Blockchain in healthcare: applications and benefits

10 min read



The history of the healthcare industry is a series of technological breakthroughs designed to improve patient outcomes and broaden access to services. One of the more recent healthcare innovations — blockchain — has already begun to make an impact by reinventing the information infrastructure that serves as the foundation for all healthcare services. Blockchain in healthcare shows great promise in making health information systems more secure, more efficient, more accessible, and more reliable.

Blockchain is a distributed ledger system that records transactions in a database made up of “blocks” of data that are “chained” together. Once a block has been filled with data, a new block is created that is chained to the previous block to create a chronological record. While many types of data can be stored in these chained blocks, the most common form is transactions, such as product inventories and financial records.

  • Blockchains differ from databases in that they store data in blocks rather than tables. This creates an irreversible timeline that documents transactions.
  • Blockchains are decentralized, which allows their data to be shared easily. However, blockchains can also be private and centralized for use by a single entity.
  • Blockchains are self-correcting. When data in one block is compromised, the records in the other blocks in the chain cross-reference each other to root out the error.
  • Blockchains are secure. Once a block has been created, it requires a consensus of blocks to alter it, which in turn requires changing the codes of adjacent blocks.

The healthcare industry benefits from the use of blockchains in a number of ways:

How blockchain improves electronic health record systems

Electronic health records have become the cornerstone of patient care by providing a complete, accurate, and accessible history of each individual’s medical treatments. However, protecting the sensitive personal information contained in EHRs becomes more challenging as health information systems (HIS) become more complex. This is one of the most promising areas of blockchain in healthcare.

  • EHRs record patient health data in a digital format that is created and stored by multiple healthcare facilities. The healthcare provider that created the record typically retains primary access to it.
  • Individual EHRs tend to be incomplete and are managed inconsistently by the organization that created and maintains them. This means healthcare providers have a fractured view of the patient’s medical history.
  • Other challenges in making EHRs complete and accessible healthcare histories are interoperability of HISs and access control (authentication).

Blockchain addresses these shortcomings by linking EHRs and sharing ownership of the records among all stakeholders, along with other security and authentication features.

A blockchain-based EHR for sharing data on cancer treatments

Blockchain’s ability to accurately log and automatically encrypt all healthcare transactions allows anonymized medical record data to be widely available. An example of a blockchain solution for EHR management is Action-EHR, which is a patient-centric system that promotes data sharing and patient-care management related to cancer radiation treatments. 

Action-EHR complies with the Health Insurance Portability and Accountability Act (HIPAA) by making it easy for patients to transfer clinical data between healthcare facilities. The system overcomes many of the limitations of health information exchanges (HIEs) by being more secure and providing more efficient data storage. Patients, medical practitioners, and researchers all have ready access to the information they need safely, efficiently, and at a lower cost.

A consortium approach to an EHR blockchain solution

Overcoming the problem of “ownership” of EHRs by the healthcare provider that created the initial record requires a platform based on collective ownership by all stakeholders: hospitals, insurance providers, government agencies, and other organizations involved in community health. The HealthChain has been proposed as a distributed, blockchain-based EHR management system whose business logic is set by a governance model that the consortium of stakeholders agrees to beforehand.

As a result, all stakeholders can trust that the data is valid, protected, accessible, and complete. Even though HealthChain lacks a centralized node, the governance model regulates all interactions with the system by all participants, who are issued certificate authorities (CA) that provide information about each organization’s identity. All parties accessing HealthChain are verified by all other participants as membership service providers (MSP).

  • CAs ensure that all identities are protected and sensitive data is anonymized.
  • MSPs provide fine-grained access to the EHRs and create a record of each party’s interaction with the system.

The HealthChain prototype has proven to be safe, secure, immutable, transparent, HIPAA-compliant, scalable, fast, and efficient. However, it creates a potential single point of failure should the mechanism issuing CAs and MSPs fail, and its read latency increases as the blockchain ledger grows.

