A Look at Blockchain Applications within Healthcare

January 19, 2016

With over a billion dollars in venture capital funding, blockchain technology has been regarded as the most disruptive technology since the Internet, as it has the potential to impact any industry that relies on trusted intermediaries. This includes the healthcare industry, and although the application of blockchain within healthcare has generated a huge amount of interest, there are many obstacles to success.

The application of blockchain to the healthcare industry could have significant outcomes:

  1. Health records will no longer need to be stored by health organizations, but can be controlled by individuals and distributed in real time to trusted parties
  2. Information silos will be removed as there will be a free flow of information between the multiple trusted healthcare stakeholders. All healthcare providers will have one reconciled version of the data – globally
  3. Information will no longer need to be manually transferred, but rather, will be automatically distributed to the predetermined trusted parties after specific conditions have been met

Ultimately, this results in improved quality of care provided to patients, reduced costs to store and reconcile patient information, improved visibility and trust between physicians and patients, and reduction in fraudulent transactions.

Vision for the Future of Healthcare

Here’s what it looks like: A patient visits her family doctor who recommends that she should see a specialist. A digital transaction of the referral is sent to the patient’s digital identity and the assigned specialist. After visiting the specialist, the patient confirms the transaction, and smart contract programming automatically updates the family doctor of the patient’s resulting medical condition, and confirms that the patient visited. It turns out that the patient needs prescription medication. A digital transaction of the prescription and number of renewals is sent to the patient and the pharmacist. After receiving the medication, smart contracts automatically tallies the number of remaining renewals, updates the relevant physicians, and sends the invoice to the relevant parties, including the patient’s insurance company or the government. All of these transactions occur in real time, in a secure and trusted environment.

Dissecting Blockchain

This use case demonstrates the potential of blockchain within healthcare, as patients take control of their own medical records, and conveniently transfer the records with trusted parties.

Benefits for the Healthcare Stakeholders

Patient
  • Patients will serve to see the greatest benefit as increased flow of health information will lead to improved quality of care
  • Increased convenience as appointments, referrals, and prescriptions will all be electronically stored
  • Patients can begin to aggregate their health, financial, and drug purchase data
  • Patients will also be able to control who their information is shared with
Physician
  • Increased trust in patient with improved visibility into patient history
  • Reduced burden and risk of storing data
  • Provide improved quality of healthcare, meeting key performance metrics
  • Ability to track referrals given and received
Pharmacy
  • Reduced cost to store and track patient information
  • Improved patient tracking
  • Efficient communication with physicians
  • Less fraudulent prescriptions filled
Insurance
  • Efficiencies realized through easy global transfer of payments
  • Secure tracking of transactions allows for improved visibility into delinquent payments
  • Less work required to check if claim is fraudulent

Barriers to implementation

In order for the vision of healthcare tomorrow to become a reality, multiple barriers need to be overcome.

Regulation

When innovations such as Uber occurred, the technology was implemented first, and then regulations were dealt with later. The healthcare industry does not operate in a similar fashion. Technology to be implemented within healthcare must first be approved by regulators to ensure issues around privacy, security, and mediating conflict can be handled. Since blockchain is fundamentally different to other forms of data distribution, it is important to make sure our laws reflect the principles of a protocol that allows free exchange of information.

Cost

Research suggests that other attempts made for the adoption of electronic health records by hospitals have failed primarily due to cost. In order for blockchain to be a part of the push towards electronic health records, the return on investment needs to be better quantified. This will be easier to do with an increase in adoption rates and the development of proof of concepts. While there is an increase in use of blockchain, it is within other industries, and so the healthcare industry may need to look outside traditional examples to see the value of blockchain.

Awareness

One challenge is that organizations within the healthcare industry are not aware of blockchain, or its potential benefits to their operations. Since the value of blockchain grows as more users and organizations participate, it is important for each stakeholder within the healthcare network to become aware of the blockchain advantages.

Culture of Resistance

The Canadian healthcare industry has traditionally been slow to adopt new technologies. Given the radical transformation blockchain technology offers by removing the central authority, it is expected that the technology will face resistance. It is important to address these concerns by showing how blockchain can be integrated into the healthcare process, without significantly impacting day to day operations.

These barriers are common to many industries looking to adopt blockchain technology, and yet, they have been overcome in the past. Indeed, the financial sector has gone through this cycle and many of the world’s largest financial institutions have adopted blockchain, including the second largest stock-exchange platform, Nasdaq.

Next Steps for the Healthcare Industry

In order to address the major barriers mentioned, key stakeholders need to be engaged.

Proof of Concept

Proof of concepts are integral to raising awareness and promoting the adoption of blockchain. These organization specific projects help to reveal the value an organization stands to gain, and helps other organizations see the potential use of the technology.

Get Patients Involved

Patients also need to get involved in the discussion, as they can help to align the multiple stakeholders. If patients actively voice their demand for a more electronic healthcare system, healthcare providers will be further incentivized to take action. Indeed, in a Canadian survey, 88% of participants agree with the implementation of EHR, and of those opposed, the primary concern was security, with increased patient control over data being the factor that makes patients more comfortable. Blockchain can help push forward the movement towards electronic health records by addressing some of these patient concerns, so it is important for patients to become aware of these new solutions in order to develop their opinions.

Effectively Engage Regulators

It is important for regulators to become aware of the technology, and its security benefits. This starts with open discussion regarding potential security concerns, and how they may be resolved. Regulators can look to other industries where blockchain is currently being used as guidance for how issues are resolved. By working with the regulators, it is possible to promote the added security benefits that blockchain has to offer.

Authors
Lisa Purdy, Deloitte
Daipayan Mukherjee, Deloitte
Farzad Tabaee, Deloitte
Iliana Oris Valiente, Rubix by Deloitte