Blockchain in Healthcare Administration – An Introduction

Recently the systems of several major United Kingdom hospitals were “locked for ransom” by cyber attackers, whom demanded payment of 45 Bitcoin, approximately $19,000, to unlock these hospitals’ data. The genesis of Blockchain technology (Blockchain) is Bitcoin.  Blockchain’s peer-to-peer structure makes tracing ransom payments nearly impossible. On the other hand, could the sophisticated encryption of Blockchain have prevented this attack?

Our research found Blockchain will likely transform healthcare business systems over the next ten years.  In this article, we define Blockchain and identify how it may impact healthcare business systems.

What is Blockchain?

A blockchain is "an open, distributed ledger that can record transactions between two parties efficiently, in a verifiable and permanent way.  The ledger can also be programmed to trigger transactions automatically."[7]  Blockchains are designed to resist modification of their data — once recorded, data in a block cannot be altered retroactively. Using a peer-to-peer network and a distributed time stamping server, a blockchain database is managed autonomously, without a trusted third party, like a bank.  (Source: adapted from Wikipedia, 05/10/17). A great introduction to Blockchain can be found on this Ted Talk by Don Tapscott. 

According to HashedHealth, “...for most healthcare organizations, Blockchain will be transformational over the next 10 years. Blockchain systems will rewrite areas such as security, payments, interoperability, revenue cycle, claims processing, supply chain, and related contractual matters.”

Blockchain’s leaders are following the these familiar paths of technology innovation:  

1) Public, open source Blockchain platforms used by a myriad of start ups, 

2) Sponsored open source and proprietary consortiums Hyperledger, with 130 member companies, like IBM, Intel, NTT Data, etc., and 

3) Private, proprietary Blockchain projects developed for their networks by large banks and healthcare organizations.

Healthcare business systems and Blockchain – what are some possibilities?

In an article by Mike Miliard in HealthcareITNews, Blockchain's potential use cases for healthcare: hype or reality? The author summarizes Blockchain’s potential impact on health business systems as “the technology's implications for interoperability, privacy, claims processing and more are intriguing. But many challenges must be addressed before wider applications become possible.”  He lists several potential uses for Blockchain that could transform healthcare business systems including: automated claims adjudication, interoperability - through creation of a “health chain” of information, and supply chain - leveraging smart contracts.

We think Blockchain will become a significant “sustaining” technology over the next 10 years used by hospitals, clinics, government and insurance companies to streamline processing claims, revenue transactions, and secure the exchange of patient health information (PHI).  The outlook for Blockchain being used by new entrants (healthtechs) to “disrupt” these healthcare incumbents is unclear.  However, one potential Blockchain “blockbuster” application may be “secure patient ID.”  If broadly adopted, this app could disrupt healthcare by giving patients independent control over their PHI, who sees it and how it is processed.  

Blockchain technology is progressing rapidly.  However, in light increasing ransom ware and cyber attacks, it is unclear whether Blockchain will establish the public and private trust needed to realize its potential. Healthcare organizations may wish to monitor Blockchain closely.

About the author:  Paul has thirty years of business technology, consulting, and IT executive management experience.  For the past nine years, Paul has assisted executives at banks, hospitals, clinics, insurance companies and non-profits to prioritize and implement strategies that leverage their unique strengths, using technology to serve customers, save money and grow.

Claude Blenman has more than 17 years of experience successfully selling a broad range of products and services.