Enhanced medical research processes via blockchain

The devastating impact of the COVID-19 pandemic on the healthcare industry is well-documented, but less well-known is the effect the pandemic had on medical research, especially clinical research trials. Clinical trials are the foundation of finding new medicines, treatments, and therapies for life-threatening diseases.

The pharmaceutical industry is pioneering the use of blockchain-based approaches to medical research, especially as a way to improve the performance of clinical trials of new medicines. Blockchain’s built-in security guarantees that the data cannot be altered or accessed by unauthorized parties; the public registries created by blockchain allow ready access to trial results by authorized stakeholders.

  • Patients retain control over how their data is managed and distributed among healthcare providers, insurance companies, and other stakeholders.
  • By facilitating collaboration between healthcare and research organizations, blockchain enhances the drug discovery and development process.
  • Blockchain security protects participants’ intellectual property rights by preventing their research from being hacked.

How blockchain can improve recruitment for clinical trials

Without enough qualified participants, the results of clinical trials can be impaired, and the time and money spent conducting the research can be wasted. Research cited in the AMIA Annual Symposium Proceedings found that 86% of clinical trials fail to meet their recruitment goals on time, and 19% of trials are either closed or terminated because they can’t enroll enough participants.

To facilitate recruitment of clinical trial participants, researchers created an Ethereum-based blockchain that simulates the recruitment process. The system is composed of two modules:

  • The first identifies potential subjects for trials based on inclusion and exclusion criteria.
  • The second manages patient enrollment, trial management, and persistent monitoring of future trials.

The resulting system allows all researchers to view trial information while protecting the privacy of trial participants. The results of the trial are authenticated automatically, all transactions are documented, and the accuracy of all data exchanges is confirmed. The scalability of the prototype system was limited by the validating mechanism used by Ethereum, but spacing the transactions improved performance when processing large numbers of transactions.

Using “smart contracts” to facilitate management of clinical trials

The massive amounts of data generated by clinical trials can overwhelm research systems, which threatens the integrity of the data and the trial results. The BlockTrial prototype system for managing clinical trial data relies on blockchain’s “smart contracts” to store transaction records rather than storing the clinical trial data itself. 

BlockTrial models the many types of interactions that occur between trial participants and researchers. Each type of interaction is implemented as a smart contract recorded automatically in the Ethereum-based blockchain, including requests to the external database used to store patient data. Because smart contracts cannot interact with external sources directly, “oracles” are used as agents that monitor the blockchain for events and respond by invoking a service or taking some other action.

  • BlockTrial demonstrates the benefits of managing clinical trial data via blockchain in terms of data integrity, patient autonomy, and regulatory reporting.
  • The smart contract records facilitate statistical analyses conducted after research is completed, as well as confirming to research oversight organizations that all ethical requirements have been met.

Use of blockchain to strengthen healthcare cybersecurity

Healthcare facilities remain a primary target of cybercriminals, and the pace of cyberattacks on hospitals increased during the COVID-19 pandemic, according to data collected by the security firm Protenus.

  • More than 40 million patient records were breached in 2020 as a result of 728 separate incidents, compared to 572 such incidents in 2019.
  • This represents an increase of 42% in hacking incidents at healthcare facilities from the previous year.
  • In December 2019, the computer network of Canadian medical testing company LifeLabs was breached, causing the exposure of the personal data of 15 million patients.

The built-in encryption and other security features of blockchain in healthcare promise to harden the computer networks and information systems of healthcare providers.

  • Decentralized storage reduces the damage that a single data breach can inflict.
  • Cryptographic keys provide patients with greater control over access to their private data by giving them possession of the “master” key that unlocks their health records.
  • Smart contracts limit access to the data based on parameters that all parties involved agree to beforehand.

Widespread use of blockchain for securing healthcare systems must address HIPAA requirements when using decentralized storage. Healthcare facilities will still have to implement encryption and other on-site security protocols, among other obstacles. Yet programs are underway that apply blockchain technology to enhance the security of sensitive healthcare data in compliance with HIPAA and other regulations.

