Fact or Fallacy: Is Blockchain a Panacea for Healthcare’s IT Issues?

Over the past year, bitcoin and other cryptocurrencies have come into public view as the value of a single bitcoin neared $20,000. Lesser known is that underlying these cryptocurrencies is a data protocol called distributed ledger technology, or blockchain, that offers wide-ranging potential applications in digital technology. Marked by its high security, speed, encryption and immutability, blockchain technology is already making headway in finance, supply-chain management, distributed computer storage, digital contracts and several other areas. Healthcare, too, is an emerging area of interest for blockchain solutions.

Despite being the largest sector of the U.S. economy, healthcare has been plagued by slow systems, wasteful financing and resource utilization, and operational inefficiencies across the industry. Already, blockchain-focused tech companies have proposed solutions to reshape patient health records, supply-chain management, licensing and credentialing, and payments.

While particular areas of healthcare seem ripe for blockchain disruption in the near future, the actualization of such solutions remains to be seen.

Fact: Blockchain could speed up licensing and credentialing of healthcare providers

Blockchain is likely to disrupt traditional licensing and credentialing mechanisms throughout healthcare. Medical licensing is a slow and burdensome process, requiring the compilation of a range of documents from various sources, such as diplomas, exam scores and certifications, and submission to licensing bodies. It is expensive and time consuming for providers, and poorly standardized for licensing bodies. Credentialing, the process by which care organizations review employee records and authorize practice within their organizations, is equally burdensome.

Blockchain solutions, however, are already being adopted in education and show promise in healthcare. The Massachusetts Institute of Technology, for example, started a pilot last year where the institution issued some diplomas on a blockchain, providing encrypted, trusted, immutable proof of graduation for diploma holders. Several other organizations in both the public and private space have launched similar initiatives, including Learning Machine, as well as a recent partnership between Hashed Health and the Illinois Blockchain Initiative that aims to reduce licensing friction across state lines. Undoubtedly, a blockchain solution seems fitting to share a health worker’s multiple academic and licensing milestones easily and verifiably across credentialing organizations.

Fact: Blockchain-enabled supply chains could reduce losses and fraud

Supply-chain management is one of the most promising areas of emerging blockchain systems. Companies like IBM are working to transform accountability in shipping, tracking, and transfer of goods. Certainly, healthcare is ripe for disruption in durable goods and medication supply chains.

Both at home and abroad, blockchain supply chain systems could reduce counterfeiting and theft and also help better manage inventory and prevent stock-outs. Among promising efforts, the MediLedger project aims to work with several large pharmaceutical companies to track medications across their manufacturing supply chains to ensure that trust exists across multiple participants and that quality ingredients are used throughout manufacturing. A similar model could be applied across health equipment to ensure that a final product has truly been manufactured by trusted parties.

In the global health realm, where organizations like USAID, the Red Cross or the Global Fund aim to track the distribution of donated supplies and medications across regions or developing health systems, a blockchain-enabled supply chain might better enable these organizations to manage inventory and supplies. Such systems could help ensure that needed supplies get to their intended destinations and prevent inventory stock-outs, expirations and misuse.

Fallacy: All patient records will be stored on blockchains

Electronic health records are a pain point across the healthcare industry. High-security protections and lack of interoperability make it difficult to transfer records between unaffiliated providers, and as a result, providers often are left with incomplete records. Several organizations have proposed blockchain-based electronic health records, but regulatory concerns likely will slow implementation. More significantly, patient record management requires large amounts of digital storage and frequent data transactions, which are each rate-limiting steps of blockchain systems.

Although advances have shown improvements in speed compared to early iterations, any blockchain that handles large amounts of patient data in real time — for example, across a hospital system — likely would need to be faster than has been demonstrated to date.

Several ideas have been proposed to navigate the data-storage problem. These include using a blockchain system to store directions to off-chain storage, or data lakes. Still, these remain just possible models, and blockchain-based electronic health records that integrate expansive information, such as large radiology images, are, at best, still in development.

Fallacy: Blockchains will help individual health organizations better manage their inventories

While blockchains hold the potential to ensure trusted supply chains across several parties, they are not always the supply-chain solution. The revolutionary potential of blockchain technology is in its promise to ensure trust across parties that would previously require a trusted intermediary or middleman.

While this could transform inter-organizational supply chains and credentialing, there are few advantages for a single organization to move an internal management system to a blockchain. Operating a blockchain system requires a distributed network with multiple nodes, and in these cases, organizations may be best suited using traditional databases.

Inventory management within an institution where information does not have to be shared with external parties is likely more efficient when run on a centralized database or cloud server.