Why Blockchain is the New Buzz in Healthcare

Blockchain has been the buzzword in data security since it was first conceptualized by Satoshi Nakamoto in 2008 as part of the Bitcoin cryptocurrency design. The application acted as a distributed ledger and safeguarded all transactions that took place on the network. While the idea of blockchain is attractive, the hype has largely outpaced the hard reality of implementation but that may all change in the next year.

Recently, PricewaterhouseCoopers released a report on blockchain application in the healthcare industry and identified six areas where it could have a high impact. This includes supply chain and inventory management; enrollment and provider data management; back office functions and payments; data management; managing risk and regulatory issues; and research and development.

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Blockchain technology can reduce expenses associated with transactions in a similar way that TCP/IP (transmission control protocol/internet protocol) did, said Marco Iansiti and Karim Lakhani in a recent Harvard Business article. “TCP/IP unlocked new economic value by dramatically lowering costs of connections,” the Harvard professors stated. Blockchain could do something similar but at a much faster rate.

Concepts like smart contracts can reduce the need for human intervention in these transactions. The agreements can automatically go into effect once specific agreed-upon conditions have been met. Supply chain management also becomes more transparent and efficient with blockchain encryption. Inventory of medications and supplies can be tracked across the manufacturing, distribution and dispensation processes to ensure minimal loss.

Simply explained, blockchain functions as a distributed ledger where a growing list of records, called blocks, are connected using encryption. In other words, a file is written once and becomes read only. Data remains protected due to the elegant simplicity of its security design: one record – or block – cannot be altered without other blocks in the chain also being altered.

As Brett Blackman, CEO of Healthsplash, points out, modifying a number of blocks in the chain would require a collusion of the majority of the network. This feature helps maintain the integrity of the information and allows for communication between stakeholders. Healthsplash is currently trial running an application with KanCare, Kansas’ Medicare program, to improve efficiency of verifying participant eligibility through a unified digital platform.

The future of blockchain technology in healthcare was best described by Mark Treshock as “the perfect paradox”. Medical data must be simultaneously secured and shared and this method of doing both will allows users faster access to the large amounts of data necessary for improving provider delivery of service. While a 2016 IBM survey showed that United States medical providers were slower to adopt blockchain applications, up to this point, new trends in cloud-based platforms for healthcare may mean big changes ahead for 2019.