Blockchain in healthcare: Reality vs. hype

It seems the entire healthcare world is buzzing about blockchain these days. Originally devised for the cryptocurrency Bitcoin, blockchain is an encrypted ledger of digital transactions via a peer-to-peer network. The data relating to these exchanges are saved inside cryptographic blocks, connected in a hierarchical manner to one another. This creates an endless chain of data blocks that allows users to trace and verify all of their transactions.

While its origins are in finance, blockchain can basically be applied to exchange anything of value — including health data. As such, many have deemed the technology as the answer to the healthcare industry’s current interoperability problem.

In essence, blockchain could allow various healthcare organizations — including providers, payers, pharmacies and clinical researchers — to exchange data in a standardized format that enables decentralization. The technology could effectively replace today’s health information exchanges (HIEs), creating a mesh network for transmitting secure, near real-time health data to all stakeholders — including patients.

Sounds great, right? Why then aren’t we in the midst of a blockchain revolution?

Well, as it turns out, nothing is ever quite as easy as it seems, especially in healthcare. While blockchain does have a lot of potential, there are also several obstacles preventing its widespread adoption in our industry. Let’s take a closer look at each.

Blockchain’s undeniable potential

The potential for blockchain is real and extremely enticing. Because it’s a transparent, electronic ledger that can be shared among a permissioned group of users, it can allow everyone in a group to see the latest data in near real-time. This could improve patient data discovery across a broad spectrum. Furthermore, blockchain can leverage open APIs, including Health Level Seven’s Fast Healthcare Interoperability Resources (FHIR) standard, allowing it to consolidate lifetime clinical records from multiple EHR systems, regardless of vendor.

According to a recent survey from Deloitte, healthcare organizations are particularly interested in four potential promises from blockchain:

1. Disintermediation

Health systems could reduce their reliance on intermediaries (e.g., medical data aggregators, claims clearinghouses, data validation services) and replace them with participants in a blockchain.

2. Transparency and auditability

Blockchain can improve transaction visibility among ecosystem partners and improve operational efficiencies. This could have a significant impact on value-based reimbursements, clinical supply chains and other complex transactions.

3. Industry collaboration

Blockchain can provide a more efficient way for healthcare organizations to share information for applications such as provider credentialing, longitudinal patient records and clinical trials.

4. New business models

Blockchain could potentially introduce new revenue-generating opportunities into the healthcare sector (e.g. data ownership and monetization, AI analysis).

From a clinical perspective, perhaps the most exciting characteristic of blockchain is its potential to liberate patient-centered data. Today, the vast majority of health data is trapped in silos and enterprise systems, whether they are EHRs, radiology systems or other databases.

Many of these systems are proprietary, and the hospital or health system essentially owns the data. Furthermore, there could be multiple, often contradictory, versions of this patient data stored in different repositories throughout various organizations.

With blockchain, each individual participant (or node) is required to hold a copy of the record and any potential changes to the data must be compared against every other node before being approved. This workflow could put health data ownership back in the hands of doctors and even extend it to the patients themselves. Furthermore, it strengthens security and reduces the likelihood of unauthorized changes, creating a single source of truth.

Blockchain’s obstacles in healthcare

So what’s the holdup?

Well, we are of course dealing with the healthcare industry here — one of the biggest laggards when it comes to adopting new IT and data management strategies. And stringent industry regulations, security concerns and existing data standardization problems are all key reasons why blockchain adoption has been slow in healthcare, according to a recent report by IDC Health Insights.

One identified security threat with the technology is that any group with 51 percent or more control of the nodes in a blockchain could conceivably tamper with the data. This has definitely given healthcare providers reason to pause, but would take a significant effort to pull off.

Uncertainty around cost is another roadblock. For example, the undetermined cost of blockchain solutions has caused 88 percent of healthcare leadership respondents from committing to a timeframe or anticipated deadline for deploying the technology, according to a recent Black Book survey.

However, perhaps the biggest reason for blockchain’s slow adoption in healthcare is that there are very few proofs of concept of the technology in the industry. It’s still a bit of a mystery how it will work.

This point was made clear in the Deloitte survey where several respondents admitted to having “blockchain fatigue,” feeling the potential of the technology has been over-communicated, while its real-world benefits remain elusive. As such, 44 percent of the U.S.-based executives who responded to the survey said they think blockchain is “overhyped.”

Finally, something else is necessary for blockchain to be widely adopted in healthcare. Something that historically hasn’t been a strong suit of our industry — collaboration and cooperation.

Blockchain requires all organizations supporting patient care to be aligned on improving data management. They must be willing to embrace data transparency and work together to write new standards and invest in new technologies that accelerate information exchange. Federal incentives were necessary to get healthcare providers to start adopting EHRs en masse. What will it take for an even broader group of healthcare stakeholders to commit to blockchain?

Where we stand

With these factors in mind, what’s the realistic expectation for blockchain taking hold in healthcare? It’s hard to say, but recent analyst projections are somewhat optimistic.

For example, IDC Insights suggests that one in five healthcare organizations will adopt blockchain solutions by 2020, moving beyond pilot projects to actively using the technology for operations management and patient identity services. Similarly, 55 percent of healthcare executives believe blockchain will be disruptive, with more than 60 percent believing they will lose their competitive advantage if they don’t adopt the technology, according to the Deloitte survey.

As a result, 63 percent of healthcare respondents say they plan to invest more than $1 million in blockchain over the next calendar year.

That being said, most experts still believe mainstream blockchain adoption in healthcare is still 5-7 years away. It’s simply too big and complicated an undertaking to rush into and, as discussed, several questions still remain.

However, whether it’s in your near-term plans or not, you would be wise to begin preparing your organization for an eventual blockchain implementation — whether that push comes from within your enterprise or from external partners that want to work with those that embrace blockchain.

Since the biggest blockchain benefits involve data exchange with external sources, a good first step to becoming “blockchain-ready” is to consolidate and streamline your data repositories as much as possible. You want your internal sources of truth to be as comprehensive as they can be so that you’re sharing the most accurate and comprehensive data possible in an eventual blockchain transaction. This will involve connecting and consolidating as many of your disparate internal silos as possible.

In the end, interoperability is a challenge all healthcare providers are working diligently to address. While blockchain may be a key piece of this puzzle, we shouldn’t think of it as a magic bullet.

Ken Congdon

Ken Congdon

Ken Congdon is the team lead of solution marketing at Hyland. His mission is to develop engaging content that educates healthcare providers and payers about potential solutions to their most... read more about: Ken Congdon

4 Responses

  1. Avatar Colleen Sirhal says:

    Well said Ken!

  2. Ken, your overview opens my mind to so many possibilities for its use in one of my customer’s organisation and I would like to talk to you about it whenever you have the time.

  3. Ken, can you point me to where block chain is being used or even contemplated in lab testing operations? I have an OnBase customer in a standards regulation role and want to know if this technology can improve the integrity of their testing process?

  1. 04/14/2019

    […] Blockchain in healthcare: Reality vs. hype (Hyland) […]

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