Healthcare on the blockchain: expectations and challenges

30 May 2018

Use of blockchain technologies in the healthcare area is a natural result of the global process of a large scale blockchain adoption by a wide range of industries, as the technology ensures decentralization, impeccability, immutability and high level of transparency and traceability, suppositionally after all. What may blockchain bring into the medicine in fact and what challenges does it involve?

Things that could be

In theory, blockchain could have helped healthcare providers to ensure better arrangement, management and tracking of patient records with the data being available from anywhere using the login credentials. Patients could have passed medical examinations with the results automatically entered and updated in the medical history. Besides, consumers could have purchased insurance policies linked to the blockchain on the basis of smart contracts, which could have been paid in an automatic mode too.

Blockchain could have changed the fundamentals of the medical service, bringing more clarity and order for the healthcare professionals, and cutting costs for bringing records from one place to another, or compliance and audit procedures. Healthcare provider institutions could have been protected against cyberattacks, which involve ransomware and other malicious practices. Moreover, blockchain could have minimized fraud cases, which have in aggregate totaled to about $30 billion in losses over the past 20 years, as data in the blockchain cannot be arbitrarily changed.

Challenges we face

Data access. The key challenge of the blockchain technology for the healthcare industry is in its advantage itself: while it creates a global ledger, where the data are easily available from anywhere across the globe, making it convenient to transfer patient information from one physician to another, from one hospital to another institution, this is a fundamental problem from the point of view of data security and patient’s privacy.

Blockchain makes all data available to everyone within a hospital, and without some restrictions such public access may lead to data leaks, resulting in patient data theft for further operations involving money transfers and financial information compromise. On the other hand, restriction of access to the patient’s information may result in fatal cases, when the time is a question of life and death, because patient data about existing allergies and administered medicines often should be accessed immediately.

Real-time entries. Another major challenge faced by the healthcare industry, if it decides to move to a blockchain architecture, is a mismatch of expectations and reality. Alyssa Hoverson Schott, a doctor from Sanford Health, made a comment saying that the healthcare system may not operate in real time, because it is connected with the claims. Doctors have an immense workload and as such they have no chance to make patient records in real time, constantly providing entries into the blockchain environment: they need either make entries, or treat patients.

One provider trap. Starting a massive re-orientation in the healthcare system is associated with such problem as being closely tied-up to one blockchain provider, which is not very good for medical institutions. Given the high costs related to the transfer from one blockchain to another, healthcare service providers will have no other choice as to swallow fee increases imposed by blockchain vendors.

Some experts believe that the blockchain technology has not yet reached its maturity to the extent, when it may be safely deployed by large-scale industries like healthcare. Many projects involving blockchain outside its initial sphere, where it was created for Bitcoin and other cryptocurrencies, are still at the stage of proof-of-concept research.


While blockchain is a good path breaker for a healthcare sector with extensive opportunities both for the medical staff and the patients, it has implicates a number of sizable issues and problems, which should be addressed and solved before the full-scale implementation of the technology across patient treatment industry. Blockchain may be a good answer to such issues as records storage and transfer, but developers and healthcare service providers should first decide the question of access: who may and who may not view the patient records, the question of getaways if some institution wants to change a blockchain vendor, and other issues associated with the security for the patients and cost-efficiency for the hospitals.

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