Can Blockchain Technology Revolutionize Healthcare?
Not long ago, blockchain technology captured the imagination — and the wallets — of financial services firms that sought a “first-mover” advantage by integrating it into their outdated management systems. Experts predicted that blockchain could bring millions of dollars in savings, with uses ranging from real-time clearing and settlement of securities-related transactions to cross-border payments and regulatory compliance.
But with the finance industry’s fierce competitiveness and wariness of transparency, the adoption of the technology has so far brought few successes.
Now it’s the health care sector’s turn. Hospital systems, tech startups, pharmaceutical companies, payers, and others in the intensely competitive, $4 trillion health care business have set their sights on blockchain — the technology that supports bitcoin and other cryptocurrencies — with the hope that it can cut costs and boost innovation. From 2018 to 2021, the global blockchain in the health care market grew at an average annual rate of approximately 55%, driven by security and transparency concerns throughout the industry’s value chain, according to a recent?report.
It remains to be seen, however, whether healthcare companies can overcome the obstacles that have impeded technology adoption in the finance industry or the hurdles specific to patient care.
At its core, blockchain is a ledger that can keep track of transactions and assets — whether it’s cryptocurrency changing hands, a patient’s medical chart, or a pill moving through the drug distribution pipeline. The technology distributes information across multiple computer hubs, creating an immutable, decentralized system of linked and synchronized “blocks” of data, joined or “chained” by digital signatures.
Even more simply put, a blockchain is a decentralized list of largely uneditable digital records linked together by computer code. In health care, a blockchain network might work as follows: Imagine a lab technician who wanted to attach a doctor’s referral to a patient’s digital records on the blockchain. The technician would enter the transaction on the blockchain, creating a “block” consisting of the medical data related to the referral, the author of the transaction, and a timestamp. The block would then be delivered to the entire peer-to-peer network, which could include the patient’s physician and family members.
Proponents say that upgrading to blockchain could save the health care industry billions of dollars annually in costs associated with data breaches, information technology, operations, support function, personnel, counterfeiting, and insurance fraud. It has tremendous potential to allow organizations to verify sources of goods, track their movements, and strengthen transparency in supply chains. Companies could pinpoint fraud, contamination, or counterfeit goods immediately.
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The pharmaceutical industry, which loses approximately $200 billion to counterfeit drugs yearly, would be a natural beneficiary of the technology. Blockchain could also enable better health information exchange, which is essential in managing rising health care costs and promoting quality care.
The health care industry may be able to succeed where Wall Street has not. If successful, the resulting disruption could change the way companies in the health care sector deliver their services.
Covid-19 has helped usher the health care industry further into the digital world and bring more attention to the potential of blockchain. The pandemic pushed providers to adopt digital technology,?remote patient monitoring, and artificial intelligence to help providers monitor and treat more patients from a distance. Telehealth use similarly exploded.
According to a 2020 Organization for Economic Cooperation and Development?report, blockchain-enabled tools are emerging to combat the virus, including an identity management system supporting contact tracing in South Korea, a system for data-sharing, and software to support research. Blockchain has also been used or proposed for supply chain management for medications and medical supplies, the report said.
The financial services industry’s foray into blockchain technology illustrates some of its opportunities — and potential pitfalls — and may provide a road map as healthcare innovators contemplate how to push forward blockchain’s use.