data. It requires permission from everyone else who maintain the particular record.  Blockchain technologies have long been associated with cryptocurrencies as the primary method by which data integrity and security across networks has been successfully maintained. According to research portal, PRSnewswire, the global blockchain market is expected to be worth USD 20 billion by 2024. Financial firms such as banks, for example, often need to deal with vast amounts of complex data reconciliation and verification processes, which form a substantial cost to the firm’s annual revenue. Blockchain fundamentally shifts the platform to a shared and distributed database that can be shared across multiple organizations without compromising on data privacy. Permissions can be restricted based on user type and transactions recorded, updated and validated on all the nodes in a network simultaneously. This saves them USD 8-12 billion on an annualized basis. Blockchain applications to healthcare, in view of the increased use of digital systems to maintain electronic health records, finances and insurance claims, are also expected to return similar dividends.

How Blockchain works to benefit healthcare systems

In a typical hospital setting, transactions occur frequently. From patient registration, payments and account tracking and therapy outcomes, health indices and costs are being monitored continuously. Each participant can be associated with her own electronic ledger with attributes that are distinct from other participants. The simultaneous existence of multiple ledgers can give opportunities for fraud, error and inefficiency. But now that each computer system shares a copy of all ledgers, information can be checked and verified against all other copies, redundancy eliminated and vulnerabilities significantly reduced. Unlike centralized databases, blockchain works over distributed systems. Cryptographic codes are auto-generated for different levels of users and the role of an intermediary is ruled out, thereby limiting the number of points of exposure and access to sensitive data. Paper use is also drastically cut down, thereby barring the possibility of delays and potential losses for stakeholders.

Data integrity and inter-operability

The crucial characteristic of blockchain is that a block of code registers changes in the state of a record immutably and also works to restrict complexities of algorithms that govern the manner in which changes are made. Block chains maintain records of every change that takes place in data, track real-time records of every permanent transaction, hold certificates of authenticity and track service details along the value chain.

They help free up capital for business organizations, reduce transaction costs, speed up processes and provide security and trust across networked systems. It also allows for easy interoperability of health data between hospitals, clinics and doctors.

Some of the key areas where blockchain technology is likely to impact future healthcare are as follows:

  • Maintaining the integrity and interoperability of medical records. Wherever medical records are generated, they may be added to the end of the blockchain providing absolute proof of advice and patient indices because this data cannot be changed. This aspect is particularly important for clinical trials and medico-legal cases which hinge on integrity of data.
  • Managing permissions. Patient consent forms maintained on paper often lend themselves to tampering. With new interpretations of privacy regulation coming up, it has become very important to record consent for purposes of data sharing by informing patients through permanent records.
  • Managing payments. Customized care plans for the patient can be better implemented through use of the blockchain, tracking appointments and health indicators and rewarding patients for contributing their data to clinical trials and research.

Limitations of Blockchain technology

All this is not to say that there are no impediments to adoption of blockchain technology in healthcare. Experts point out that blockchain still has not been tested against large data sets. It does not make itself automatically amenable to data analytics – the precise requirement of data fed into healthcare intelligence systems. Performance of transactions is slow. But as a proof of authority and character of immutability, this technology has no equal at present.

More improvements in algorithm design and network implementation are required. Indiachain is Government’s plan to implement block chain infrastructure as a complimentary to India Stack. Smart Contracts a derivative of block chain technology has been developed for implementing policies in claims processing.

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