Blockchain in healthcare – benefits and examples

Idego Idego • Jun 30
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You hear “blockchain” and you think “cryptocurrencies”? Make no mistake – blockchain is a type of technology which can be used in many businesses to improve their efficiency. Learn about blockchain innovation in healthcare and life sciences. If you would like to know what the potential uses of blockchain in healthcare organizations are, read our article.

Why should you consider using blockchain technology in a healthcare company? The main advantage is that it puts the users in control of their own information and transactions. Dealing with confidential, sensitive data of patients is a big challenge. Blockchain can be leveraged to streamline their medical records and enable sharing data securely. If you have got ten minutes, we would be happy to tell you how blockchain technology can help you improve the functioning of your healthcare business.

What is Blockchain?

The origins of blockchain date back to 1991, but  the technology started to become popular after 2008, when an anonymous person (or a group) under the pseudonym Satoshi Nakamoto used it as a core of the digital currency known as a “bitcoin”. For many, cryptocurrencies and the blockchain remain a mystery. If you are looking for information, how it may be used in healthcare, you probably know something about blockchain already – the technology allows organizations to store and transmit information about a wide variety of commercial transactions efficiently. It is a sort of distributed record of digital events in chronological order. Blockchain can be applied in business in various ways.

To learn about the potential of blockchain in healthcare, you need to understand how it works. We explain it briefly in the next paragraph and if you already know it, you can skip this part and read about individual cases and benefits of leveraging this technology by healthcare organizations

How does blockchain work?

Blockchain is a peer-to-peer distributed ledger technology (DLT) that consists of three major components: distributed network shared ledger and digital transaction. DLT technology uses decentralized peer-to-peer computing, cryptography and other related technologies to verify and propagate a chain of information and transaction records across a specific community. 

Distributed network 

All network participants are connected by the decentralized peer-to-peer architecture consisting of nodes. Each member has an identical copy of the blockchain and can validate and certify digital transactions within the shared network.

Shared ledger 

In the context of DLT, a “ledger” is similar to the original meaning of the word. Both ledgers (the traditional one and the DLT) are documentations of transactions. DLT ledger is simply an electronic record of data and transactions shared by a specific community.

Digital transaction 

Within blockchain technology, a transaction can be a record (information, event), which has been verified and secured cryptographically, ordered chronologically and bundled into some form of a block, while a block is simply a set of transactions. It is added to a chain of other blocks. That is why the technology is called blockchain. Each block has its own, unique identifier – a hash code.

Blockchain uses in healthcare

Blockchain is well-suited for the health sector. Tools leveraging this technology can improve healthcare organizations operation especially in the times of COVID-19 pandemic, but also later, as the world more or less comes back to normal – or the “new normal”. Let us learn what the most popular and promising applications of blockchain in healthcare are. 

Identity management 

The ability to identify individuals (patients, third party representatives) accurately and verifiably is crucial for many companies, but some organizations need to pay attention to this matter even more – namely hospitals, pharmacies, medical research institutions and medical universities which deal with sensitive data all the time. 

Implementing a blockchain technology can add integrity and transparency to the identification process and thus improve data security. It is very important, especially in the case of leveraging the Internet of Things and wearable medical devices that connect with other applications. With blockchain, collected data can be accurately and safely matched with individuals’ electronic medical records.

Healthcare providers can also benefit from blockchain implementation in their business solutions. They have to be able to provide up-to-date information about the availability of service, their location and other elements that might help other business agencies to identify them. This technology may improve the veracity and accuracy of the most-wanted data.

Another useful application of blockchain is the ability to create an immutable log every time a data record is accessed or modified. This allows your healthcare organisation to protect your data from cyberattacks.

Data access permissions and patient consent management 

Blockchain is a good technology for those who are in need to allow other parties access to their personal data using some unique credentials and encryption keys. This way individuals may be granted access to medical records kept by any health professional (including services providers, researchers, social care workers etc.), so medical workers may be able to deliver healthcare services, perform research or use data in other ways that may be necessary to help patients. Electronic patient data is in use all the time, so it should remain accessible. Medical organizations’ customers may give healthcare service providers access to data also using temporary keys (“tokens”) that only contain authorization commands and enable verification. 

The interesting solution is the “dynamic” (also called “incremental”) consent enabled by blockchain, which is a practical alternative to ‘blanket or one-time-only’ consent models. This method allows users (e.g. patients) to change selected terms of permission or consent. Changes are represented as a new block that overrides the previous instruction on that matter in the chain. Blockchain-powered systems make patients responsible for their own medical records.

Blockchain technology in healthcare can serve not only health services providers, but also pharmacists and researchers during the recruitment process for the medical trials.

