Blockchain in the Healthcare Sector

Healthcare is the largest sector in most G7 countries, amounting to over 16% of the U.S. gross domestic product (GDP). Singapore, currently ranked one of the best in healthcare by statista, announced that its National Health Expenditure could increase to $43 billion in the next 5 years, accounting for as much as 9% of the GDP in the same period. The healthcare system generally has seen a rise in demand, and many countries are pumping funds into one of the sectors that have witnessed the most innovative change in recent years. The significant transformation in the healthcare system is driven by cutting-edge technologies like blockchain which has demonstrated game-changing potential for facilitating secure and efficient data sharing in the system. 

In an era characterized by increasing digitization and a vast population, efficient data management and patient data protection are paramount. The fusion of blockchain, internet of things (IoT), artificial intelligence, and digital assets marks a paradigm shift in healthcare, addressing the challenges of security, privacy, and transmission of health data, fostering trust through transparency, streamlining administrative processes, and enhancing a patient-centered approach. Precedence research predicts the global blockchain in healthcare market size to hit around $14.25 billion by 2032, with an anticipated CAGR of 34.02% from 2023 to 2032

Application of Blockchain in Healthcare

The technology’s principle is straightforward and perpetually evolving, increasing and enhancing the network of blocks that adapt to the industry’s needs and peculiarities. In addition to being a catalyst for accountability, its secure, tamper-resistant, and accurate nature makes falsification or manipulation of data nearly impossible. Blockchain has numerous use cases in the medical industry, inspiring the improvement of different aspects of the sector. 

• Healthcare Data Management and Security

Data gathering, storage, and dissemination are important and complicated parts of the healthcare system. Despite technological advancements, the medical industry faces significant obstacles, preventing efficient and secure healthcare information management. According to the 2021 IBM security report, at $9.23 million per incident, the medical industry has the highest average cost of a data breach. Insider threats, ransomware, and phishing attacks are possible causes of breaches resulting in decreased patient trust, damaged reputations, legal penalties, and financial losses. 

Despite governments’ extensive frameworks, such as the Digital Personal Data Protection Bill in India and the United States Health Information Technology for Economic and Clinical Health (HITECH), to regulate and protect personal health information, there were records of sensitive data leaks. Through encryption, access control and authentication, blockchain technology improves security, provides privacy and prevents hacker attempts.

Blockchain’s decentralized and immutable architecture not only prevents manipulation and fraud but also gives patients full ownership of their medical data and prohibits healthcare providers from accessing information without patient permission. Role-based access control is essential to maintain security, transparency and auditability.

 

Lack of standardization among the healthcare stakeholders results in data silos and fragmentation that are difficult to integrate. The isolation is a challenge to coordinated care with the consequences of increased administrative burden and the possibility of errors. A blockchain-based application offering connectivity between existing electronic health record (EHR) systems at different healthcare institutions enables healthcare system interoperability. The technology’s ability to eliminate intermediaries and simplify data sharing improves care coordination and patient outcomes. 

• Supply Chain Management

From raw material gathering to delivering the products to the end user, supply chain involves complex processes done in different stages. Supply chain with a detailed record of products at every stage is essential to reduce the prevalence of counterfeit items in the healthcare industry. Blockchain technology reduces trust obstacles, automates order placement through smart contracts, and improves inventory management.

FISCO BCOS, a reliable and high-performance blockchain platform, is used in vaccine safety systems to trace vaccine supply from manufacturer to customer. eZTracker, the product of Zuellig and Merck’s partnership is devised to trace Human Papilloma Virus and COVID-19 vaccines, preventing people from receiving fake or expired vaccines. Blockchain plays a pivotal role in tracking medical devices and clinical trial supply chain, ensuring transparency, safety, and reliability in these fields.  

• Clinical Trials 

Blockchain reinforces trust by addressing the issues of false results and data disintegration in clinical trials. The technology provides clarity and identification of false content, maintaining transparency and security for data, thus assuring data credibility and accuracy. Blockchain eliminates fraud and streamlines trial processes. 

Embleema, designed to revolutionize clinical trials and regulatory analytics, enables participants to virtually approve the collection, storage and analysis of their health data, thus facilitating the development of new treatments and improving overall healthcare outcomes.

Challenges and Limitation

Despite its potential benefits in healthcare, certain issues must be addressed for the smooth transition and adoption of blockchain. The immutable nature of the technology may provide challenges as errors or inaccurate data might be difficult to erase or modify once posted on the blockchain. Every participant in the network can access the data stored on the blockchain, therefore data privacy and confidentiality depend on the professionalism of the healthcare provider.

• Performance and Scalability

Adoption and implementation of blockchain rests on its perceived performance which, in turn, is measured by throughput and latency. Throughput (measured in transaction per second – TPS) is the number of transactions processed within a specific timeframe while latency refers to the time taken to finalize a transaction on the blockchain after submission. Both are critical performance indicators for assessing the consensus mechanism. Generally, platforms that use proof-of-work (PoW) consensus mechanisms have low transaction throughput. For instance, Ethereum’s throughput is between 15 TPS to 30 TPS, while Bitcoin generally has 7 TPS.

With the growing storage requirements of blockchain systems, low transaction throughput becomes a major scalability issue. Off-chain computing, such as offered by layer 2 solutions can partially resolve scalability issues in healthcare models. Layer 2 solutions, like Bitcoin’s lightning network and Ethereum’s plasma, execute some transactions off the chain and store the execution results on the chain.

• Storage Limitation

In healthcare, massive amounts of data, including medical records, test reports, and other forms of graphical data need regular processing. The storage capacity of blockchain becomes a challenge as the data volume increases. Simultaneously, the storage costs grow. Blockchain Layer 2 models, such as BigchainDB, stand to address the storage limitations as they process transactions off-chain and submit the final state to the blockchain, increasing the data speed and processing while ensuring security. Medifakt is another blockchain platform that combines blockchain technology, IoT, and machine learning to enhance secure sharing of medical data within and across specialties. It supports the storage, evaluation, interpretation and transfer of medical data and images.

• Adaptation

Healthcare providers who are used to the traditional medical record management systems may find adjusting to blockchain-based EHRs difficult. Workers and stakeholders may need additional training to use the new computerized system. 

To protect healthcare data, countries worldwide have implemented data protection laws and regulations. The adoption of blockchain-based solutions in such countries depends on their compliance with the already established regulations.

• Standardization and Interoperability

Achieving the goal of blockchain’s use in data management hinges on the ability of different systems and organizations to exchange and collaborate using data. Teamwork and compliance with applicable regulations are required for exchanged data to be accurately interpreted while preserving the meaning and context within which the data is exchanged. Lack of interoperability protocols and standardized data format is a challenge to sharing and integrating medical data between hospitals and healthcare providers. Different healthcare providers or institutions have various characteristics and standards and may be based on different blockchain platforms. Interoperability between these multiple blockchain systems presents another challenge.

Across the globe, many blockchain-based health information management platforms, such as Patientory, Medicalchain, and BurstIQ, enhance interoperability between different healthcare systems, facilitating data sharing and seamless communication among stakeholders while maintaining patient privacy.

Conclusion

Blockchain has been examined and found to improve aspects of healthcare, such as clinical trials, drug supply chains, health data management, and health insurance. The technology optimizes the delivery of healthcare while addressing the industry's long-standing problems. However, like other cutting-edge technologies, blockchain faces challenges regarding scalability, throughput, and storage, among others. Blockchain Layer 2 models offering on-chain and off-chain transactions are being deployed to address these issues.