Healthcare is complicated, costly and open to error and abuse. Blockchain may provide solutions for these ills that have not been possible with traditional approaches.

Healthcare suffers from certain ills that might find a cure through blockchain technology.

While there is still some theorizing about what blockchain could do for healthcare, there are also some solid proof-of-concept projects underway and some significant investments from mainstream pharmaceutical and technical companies.

The focus has to be on bringing down costs while improving the value of the care provided. There seem to be three areas that would most significantly achieve this goal:

1. Medical/health records and data security

2. Supply chain integrity, including revenue reconciliation and fraud prevention

3. Sharing of data for medical research and clinical trials

This article will look at problems in these areas and describe some blockchain-driven solutions.

What are the ills affecting healthcare?

The healthcare sector is complicated. It consists of public and private sector entities, government and non-government organizations, hospitals and physicians, insurance providers, healthcare information and management professionals, medical equipment manufacturers, pharmaceutical manufacturers and suppliers, academic institutions and researchers. All of them guide and track patients over time through a wide range of health and medical services. All of them have their own siloed sets of information and management systems. All of them are faced with reconciliations of finances and services across long supply chains.

The healthcare sector is also very costly. According to the World Bank, health spending globally represents nearly 10% of GDP. The USA has significantly higher spending per capita than any other country, and in 2016 this represented nearly 18% of GDP. This number rose to above 18% in 2018. Other wealthy nations spend an average of 13% of GDP on healthcare.

Exorbitant administrative, operational and management costs are making healthcare increasingly unsustainable. The huge amounts of money involved make it an area for powerful and conflicting interests and there is a high potential for wastage, fraud and corruption.

What is the blockchain prescription?


The problem

If patients’ health records went with them and could be accessed across the range of services and service providers that they interacted with, this would save administrative costs and time, avoid unnecessary duplication and, most importantly, provide a full and coherent patient health profile. This should significantly improve the level of diagnosis and care in times of illness.

The problem has been that data is siloed, traditional back-end systems are incompatible with each other and data becomes fragmented and difficult to access.

In addition, by its nature, patient data is sensitive. The challenge is to access patient information without compromising patient privacy or data integrity. In most countries, HIPAA-type legislation sets out the requirements for such privacy and the safeguarding of medical information.

The recent breach of the UK’s National Health System with the WannaCry cyber-attack shows just how vulnerable these systems are. Many hospitals had no access to patient records, operations were cancelled, emergency departments were closed. It seems that an outdated version of Windows XP software was being used, so there were no updated security patches.

This is particularly problematic when data is being fed into the system from multiple sources.

For example, a survey has found that more than 90% of healthcare IT networks have IoT devices connected to them (for example, infusion pumps or glucometers). Disturbingly, 70% of healthcare IT decision makers believed that security measures being used for servers and computers would be adequate for these devices.

Blockchain solutions for health records and data security

One of the outcomes of the WannaCry attack is that the City University, London, is now working with the Indian Institute of Technology Kharagpur as part of a consortium to focus specifically on a blockchain solution to secure data from IoT components.

China may be banning everything cryptocurrency, but they are strongly supportive of blockchain. An indicator of this is that Alibaba has launched Ali Health, and is working with local authorities in the city of Changzhou to link together and secure medical data through a blockchain system. The blockchain will be compatible with existing medical systems which will probably result in much faster uptake of this technology. One of the main expected benefits is that doctors will immediately be aware of a patient’s medical history and will therefore not duplicate tests unnecessarily — resulting in major time and cost savings.

Estonia is known to be the most advanced digital society in the world. In 2016 the Estonian government partnered with Estonia-based tech company Guardtime to secure a million health records in the country. Citizens of Estonia already have a PKI smart card with access to hundreds of government services. Health records will be added but secured in such a way that there will be a forensic audit trail of the record for its entire lifecycle. This will ensure that there are no errors in the data and that it is not manipulated in any way. According to Mike Gault, CEO of Guardtime:

“This level of transparency and auditability is a global first and with healthcare fraud costing hundreds of billions of dollars every year, the Estonian model should provide a valuable template to dramatically reduce this fraud for the rest of the world.”

Guardtime is fairly unique as its blockchain has evolved from its own cryptographic KSI technology rather than the proof of work/proof of stake protocols of other blockchains.

In another project, Guardtime has partnered with SUMMUS Global to establish a network of over 4000 leading medical specialists from around the world. Patients in Asia will have remote access to these specialists, and the specialists will have access to their medical records, all secured on blockchain.

Two tech startups have recently acquired significant investment funding to pursue blockchain solutions for medical records and data security:

· PokitDok: This start-up received nearly $50m in funding. They develop APIs for different sectors in healthcare, such as claims, electronic medical records, identity management or pharmaceutical. Instead of the APIs from these sources plugging into the central hospital or pharmacy IT networks, they are connected to a distributed blockchain network, called DokChain. In one demo, it was shown how DokChain could run an eligibility check for an insurance claim in seconds, rather than the usual hours or days via traditional systems.

· Patientory: Patientory has been working on a blockchain-powered health information exchange (HIE) since 2015 and plans to launch a patient app later this year. It is HIPAA-compliant, will have enhanced cybersecurity protocols and will allow for interoperability across different sources of medical records.

What is notable about this project is that it is patient-centered. Patients will have ownership of their data and can grant access to it. A person or institution with access will be able to add new records of doctor visits, medication, medical images, etc — and these will all be visible to all other institutions who have access.