A file system designed for decentralized storage of medical records

One of the shortcomings of blockchain for secure distribution of decentralized health records is the hypertext transport protocol (HTTP) that underlies the internet. HTTP relies on location-based addressing to distribute data, which is less efficient than content-based addressing for accessing data whose location is variable, as in blockchain’s decentralized storage.

The interplanetary file system (IPFS) has been proposed as an alternative to HTTP and is designed specifically for storing versioned file data in decentralized storage environments. 

  • IPFS is based on content addressing, which divides each file into chunks when it is added to the blockchain; each chunk holds object data and links.
  • The file system creates a single hash called a base configured IED description (CID) that is used to retrieve the file. (IED stands for ‘Intelligent Electronic Device’.)
  • The hash ensures that all versions of the file are identical because any change received by the IPFS will be mirrored in all other files that use the same hash.

A key component of the IPFS is the interplanetary name server (IPNS), which serves as a distributed alternative to the centralized domain name system (DNS) that makes websites discoverable. The hash returned by the IPFS allows users to access data on websites, but because blockchain files are immutable and websites change regularly, DNS would need to be updated after each change. IPNS solves this problem by securely mapping site addresses to DNS.

Applying blockchain to update medical supply chain management

Shortages of key medical equipment and supplies during the COVID-19 pandemic highlighted the susceptibility of healthcare providers to supply chain disruptions. A promising use of blockchain in healthcare is in managing supply chains in a way that reduces a facility’s operating costs. 

Healthcare supply chains entail the integration of diverse functions:

  • Planning processes
  • Interorganization and intraorganization processes
  • Information flows
  • Market development and approach

Blockchain’s distributed architecture, built-in security, and decentralized storage make it well-suited to managing and monitoring the movement of drugs and medical supplies.

  • It is easy to confirm the origin of drugs because all transactions are recorded in the blockchain ledger, and all nodes maintain a record of the transaction. This helps identify counterfeit drugs and other medical products.
  • Blockchain creates a trusted network of vendors that enhances patient safety.
  • The technology improves demand forecasting, data provenance, and fraud prevention by integrating all production, packaging, distribution, transportation, and warehousing information in a single immutable record that is stored securely and is readily accessible.

A blockchain-based supply chain for advanced therapy medicinal products

The healthcare industry’s use of cell therapy, gene therapy, and other advanced therapy medicinal products (ATMP) is expected to increase at a compound annual growth rate of 13% between 2021 and 2028, according to Grand View Research. 

Sustaining this level of growth requires a specific type of supply chain infrastructure that complies with HIPAA requirements in the U.S. and General Data Protection Regulation (GDPR) in the European Union. Blockchain’s distributed ledger, built-in encryption, and decentralized storage are well-suited to the establishment of an ATMP supply chain. Development of such a system has four components:

  • Stakeholder analysis includes therapy manufacturers, healthcare providers, insurers and other payers, logistics providers, and regulatory authorities. A user requirements specification is derived from these analyses.
  • Customized track-and-trace software monitors the movement of ATMP supplies in compliance with applicable regulations. The software will integrate seamlessly with commercial applications.
  • Migration and integration of the software to blockchain speeds communications, maximizes capacity utilization, enhances resource sharing, and improves delivery accuracy.
  • Case study evaluation determines the feasibility and economic impact of the ATMP supply chain system in real-world settings; it will also establish the scalability of the model to larger systems.

Rethinking healthcare provision in the blockchain era

The devastation wreaked by COVID-19 is measured in lives lost, families torn asunder, communities turned upside down, and economies in decline. From the ashes of this worldwide catastrophe, some good will arise. One such positive outcome is the healthcare industry’s adoption of technology to improve patient outcomes while operating more efficiently. 

The widespread adoption of blockchain in healthcare will give patients more control over their data, improve the accuracy and security of EHRs, make healthcare services more accessible, and reduce healthcare costs. The post-COVID 19 era will usher in innovative approaches to all aspects of healthcare provision, many of which will benefit by having blockchain as their foundation.