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Breaking Down Blockchain’s Healthcare Potential

June 9, 2016 News 2 Comments

HIStalk looks at the evolution of blockchain, barriers to adoption in healthcare, and its potential to truly put patients at the center of care.

The blockchain concept, while not new, certainly suffers from a lack of healthcare-related glitz and glam, a dearth of bells and whistles that seems to have kept the wallets of Silicon Valley insiders tucked tightly in their pockets (or pocketbooks). Like its VC funding, healthcare headlines relating to blockchain are few and far between – a good indication that the concept has some ways to go before reaching critical mass.

Many automatically associate the word with bitcoin – that much ballyhooed digital currency that has tried time and again to take the world by storm. Those more in the know equate it to financial markets, where authentication and security are key. A small but growing number of IT insiders see it as an initially humble solution to healthcare’s many problems (cybersecurity, claims delivery, interoperability, etc.) – one that may mature into a more dazzling and potentially game-changing business process down the road.

Its true potential in healthcare and in any number of other industries will only be realized once stakeholders truly understand its nature, barriers to adoption, and potential, including moonshots and more down-to-earth applications.

Understanding What Blockchain is (and isn’t)

Definitions of blockchain abound, and, depending on the resource, can be either fairly easy to understand or almost too abstract to contemplate. Techopedia defines it as “a critical part of the bitcoin peer-to-peer payment system.” Investopedia goes a bit further, defining it as a “public ledger of all bitcoin transactions that have ever been executed. It is constantly growing as ‘completed’ blocks are added to it with a new set of recordings. The blocks are added to the blockchain in a linear, chronological order.” These summaries are, in fact, too narrow, given that a blockchain does not in fact have to be tied to bitcoin.


“To begin with, blockchain is not equal to bitcoin,” explains PokitDok Chief Scientist Bryan Smith, who is ushering the healthcare transactions technology company into early blockchain adoption. “A blockchain, at its essence, is a distributed database containing records whose contents, authenticity, and security are guaranteed. It drives efficiency, protects rights through immutable records, and establishes a system of accountability – an imperative in the often murky world of healthcare claims and reimbursement.

“With blockchain,” he adds, “engaged participants could opt in to share information that they want to share. That data could be accessible to authorized parties through a variety of front ends – from a mobile device to a sensitive compartmented information facility. There’s no other database that exists with that kind of functionality.”


Smith’s evangelism seems well founded. What provider, patient, or payer wouldn’t want access to a single database that could act as one source of truth for health data? Jerry Cuomo, vice president of blockchain technologies within IBM’s new cloud group, believes blockchain has the potential to consolidate disparate versions of the truth – a concept that would seem to play well with industry efforts around interoperability and a national patient identifier. “In the current world,” Cuomo says, “everyone is keeping their own version of the truth, their own system of record. When something comes in, everyone is working in silos. Each organization has to look at that transaction and determine if it matches their view of the truth. If not, they have to make it match by converting it to their preferred format. Those are all opportunities for things to go wrong. With a blockchain, you’re working across a replicated, encrypted, shared ledger that has an audit trail. It reduces the attack surface because now it’s just one ledger that everyone is sharing.”

Gauging its Potential


Brian Behlendorf, executive director of The Linux Foundation’s Hyperledger blockchain project, says. “Blockchain addresses concerns of security, scalability, and privacy of EHRs.”

Cuomo, whose team is working to develop blockchain pilots across a range of industries, envisions several “moonshot” applications for healthcare, including a patient-centered blockchain that would give providers limited access to a patient’s health record during time of service. “Just imagine a patient who is about to go into the hospital for an overnight stay,” he says. “The patient could set up a contract with the hospital, giving it 24-access to their healthcare records via blockchain. After the 24 hours are up, the hospital can’t add or make changes to that record, which reverts back to patient ownership. The patient sets the terms of who sees the record, for how long, and under what conditions. It becomes a truly patient-centered healthcare record that follows that patient from doctor to doctor.”

Cuomo also believes that new business models around healthcare blockchains are bound to spring up. “Imagine having the ability to advertise your healthcare information via your blockchain – to let organizations know that you’re interested in participating in clinical trials. You could proactively shop out your healthcare information to improve healthcare and better mankind. If those trials offer payment, you could theoretically offset the cost of your healthcare premium for the year. There’s no systematic way to do that today because your healthcare information is all over the place. In a blockchain and a corresponding ecosystem built up around that, patients might be able to more easily – and securely – contribute to medical research.”

From Big Ideas to Practical Applications

Moonshots often trump more practical use cases when a technology is just getting off the ground. While big ideas are essential to generating buzz around an up-and-coming innovation (Tricorder, anyone?), it is the less sexy application that ends up being a springboard for future headline-generating products and services. Where healthcare is concerned, blockchain may be poised to have the most immediate impact on the claims process.

“If you look at the healthcare ecosystem,” Smith explains, “there’s the patient, the insurance companies, and the providers. Sitting between each of them is some kind of intermediary. On average, processing a claim accounts for anywhere between 20 and 40 percent of the total bill. Overhead is significant, and it may be three months after a medical visit that you get an annoying bill that is often impossible to understand. Five years from now, we’ll see blockchain foster dramatic gains in economic productivity and authenticity much like the Internet introduced.”

