Is Healthcare Ready For Blockchain?

Advantages may run into entrenched interests.

The healthcare industry is known for being careful and cautious, so one could be forgiven for assuming that healthcare and cryptocurrency have little in common. While the healthcare industry demands safety and risk-mitigation, cryptocurrency is built on a high-risk, high-reward model in which a tiny investment can turn into a fortune and back again at the speed of an eccentric billionaire’s tweet.

Yet the backbone of cryptocurrency — blockchain technology — could soon be a very important part of the healthcare industry. Although best known for its association with cryptocurrency, opaquely named blockchain is actually a novel type of data-storage architecture with many potential applications.

Invented in 2008, the technology involves recording data in distributed ledgers that are duplicated across various computer systems (blocks) within the network (chain). The transparency and redundancy in the system provide a level of data security that previously was hard to attain. It means if one computer system in the blockchain is compromised, the flaw would immediately be obvious to the other systems on the chain. Instead of allowing cybercriminals to steal data in the dark recesses of the internet, blockchain forces would-be data thieves to operate under a spotlight.

Healthcare’s hesitancy

Given rising cases of ransomware attacks and rising concerns about medical privacy in general, blockchain might seem like a godsend for the healthcare industry. Yet that potential has yet to translate into a quick embrace of the technology.

Tony Little, vice president of solutions architecture at Prescryptive Health, a technology company that provides blockchain-enhanced products and services to the healthcare and pharmacy industries, said it’s nothing new for healthcare entities to be cautious around new technology.

“Case in point, it took government regulation in 2009, in the form of the HITECH Act, to push the industry to adopt the electronic medical record by generously offering money to health systems to implement,” he tells Managed Healthcare Executive®.

Little says some of the earliest moves have come in the form of experiments and pilot programs like the Synaptic Health Alliance, which is seeking to streamline provider directories, and the Health Utility Network, which is aimed at improving coordination of benefits. Though such programs are limited in scope, they involve major players in the health insurance industry, including Aetna, Anthem, UnitedHealthcare, and Humana.

Patient empowerment

Xudong Huang, Ph.D., of Harvard Medical School, believes patients will be a big winner in the blockchain era.

“Compared to other types of data management/security, blockchain-based systems can offer both data security and data ownership at the same time, in my view,” he says.

The idea that blockchain will give patients more data ownership is based on the ability of blockchain-based systems to require patient authorization for data retrieval. In a 2019 paper, Huang and colleagues proposed using multiple-signature — “multisig” for short — contracts in healthcare blockchains. Under a multisig approach, both the patient and his healthcare provider would need to use their own private keys — essentially super passwords —in order to access the patient’s medical record on the blockchain. For patients, it would mean providers could not access their personal medical information without permission. However, it would also mean patients could not alter their health records; only the providers could. “There have been examples of multisig contracts being used in the financial field, property recording, etc.,” Huang said. “I am not aware of its application in the healthcare field.”

To Huang, the benefits of blockchain security in healthcare are about more than privacy for the sake of privacy. As a psychiatrist, one of his areas of interest is Alzheimer’s disease, a neurodegenerative disorder for which there is no known cure. One concern within the Alzheimer’s community is the potential that the presence of biomarkers for the disease could be
 inadvertently disclosed in such a way that a patient might face discrimination when applying for life insurance or jobs, among other circumstances. Implementing blockchain would add a significant layer of protection, he said.

Benefits for payers

In a 2020 review published in the International Journal of Medical Informatics, Alaa Abd-alrazaq, Ph.D., of Qatar’s Hamad Bin Khalifa University, and colleagues examined the benefits and potential hurdles of blockchain in the healthcare industry. They cited four key characteristics of blockchain that lead to direct benefits for the healthcare industry: immutability, decentralization, transparency and traceability.

Immutability means data cannot be changed without leaving digital fingerprints, and decentralization of data makes it harder for ransomware attackers to target hospitals and insurers because data would not be locked in a single location.

Transparency exists in blockchain because all transactions are visible to anyone with access to the blockchain, and traceability allows participants to understand who is accessing information. For instance, the ability to follow data with verifiable time stamps could help with supply chain issues by allowing vendors such as drug companies to better track their products, they added.

Little explains that blockchain can also lower costs. He noted that often when insurers work with PBMs, the PBM controls certain data, ostensibly for security reasons.

“However, this arrangement leaves insurers needing PBM approval for access to this data, including for auditing purposes or to comply with government reporting,” he says. “In many cases, PBMs will charge fees to an insurer to access its own data.”

With blockchain, insurers can have ready access to necessary data without sacrificing data security. This not only cuts costs but also reduces opportunities for error, he adds.

Entrenched interests

But while companies needing access to data might benefit from a more open, decentralized model, that would leave companies that thrive on such access in a losing position. Little notes that many of the most profitable sectors of the modern healthcare economy are built around acquiring and storing data and data-powered services.

“Using a blockchain flies in the face of those traditional models, and it is hard for incumbents to get past this to use the technology to solve the big problems that plague the industry,” Huang says.

He says another issue is how blockchain could change the role of so-called big data in healthcare or whether it will change things at all. Increasingly, healthcare companies and academic researchers have relied on the creation or acquisition of massive datasets to come up with medical insights that would have been impossible in a previous era. “Siloing” data might be problematic in many ways, but the very presence of massive datasets is part of what makes big data healthcare analytics possible.

But blockchain could actually help — not hurt — big data breakthroughs.

“An easy solution for this is any de-identified patients’ data can be released to a public database for easy access,” he says. The way Huang sees it, blockchain might make it easier to do data analytics, by broadening and simplifying access among vetted entities with access to the blockchain on which the data are stored.

Generating incentives

As Huang explains, some blockchains are completely public while others are private or based on a permissions system that controls access. The protocol behind the public blockchains, like those associated with cryptocurrencies, is built to generate digital “tokens” that can be sold to help offset the costs of the system, Little says.

However, healthcare-focused blockchains use systems with access limited to authenticated entities. Prescryptive, for instance, has partnered with ConsenSys, which created a permission-based blockchain product called Quorum Blockchain Service. Permission-based blockchains are a better fit for highly valuable data like medical records, but absent a built-in revenue-generating mechanism, they must win clients based on the potential for cost savings.

“The economic incentive to run a node on a permissioned blockchain proves to be a major hurdle,” Little says. “Using the lower audit cost and data sharing may be enough to overcome these concerns, but it adds to the reasons why incumbent players, who hold data today, are unwilling to share, even for the common good.”

Jared Kaltwasser, a frequent contributor to Managed Healthcare Executive®, is a freelance writer in Iowa.

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