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Blockchain In Healthcare: 6 Possible Use Cases

  • 17 October 2018
  • Sam Mire

One study ranked the United States healthcare system last among 11 industrialized nations. It suffers from inefficiency and inequity. It’s not as if foreign bias skewed the results: the study was published by the Commonwealth Fund, a US-based foundation improving healthcare through objective analysis. It found that the United States spent $8,508 per person on healthcare in 2011, compared to $3,406 in the United Kingdom, which ranked first overall. Other findings suggest that hospitals could increase care output by as much as 26 percent if they find new ways to eliminate operational inefficiencies.

The blockchain may be the route to efficiency, especially if hospitals employ it comprehensively. The technology could help downsize electronic health records, identify fraud, and assist doctors and nurses with administrative tasks.

Blockchain in healthcare - Practical use cases

Electronic Health Records

Blockchain use cases in healthcare - Electronic health records

Imagine a single patient record portal for that every medical specialist could access. No more arriving 30 minutes early to fill out paperwork and cramp your hand before your appointment. Sounds good, right?

Electronic Health Records (EHRs) were mandated under the Affordable Care Act, and they’ve seen a rocky rollout. 74 percent of surveyed physicians said their productivity either stayed the same or got worse for having to upkeep electronic records databases. EHR systems are expensive, too. One assessment showed a 10.1 percent decline in operating cash flow after paying EHR installation costs. And EHR contractors can raise their annual fees by as much as 5 percent each year. The expense adds up quickly.

We have yet to see a viable industry-wide database. Patients still fill out the same forms and answer the same questions every time, and doctors face their own annoying paperwork.

Interoperability is one of the hottest buzzwords in health IT. Though less than 5 percent of healthcare providers have blockchain in their business plans, some believe they can tame the EHR briar patch with its help.

Companies Trying to Solve This Problem 

Insurance Records and Reporting

Blockchain use cases in healthcare - Insurance records and reporting

Health insurance: we all need it, but does it really have to be such an expensive pain in the ass?

All Americans must have health insurance or face financial penalty, according to the Affordable Care Act mandate. 7.5 million tax filers faced a penalty in 2014, while another 12.5 million escaped a fine through an exemption. More than 4 million tax returns in 2017 showed penalties totaling nearly $3 billion due to lack of coverage.

Non-compliance issues don’t stop with the patient, either. UnitedHealthcare was fined $2.5 million in 2018 for various insurance law violations, including sending a patient to a hemophilia service provider that wasn’t approved by the state. Aetna, another large healthcare insurance provider, incurred a $350,000 fine for issuing new policies in a restricted market.

It’s fair to assume that these companies didn’t willfully incur fines. Fragmentation between insurers, providers, patients, and regulators was bound to get somebody in trouble eventually. And it certainly has.

Some insurers are exploring how the blockchain’s distributed ledger technology could  record real-time changes to patient data. Such a system could help insurers and healthcare providers avoid massive fines due to archaic recordkeeping. It can also improve the quality of care for patients who switch providers or insurers.

Companies Trying to Solve This Problem 

Humana, UnitedHealth, and Optum are working together on a pilot of blockchain tech to simplify provider directories and patient data management. 

Preventing Fraudulent Billing

$3.3 billion in healthcare fraud judgments and settlements were collected in 2016, according to a report from the Department of Health and Human Services. That’s  not counting undiscovered fraud. A combination of fines and jail time hasn’t proven to be a strong enough criminal deterrent.

Blockchain-based fraud prevention could lower administrative costs by automating claim processing and adjudication. It could also be an real-time record to monitor fraudulent claims more quickly and affordably.

Companies Trying to Solve This Problem 

  • Healthcombix – Decentralized healthcare payment networks

Reducing Counterfeit Pharmaceuticals

Counterfeit drugs take a staggering toll on global health. The World Health Organization estimates that 10 percent of the world’s pharmaceuticals are counterfeit. This puts $75 billion in the pockets of  illegal drug manufacturers responsible for an estimated 100,000 deaths per year.

Pharmaceuticals are difficult to police, as 40 percent of drugs come from overseas. We import approximately 80 percent of the active medicinal components in our pharmaceuticals.

These figures show why the blockchain is necessary as a unifying record for legal drug suppliers. Centralized databases have proven dangerously ineffective in catching counterfeits. A blockchain record would make the supply chain more accountable and help authorities identify fraudulent drugs more quickly. See Blockchain in Supply Chain Management to understand how this technology can improve the provenance of goods like pharmaceuticals.

Companies Trying to Solve This Problem 

Clinical Trials

Blockchain use cases in healthcare - Clinical trials

Medical testing holds high standards on data verification because lives hang in the balance. Data from medical tests must be near 100% verified to ensure the data is free of fraud. It's a high but but reasonable standard.

It’s also expensive. Studies show that  source data verification (SDV) processes typically consume more than one-third of a Phase 3 trial budget. In medical device clinical trials, 15 percent of the overall budget is usually dedicated to SDV monitoring processes, with little return on investment. The $150,000 spent on SDV in a million dollar trial produced a return of $525.

By using the blockchain’s cryptographic hashing systems, which verify and timestamp data, researchers could drastically reduce these costs. By hashing and storing each element of a clinical trial as the experiments occur, the current post-study verification processes — riddled with costly redundancy — will become a memory of the past.

Companies Trying to Solve This Problem 

  • Innoplexus – Blockchain for drug discovery and trials

Protecting Patient Data

Blockchain use cases in healthcare - Protecting patient data

The cost of a single stolen record in the healthcare industry averaged $380 in the United States in 2017. It’s a staggeringly high number compared to the global average of $141.

Wide-scale healthcare data breaches cost even more. They cost $6.2 billion every year in the United States alone. That cost inevitably gets passed down to the patient. Healthcare organizations lose approximately $3.7 million in revenue per data breach, with HIPAA fines, lawsuits, and recovery costs quickly adding up.

Making the matter worse, consumers ranked data privacy ahead of cost of care as the most important healthcare concern. Something's got to give.

Blockchain advocates in the healthcare industry tout the technology as a solution to widespread data breaches. Blockchain systems have multiple security checkpoints that minimize vulnerability. The technology could also give patients greater oversight of their own data through shared password-protected records.

Companies Trying to Solve This Problem 

  • Healthcombix Preserving patient data privacy with blockchain technology
  • MedicalChain – Blockchain secured EHRs
  • MedRec – MIT project to improve patient data integrity on the blockchain
About Sam Mire

Sam is a Market Research Analyst at Disruptor Daily. He's a trained journalist with experience in the field of disruptive technology. He’s versed in the impact that blockchain technology is having on industries of today, from healthcare to cannabis. He’s written extensively on the individuals and companies shaping the future of tech, working directly with many of them to advance their vision. Sam is known for writing work that brings value to industry professionals and the generally curious – as well as an occasional smile to the face.