The problem

According to Statista, global pharmaceutical sales topped a trillion dollars for the first time in 2014. This number has increased every year since then. Keeping track of the supply chain for this size market is extremely complicated.

It is necessary to establish the provenance of medication, to prevent fraud and fake products. According to the World Health Organisation, more than 100,000 deaths per annum can be attributed to counterfeit and dangerous medicines. Interpol puts the number at closer to a million.

It is also often necessary to maintain certain temperatures, humidity levels or air quality for shipments. Payments must be reconciled all along the way. Regulations abound: for example, in the USA the Drug Supply Chain Security Act (DSCSA) and in Europe the Falsified Medicine Directive (FMD) require all drugs to be serialized and barcoded within the next few months.

Verifying the authenticity of returned drugs is difficult and has led to huge losses for pharmaceutical companies. Returns may be comparatively small at 2–3% of sales, but when sales top a trillion dollars, returns represent billions of dollars. Companies can’t re-sell these drugs if they can’t prove authenticity.

Traditional systems and IoT devices can be used to track goods — but because all the parties have separate tracking and ledger systems it is difficult to pinpoint specific problem areas.

Blockchain solutions for supply chain integrity

The characteristics of blockchain are that it is transparent, immutable (can’t be altered) and distributed across a number of computers or nodes, which means there is no single point of failure. Nor is there a central control point. Any participant in the supply chain can check on adherence to logistics, transportation guidelines or time frames. When smart contracts are added certain actions, including payments, can be executed automatically.

Given the large amounts of money involved, it’s not surprising that multiple large corporations are scrambling to set up consortiums and blockchain think tanks to better manage their supply chains. Pharmaceutical companies like Roche, Pfizer, Sanofi, Johnson and Johnson and Amgen are actively investigating blockchain solutions.

There are also a number of specific projects:

· Merck and SAP have partnered to develop the SAP Pharma Blockchain POC app. The first proof of concept was launched in Q3 of 2017 and a second one at the beginning of 2018. SAP already has a traditional solution called ATTP (Advanced Track and Trace for Pharmaceuticals) which generates unique identifiers for drug packages. These identifiers are now registered on the SAP Pharma blockchain. A new mobile app has a simple scanner that can scan the barcodes of the packages at any point in the supply chain — and register the results as a transaction on the blockchain. The mobile app also has a map view and can verify the exact geographic location of each package

· Novartis is combining blockchain and IoT devices to track temperature along the supply chain and to identify counterfeit medicines. The key is that there is real-time visibility for all participants.

· Novartis is also setting up a consortium between the EU and the European pharmaceutical industry — the Innovative Medicine Initiative (IMI) Blockchain Enabled Healthcare program. This program has a broad scope, covering supply chain, counterfeit drugs, patient data and clinical trials. It will include small blockchain companies, clinical labs, universities, hospitals, patient representatives and others.

Chronicled is a startup that has just received several million dollars in investment funding. They build blockchain-based applications for supply chain and IoT clients, including for medical devices, pharmaceuticals, and tracking of packages, blood and human organs. Importantly, their server synchronizes with Quorum, Hyperledger and Ethereum blockchains. They also have a mobile smart sensor and tamper-proof adhesive stickers that can be attached to items and scanned anywhere in the system to be verified against the blockchain registry.

GEM is another blockchain startup. It is working with Philips Blockchain Lab on the Gem Health Network. Part of their project is to ensure the correctness and integrity of claims and reimbursements and to reduce fraud.


The problem

There are several problems associated with healthcare research and medical trials. One is that it is sometimes difficult to get sufficient numbers of people to participate in the trials. It is also difficult to ensure that all the necessary consents and protocols are followed exactly and that everything is correctly recorded.

In addition, the integrity of research results is coming under increasing scrutiny. There is a tremendous conflict of interest when a pharmaceutical company is running medical trials on its own products. Many suspend the trials as soon as they achieve their hoped-for result — this often means that the long-term impacts of the drugs are not identified. Data may be manipulated to reach the wished-for result.

Vioxx , manufactured by Merck, is a good example. It was on the market as a painkiller for 5 years between 1999 and 2004, but it was responsible for nearly 28,000 heart attacks or sudden cardiac deaths in that period.

Even when these problems have not occurred, it is difficult for researchers to share data and collaborate as there is concern about the ownership of data.

Blockchain solutions for research and medical trials

One of the most important aspects of having health records on a blockchain is that individuals can own their own records. They can choose to share them for research purposes — and can often be monetized for that. In addition, researchers can look for and find potential candidates for clinical trials, based on their health profiles. Transparency and traceability of consent will improve the reliability of results.

Long-term follow-up will be possible. People using newly released drugs can be properly monitored. Data stored on a blockchain cannot be altered or manipulated — and will be available in its original form for later researchers to re-evaluate.

The Hyperledger Healthcare Working Group has been set up to use blockchain technology to assist anyone in the healthcare field to improve processes, reduce costs and improve patient experience and outcomes. It is hoped that it will also help to set some standards especially in the use of blockchain for clinical trials.

The future for blockchain and healthcare

There are many obstacles still to be overcome before there is widespread adoption of blockchain solutions for healthcare. These include standardization, interoperability across blockchains, persuading intermediaries who profit from controlling the data to interface with blockchain. Costs and ROI are still not known. Neither is it clear who will take the lead and how collaboration will happen.

Despite the challenges, the current healthcare system is sickly enough for the main players to be seriously looking to blockchain and to startups with clever solutions to be the cure.

If you’re a developer, a blockchain specialist or a potential investor, it might be worth your while to have a closer look for opportunities in the healthcare sector.