IoT security for remote monitoring 

Adoption of remote monitoring solutions can reduce the number of critical patients, offload hospitals and clinics and improve comfort of the patient. Special sensors measure patients’ vital signs even when they are out of the hospital or when nobody from the medical staff is in the room. Devices which such sensors help doctors and other medical workers to provide better care for their patients. 

Security of patients’ sensitive data is one of the main issues in health IoT. The second is to ensure that devices do not create false information about the patient’s condition. Blockchain cryptography enables access to patient data only for permitted parties. Making any changes in the source data will generate a certain hash function that the user has to decode with a particular set of cryptographic keys.

Manipulating patient information stored in a blockchain ledger is nearly impossible, because to do so, the user needs to gain access to all stored copies of data. As blockchain technology is decentralized by nature, the IoT devices that use it can interact directly with each other, unlike most of the IoT devices which have to connect to a centralized server first. This second, more common approach makes it much more difficult to protect resources from a potential cyberattack.

Medical and pharmaceutical supply chains management 

Ensuring the right amount of medical supplies in order to provide the best care for the patient is crucial for both clinics and pharmacies. Blockchain-based software is capable of tracking items from the very moment they are created in a pharmaceutical company, through each step in the supply chain, up to when they are actually bought in the pharmacy. That surely improves pharmaceutical brand authenticity and buyers’ trust, as they can have full visibility of the products they are interested in. This is very important especially that counterfeit prescription medicines can cause not only health problems but may even end up in death. 

In short, a special blockchain protocol can enable companies dealing with prescription medicines to verify the authenticity of drugs, expiry dates and other crucial information.

Blockchain implementation challenges to be considered 

As blockchain technology becomes more and more popular and many companies are starting to take interest in implementing it, there are various challenges that are coming to light. Before we mention the main benefits of blockchain in healthcare, let us learn something about the difficulties that can be encountered when adopting blockchain-based solutions.

Costs of using blockchain 

Investing in blockchain will not be cheap. First, there are software requirements that an organization has to meet in order to implement blockchain. Secondly, the costs of the blockchain implementation process may be significant. As this technology is still quite young, the already existing blockchain platforms struggle with low speed of transaction and big energy consumption problems. This inefficiency translates into higher expenses for the healthcare company that chooses to leverage blockchain.

Nevertheless, the most popular blockchain platforms have made a big effort to improve overall performance, and – as the potential of the blockchain technology for healthcare is enormous – we expect that further efforts in this regard will be taken in the future.

Low scalability 

Blockchain technology in general also struggles with inability to serve many users. Blockchain platforms and blockchain-based applications have some capabilities to scale – they have to, especially that scalability is necessary for enterprises with many clients. Only a few companies decide to experiment with blockchain technology as there is the possibility that it will backfire on them. 

Ensuring data privacy 

Decentralized operations are one of the greatest benefits of implementing blockchain solutions in healthcare; ensuring security and efficiency of data, however, is also one of the greatest challenges. The problem is that in blockchain, all the participants of the network may access any type of data through the distributed ledger, which is certainly a drawback of this technology for those companies which store information that gives them their competitive advantage. Blockchain platforms are still working on finding some solution to the problem.

Lack of regulations 

Given the fact that the technology is quite expensive to implement, not so popular and there are many challenges ahead, it is not surprising that there are only a few government regulations related to blockchain usage in business. Countries all over the world find it difficult to define the legal environment for it. Why so? The blockchain network consists of multiple nodes spread across the world – that makes it hard to define the jurisdiction and the right legal obligation for the companies to follow. Additionally, users of blockchain platforms can operate anonymously, which makes it almost impossible to leverage any law at all to control transactions. For now, we know that implementing blockchain can improve data security, but it is not clear what the law says about this technology.

Advantages of implementing blockchain 

Various challenges always appear when the new technology is being developed and introduced to the different industries. Blockchain is no different from any other new technology that is being slowly implemented in many business solutions. Nevertheless, the potential for the healthcare industry is great.

Better patient care 

Imagine a single system for stored, constantly updated medical records, which ensures high security of data and enables rapid retrieval of information by appropriately authorized users. Such a solution would eliminate the possibility of miscommunication between healthcare providers, doctors and other medical staff that cooperates in order to help the same patient. Thanks to implementing blockchain in the healthcare organization, you could improve patient care, diagnose your clients faster and offer more personalized services.

Enhanced data security 

Cybercrime can cost you not only your money, but also the trust of your patients. Blockchain technology helps you protect your patients’ health records much better than other technologies. Each user has their own public identifier and key, and is capable of unlocking access to that data for as long as it is necessary. What is interesting, a hacker would have to attack each user individually to gain their private information. 

Real-time patient monitoring

Real-time, remote monitoring of the patient’s condition is probably one of the most exciting applications of modern technologies. Blockchain may be leveraged to secure patient data and send it to medical personnel in no time.

Implementing an advanced IT solution may be a complex process that requires a lot of experience, that is why you should always consider it carefully.

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