d Blockchain in Healthcare : Will it or won’t it survive ? – Napier Healthcare

Blockchain in Healthcare : Will it or won’t it survive ?

What is Blockchain

Blockchain offers a permanent record of online transactions. Transactions are deemed as a “Block” and a ledger binds them in a “chain” thus earning its moniker “Blockchain”. Each transaction is validated and stored by a network participant based on rules but sans a governing central authority. Information can neither be modified nor copied or deleted.

Every transaction has a time and date stamp, offering a trusted transaction history and allowing verification of such records. Since the information is encrypted, the only way to access the blockchain is with a passcode. This shared ledger system makes Blockchain rather secure. Given this, Blockchain is gaining new use cases for applications that require trusted and immutable data.

Blockchain in healthcare

The disruptions wrought by blockchain technology in the fin-tech industry are all over the news – Healthcare is not immune to this disruption. Healthcare Rallies for Blockchain, a study from IBM, found that 16% of surveyed healthcare executives had solid plans to implement a commercial Blockchain solution this year, while 56% expected to by 2020. (1)

It is projected that 55 % of healthcare applications will have adopted Blockchain for commercial deployment by 2025. (2)

The known use cases of Blockchain in Healthcare

Presently, healthcare transactions are slow, cumbersome and expensive. As with any new technology in the hype cycle, Blockchain also generates a lot of excitement but has few real commercial applications. There are even fewer start-ups with a proven business model. This is both an opportunity and a threat. The threat comes from lack of traction which might eventually lead to Blockchain being ignored by the entire Healthcare industry. However, the opportunity to make our own future is exciting. It is really up to our imagination to conjure up innovative solutions. Few key areas of interest seen thus far include,

1.     Health Data Exchange and Interoperability

With a transfer of data through API’s – Blockchain achieves standardization of data format, which is used to transmit data, irrespective of capabilities of EHRs, to communicate different HL7 versions.

Blockchain provides a foundation for secure, permission framework for data exchange thus allowing data to be freed up for enhancing efficiency in care coordination.

2.     Data Security and backups

In 2017, over 50,000 patient records were compromised through a series of breaches resulting in multi-million dollar fines for providers. However, with Blockchain, malicious parties wanting to gain access would need to simultaneously breach every participant in the network, not just one. (3)

3.     Billing Management

An estimated 5–10% of healthcare claims are fraudulent as a result of either excessive billing or billing for non-performed services. (4)

Blockchain could reduce this level of fraud and automated billing would reduce admin costs by eliminating the need for intermediaries, ultimately making the process more efficient.

5. Pharmaceuticals and Drug Tracking

Using this technology supply chain management can track drug sourcing to reduce the impact of a counterfeit drug on Patient’s health. 

Challenges to Healthcare Blockchain Adoption

Fig: Healthcare executives on barriers to healthcare adoption of Blockchain worldwide in 2016 (5)

Immature technology, insufficient skills and regulatory constraints were cited as a Top-3 barrier to adopting Blockchain technology in healthcare. Some others include:

1.     Existing systems and cultural shift

Presently patient EMR data is already being managed in large legacy systems by Health systems globally. In the absence of an adverse event, Blockchain based solutions don’t have a compelling business case for a rip-and-replace strategy. So it will have to evolve over a period of time and large-scale Blockchain based EMR replacement projects are unlikely to be awarded any time soon.

2.     Healthcare stakeholder network is distributed so it’s hard to implement

Insurance payers and healthcare physician providers are all not consistent in terms of how different entities handle records. In the absence of single payer, who could drive data standards, it would be extraordinarily difficult to pull different stakeholders together to adopt Blockchain as a technology.

3.     Many players aren’t willing to share

For example, insurance payers and hospitals actively try to not share data. It is a competitive advantage for hospitals to keep cost data to themselves. If they are forced to share with insurance companies, they might get lowered payouts for patients. It is difficult to share data in an environment in which these entities are for-profit.

Intrinsically Payers and Providers have conflicting priorities. Both try to maximise their returns and hence collaboration that involves data sharing, especially on costs, is not in their interests. Consequently, interoperability becomes a casualty.

Can the Dotcom boom serve as a guide to the future of Blockchain?

Blockchain technology may not be the panacea for healthcare industry challenges, but it does provide efficiency in the overall health ecosystem by dis-intermediating some high-cost transactions. By now, most healthcare organizations around the world have recognized that Blockchain has the potential to reduce the cost, time and risks associated with the delivery of healthcare services. According to an analysis done by BIS Research, the global Blockchain (Healthcare) market is estimated to reach USD 5.61 billion by 2025. (6)

However, as history has shown, not all such exciting technology solutions survive the real-life business. In the late 90s B2B exchanges were supposed to provide similar value by bringing all stakeholders on to a common platform. It did lead to a dotcom boom for a short while but the euphoria died a natural death when there were no takers for such a vision in the real business world. Today some of the big names in the B2B tech industry such as CommerceOne, FreeMarkest, Covisint, Ariba are but a pale shadow of themselves or have been completely wiped out by forces of acquisitions. There is a lesson here for us. All solutions that can technically solve a problem may not be practically monetisable!

As Captains of the Healthcare IT industry, we need to make Blockchain count for the industry and ensure its commercial success. Let’s keep the solutions small and affordable but with a laser-like focus on generating lasting benefits for the providers. Once that is done, the scale will come as also the eventual benefits that will allow us to monetise our investments.


  1. https://www.forbes.com/sites/bernardmarr/2017/11/29/this-is-why-blockchains-will-transform-healthcare/#4aa71a101ebe
  2. https://www.statista.com/statistics/759208/healthcare-blockchain-adoption-rate-in-health-apps-worldwide/
  3. http://health.oliverwyman.com/drive-innovation/2018/04/is_blockchain_thean.html
  4. https://hackernoon.com/how-blockchain-is-set-to-disrupt-the-healthcare-industry-in-2018-5d4fda455911
  5. https://www.statista.com/statistics/759312/barriers-to-healthcare-adoption-of-blockchain-worldwide/
  6. http://makingthehealthcaresystemwork.com/2018/07/06/beyond-the-buzz-real-opportunities-for-blockchain-in-health-care/

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