Cuomo sees immediate potential in the area of dispute resolution. “A lot of these healthcare insurance environments are always dealing with disputes, often in the tens of thousands range,” he says. “It could be innocent things stemming from improper documentation. These things get held up in the system. They take time to resolve, and money isn’t flowing. When money isn’t flowing, it’s bad for everyone. You can’t pay your bill, people aren’t getting paid, etc. A blockchain could be used to enrich claims processing by tracking events. Those events could be used and consented on to be a source of truth – maybe not eliminating disputes, but reducing the time it takes to settle them. A great win-win for everyone.”

Behlendorf, who spent several years helping the White House and HHS use open-source software to drive adoption of shared medical records, also sees potential in blockchain’s ability to drive the sharing of patient records. “While we moved the needle substantially in our work on CONNECT and Direct,” he says, “there are still many who view patient data as their proprietary edge, not something that belongs to the patient. This is not just unfortunate and archaic; it is life-threatening when relevant health data isn’t shared.

“But, there are stakeholders who have a much greater interest in seeing a comprehensive record of patient care, and are in a connective position in the ecosystem. Insurers, for instance, will play a large role here, as well as the new wave of ACOs, and, by proxy, Medicare and the VA. Here, patient care and outcomes are comprehensively consulted, and the blockchain can provide not only a history of care (with permissions managed via keys), but it can also provide proof of authenticity for records shared between such organizations.”

Lessons Learned from Interoperability

Obtaining industry consensus on a common set of standards that levels the competitive playing field has historically been hard to achieve in healthcare. While Behlendorf, Cuomo, and Smith are certainly idealists in their take on the technology’s potential, they are also realists when it comes to calling out barriers to adoption.

“The barriers to adoption of information-sharing standards in the healthcare industry are many and difficult,” Behlendorf explains, “and few have to do with inadequate technology, but instead with alignment of incentives. What blockchain technology might do is introduce new players and new incentives to the market, thus potentially changing that landscape. It also introduces new risks, since we’re talking about widely shared data (even if encrypted), so we can’t be in a rush to implement. We’re very eager to work with the healthcare industry to investigate where we might see some early wins. The challenge, as always, is to find a set of stakeholders with enough of a common interest that they are willing to invest and collaborate. I’ve seen that first-hand in the healthcare industry, so I know it’s possible.”

Cuomo emphasizes the “network effect” necessary to get blockchain off the ground in healthcare. “It starts with a group of companies working together,” he says. “I think the network would be sparked by a set of influencers, like a set of major hospitals coming together, with sponsorships from one or more payers, which would motivate patients to come in and manage their health records via blockchain.

“But,” he adds, “therein lies the rub. That social pact has to be made. There has to be benefit for groups to come together. There’s a social side to it that’s probably more important. The technology facilitates businesses working together with less friction, with a heightened sense of trust and accountability, but you’ve got to agree on those things.”

Moving Ahead with Early Adoption

Smith is confident that every healthcare stakeholder – from providers to banks – will soon be evaluating how blockchain will impact their business processes. PokitDok, which itself is in the process of developing a blockchain system that Smith believes will significantly improve the security of sensitive health data while simultaneously making that data more readily accessible to authorized parties in real time. The company has also founded a Healthcare Blockchain Consortium to further evangelize the technology. While not quite ready to share specifics, Smith says that the consortium will “develop collective efforts to truly effect meaningful change in how healthcare is administered, delivered, and consumed worldwide.”

Cuomo and his team at IBM launched cloud-based blockchain services in April for healthcare, government, and financial services, and are working on internal and external proof-of-concept projects (including collaboration with the Linux Foundation’s Hyperledger Project) that he hopes will further escalate healthcare’s interest.

Behlendorf also takes an early-days approach to moving forward with blockchain in healthcare, stressing that the Hyperledger Project is not a standards effort. “We are here to build software,” he says, “and in doing so, lift the blockchain ecosystem as a whole, across all industries. We would be very excited to see new members from the healthcare industry participate so that we can understand their needs, collaborate, and build the core platform. As open-source software communities have shown, those companies that participate end up with an operational advantage in understanding how this technology can transform their business. They also see their staff develop expertise in a domain that is difficult to simply buy or outsource. This is about building an ecosystem and everyone has new roles to play if they recognize that and invest in transformation.”

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Currently there are "2 comments" on this Article:

  1. There was a lot of hype in that article and I don’t feel any wiser about what blockchain is and how it will solve problems that couldn’t be solved by other means. Yes, having a single source of truth would be great to address data integrity across stakeholders, but how is the blockchain approach different from and better than other proposals for a single source of truth, and how is it any easier to realize given the political and practical realities? How does blockchain make a dramatic contribution to data security? It looks to me like it is a move from having smaller eggs in many baskets to having bigger eggs in a single (distributed) basket….that’s a risk tradeoff, not necessarily a solution. I’d like to believe there is more than hype here, and there probably is, but that article did not describe it.

  2. I like the idea of being able to shop for bids on your medical history (DNA too?). But the idea of time limited access to your records for a hospital admission is, to be polite, problematic. Anything could happen to you, and the right doc who needs one piece of information to save you may not come on the case until day 3. You may be comatose by then.

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