This is how blockchain will revolutionize healthcare

Imagine a patient file which is written with a permanent marker, is password protected, records the names of everyone who has opened or edited the file, and is available wherever whenever needed. Imagine a tablet of paracetamol that comes with the information about its manufacturing location, date and time stamp, every person handling the drug along the supply chain, and all this information is legitimate. Imagine an insurance claim filed for a surgical procedure, the details for which are automatically pulled from the patient file written with the permanent marker, and there is negligible possibility of a fraudulent claim.

Every year, the healthcare industry carries out approximately 30 billion healthcare transactions, of which, 50% are counterfeit. The problem of counterfeiting is not just limited to drug manufacturers, but extends to medical instruments manufactures. The World Health Organization (WHO) estimates that 8 percent of the medical devices in circulation today are counterfeit copies. These costs the industry a whopping $250 billion. And despite the high costs, 63% of physicians do not receive the data on time or receive inadequate information through referral letters. 400,000 deaths are recorded each year due to administrative mistakes, and 80% of these are due to miscommunication of patient-related data. Another issue with today’s system is manual documentation, where each provider fills almost 20,000 forms per year with an average cost of $20 for every documentation.

Apart from the health record management system, the lack of a reliable and transparent supply chain management system results in a massive loss for the industry. As a result of inefficient supply chains, the inclusion and sale of counterfeit pharmaceutical products is quite common in the industry. This alone results in the loss of over $200 billion per year for the healthcare industry in the U.S. All these combined make up for a substantial loss of money as well as life.

The promise of blockchain has widespread implications for stakeholders in the health care ecosystem. Capitalizing on this technology has the potential to connect fragmented systems to generate insights and to better assess the value of care. Wholesale reimagining of how healthcare is accessed and owned would tantamount to a nationwide blockchain network for electronic medical records may improve efficiencies and support better health outcomes for patients, though realistically, it is a far-off possibility.

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Envision that when a doctor sees a patient or writes a new prescription, the patient agrees to have a reference or “pointer” added to a blockchain. Instead of payments, this blockchain would record critical medical information in a virtually incorruptible cryptographic database, maintained by a network of computers, that is accessible to anyone running the software. But before an industry-wide revolution in medical records is possible, a new technical infrastructure—a custom-built “health-care blockchain”—must be constructed. There may be specific rules we want to bake into the protocol to make it better for health care.

From providing an immutable audit trail of interoperable electronic health records to addressing the associated data breach concerns, blockchain because of its distributed architecture, is uniquely adept to build a system that Is truly patient-centred and can percolate to use cases such as regulating the drug supply chain; recruiting patients for clinical trials; process medical billing & health insurance claims & real-time disease reporting and the exploration of disease patterns. Use cases will start off in small projects that reduce the duplicative work but can eventually swing to a system where patient’s control access rights to the data.

Counterfeit drugs and recalls of medicines make traceability a high priority for the supply chain. As drugs move through the supply chain, logistics companies need to adhere to drug handling, transport and storage guidelines. Several operating constraints such as maintaining temperature range, humidity, air quality within specified limits etc. need to be tracked. Additionally, smart contracts can be programmed that auto-adjudicate execution when pre-set criteria are met.

With EU implementing General Data Protection Regulation (GDPR) and India drafting Digital Information Security in Healthcare Act (DISHA,) privacy and data protection laws could set out the building foundations of a federated permissioned Blockchain network integrated with the health information exchange (HIE) model.

India has taken a few preliminary steps in this direction. CallHealth, provides healthcare platform and has partnered with ThynkBlynk, to use its proprietary Blockchain technology, ChainTrail, which enables different healthcare service providers to integrate and securely share their data on the network.

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Money began pouring into the blockchain space in 2017. “Blockchain” has skyrocketed in mentions, though rarely in the context of healthcare. The promise of new technology makes the theoretical upside much bigger than older investments, such as in platforms connecting doctors and patients, although the downstream financing environment for these types of companies in India is yet to unfold. For the Indian market, diagnostics is a major area for tech intervention, given that that there’s just one doctor available for every 1,700 people. In specialist care, that gets even more compounded.

To solve for scalability and sensitivity, blockchain projects are exploring ways to combine on-chain solutions with off-chain ones.

At first glance, there are some unrelenting challenges such as the need for high computing power to keep the transaction data encrypted and limited insight into the product lifecycle. The third challenge specific to India is that we do not have prerequisite nuts and screws in place to launch a digital health system. However, with the government moving towards digitisation and technological innovations in full throttle, we could be entering a phase where Blockchain may usher in a new paradigm comprising ‘Internet of Trust’ and ‘Internet of Value’.


The authors are Ashutosh Mayank, Managing Partner, Supply Chain Labs- Lumis Partners and Prajakt Raut, Managing Partner, Supply Chain Labs- Lumis Partners.