An Introduction to Blockchain as a Healthcare Innovation

Blockchain was introduced in 2009 when Satoshi Nakamoto released the initial version of Bitcoin software. Originally envisioned as a way to make secure, anonymous and decentralized payments online, blockchain would eventually offer much more than just the Bitcoin technology it underpinned. Today, blockchain applications range from supply chain management to secure online voting. Perhaps one of the largest and most significant innovations stems from how blockchain may revolutionize the healthcare industry.

What is a Blockchain?

A blockchain is a distributed ledger, characterized by blocks of information chained together. One block leads to the next; all blocks are connected in this way. These records are timestamped and distributed to all instances of the blockchain, making the information reliable and immutable. When the blockchain is updated, all nodes in the network must agree to that the information received is correct.

Private Blockchain as a Secure & Efficient Internal System

The most well-known blockchains are public ones, such as Bitcoin or Ethereum. Anyone with an internet connection may read, write, and participate in a public blockchain. As this is not suitable for the healthcare industry, private blockchains are the ideal choice. Private blockchains – also known as permissioned blockchains – only allow trusted individuals with designated levels of access to read or contribute to the blockchain. A bespoke private blockchain may also be designed for each individual application.

Public blockchains typically provide minimal storage size and lengthy transaction times. Private blockchains, on the other hand, allow for quick access and can be built for extensive storage of records and information as required by a medical institution.

Private blockchains provide advantages toward security and privacy of confidential records. Data stored in a blockchain can only be unlocked with a private key. This key also identifies the patient to which the record belongs. Due to the nature of hashing – a cryptographic technique – these records are nearly impossible to hack. Patients can give their private key to trusted individuals or organizations to provide convenient and secure access to their data.

Patient Data Management

In modern healthcare, the most prominent application of blockchain is for securing patient records - which, due to the nature of blockchain, is immutable and cannot be manipulated. Data security grows even more important as more medical records are stored electronically on a daily basis. Patient data contains medical and prescription history among other sensitive, high value information. For this reason, patient records remain a major target for hackers. From 2009 to 2017, over 176 million patient records were stolen or exposed in data breaches.

There are many organizations already using blockchain for the purpose of secure patient record storage. Two examples of such blockchain healthcare use cases today are BurstIQ in the United States and MedicalChain in the United Kingdom; both facilitate the secure storage and sharing of up-to-date patient data while ensuring its immutability.

Patient data is anonymized and can only be decrypted with private keys. If the patient gives permission, this data is easily shared and accessible. This aids communication between doctors, hospitals, and other medical practices, where sharing patient notes has always been a challenge. The features of a private blockchain provide a way of doing this quickly and securely. Lastly, the benefits extend beyond securing data from unauthorized access. The nature of blockchain dictates the establishment of a single source of truth for patient records, so that when they are accessed, all information is up to date.

Secure Flow of Information

Poor communication between clinicians costs the healthcare industry as much as $11 billion every year, according to a study of 400 care providers by the Ponemon Institute.

The same study also found that half of the average time taken to admit a patient – 51 minutes – was, in effect, wasted due to communication inefficiencies. Aside from factors such as poor communication infrastructure and general lack of technology, much of the time wasted was spent on establishing facts that could have easily been retrieved if they were stored and distributed through a blockchain.


Quickly accessible, trusted information would also give doctors and nurses the overview they need to properly judge a patient’s progress. This would largely mitigate other inefficiencies in the healthcare industry such as high readmission rates, delayed discharges, and poor patient flow management.

For instance, Coral Health Research and Discovery, a Canadian company based in Vancouver, has developed a tool that connects all parts of a patient’s treatment together through a private blockchain. Updates from doctors, pharmacists, lab technicians, and public health actors are all added to a patient’s blockchain record. This promotes quicker treatment decisions and ensures the accuracy of treatment data.

The benefits of blockchain can kick in before a patient even enters the hospital. Robomed, a Russian company, combines blockchain with artificial intelligence. By monitoring through wearable devices, telemedicine sessions, and an always-available chatbot, Robomed can guide a patient to the right care provider when needed. Medical information gathered from monitoring is shared with care providers, meaning that much of the work typically done to diagnose a patient is already available to the doctor.

Though patient data management and transmission are two of the largest blockchain healthcare advantages, there are still less obvious uses that would provide no small amount of benefit.

Drug Traceability

Drug counterfeiting is a prevailing issue, not just for pharmaceutical companies, but also for patients. There is significant financial loss and health threats posed by fraudulent drugs that either don’t work or could be harmful, if not life-threatening, to the taker. The attraction of cheaper drugs remains strong, especially in developing countries, where 10% of drugs sold are substandard or fake, according to the World Health Organization (WHO). On top of this, WHO estimates that 16% of counterfeit drugs contain the wrong ingredients, while 17% have the wrong dose. This trade in knock-off drugs costs the healthcare industry billions of dollars annually.

Blockchain solves pharmaceutical forgery through traceability of drugs. Each step of the manufacturing and distribution processes is recorded. Every pill can be traced back through the entire process through a key on the packaging. Only legitimate companies would be given permission to put items on this private drug blockchain, barring fraudulent actors from access.

When a drug is produced and packaged, this information is recorded to the blockchain. Its movements, both shipping and receiving, are logged and timestamped as it moves through the distribution process. Finally, information on when a pharmacy receives the drugs as well as when they are given to patients is logged in the blockchain. Patients can see when their drugs were produced, where they were distributed to, and when they were sold. The immutable nature of the blockchain means this information cannot be falsified and no record may be changed after it is logged.

If a problem was identified with a batch of drugs, every pill in the lot can easily be identified and recalled, and receiving patients can be warned about potential dangers. The MediLedger Project is just one instance of blockchain being used in this way. Novartis is also experimenting with using blockchain to ensure fake drugs do not enter the supply chain.

Clinical Trials

Because blockchains provide a secure, efficient mode of sharing and swapping data, they can provide numerous benefits to clinical trials and drug research. As an example, drug companies could be allowed to see, through the use of smart contracts, anonymized patient outcomes from drugs in circulation. This can lead to identifying new applications for a drug.

Similarly, clinical test results can be put on a blockchain and used to identify new opportunities. This would speed up the process of bringing new treatments to market or abandoning ones which have failed to live up to expectations. Quickly identifying the potential successes and failures will save significant money for research institutions, allowing them to focus and invest more on better trials.

Linking Blockchain to Healthcare

Healthcare is perhaps the most important industry in today’s world. It saves lives. It makes lives better. The international healthcare market is of staggering size: over $7.5 trillion. By 2022, it will surpass $10 trillion, over half the gross domestic product of the United States.

By reducing inefficiencies through blockchain healthcare solutions, the amount of money flowing toward needed medical services, as opposed to administrative services, will increase. Patient outcomes will improve, medical liability will be reduced, and the system will ultimately work better for everyone.

The supply of counterfeit drugs, which take money away from research and potentially harm patients, can be greatly reduced. Use of blockchain would reward good actors and punish bad ones. When extended into research, blockchain can help find new treatments faster and do away with those that are ineffective.

The healthcare industry runs on a seemingly endless amount of data. Blockchain is a solution that makes that data easy to store and share securely. By making that data work for the patient, the doctor, and the scientist, healthcare as we know it may soon be revolutionized.