Our Stories


Blockchain in the Healthcare Industry

Jason Collier - 17th Nov 2018 [updated 23rd Sep 2019] - Blockchain

Blockchain was invented in 2008 by Satoshi Nakamoto to serve as a digital record for transactions made with the cryptocurrency, Bitcoin. The dramatic rise of Bitcoin over the last few years has introduced the concept of blockchain to many, who, otherwise, might never have heard it! As a form of digital record, blockchain has the potential to be applied elsewhere. As such, the blockchain revolution has now made its way to the healthcare industry. To fully understand the future of blockchain in healthcare, one must understand the basics of blockchain technology.

What is Blockchain Technology?

The name, “blockchain”, comes from its structure, in which individual records, called blocks, are linked together in a single list, called a chain. Every block added to the chain is validated by multiple computers on the internet, which form a peer-to-peer (P2P) network. This decentralized and distributed network of computers ensures a single system cannot add invalid blocks to the chain and that the data in each block is immutable.

When a new block is added to the chain, it is linked to the previous block using a cryptographic hash generated from the contents of the previous block. This ensures the chain is never broken and that each block is permanently recorded. It is thus intentionally difficult to alter past records in a blockchain, since all the subsequent blocks must be altered first!

Because of its structure, blockchain technology offers a greater transparency, enhanced security, improved traceability and increased efficiency, all at a reduced cost! The video below gives a great 2-minute explanation of blockchain technology.

The most well-known application of blockchain is in cryptocurrencies, particularly Bitcoin. Each cryptocurrency uses its own blockchain by tracking records of ownership of digital cash so that only one person can be the owner at a time and cash can’t be sent twice. The application of blockchain to cryptocurrencies is explained in the picture below.

Blockchain Applied to Cryptocurrencies

Source: Steemit

However, blockchain’s real power arguably lies in its application outside of cryptocurrencies…

Blockchain in Healthcare

A major issue with the quality of most healthcare systems around the world is due to the large gap between the provider and the payer, which is only worsened with the inclusion of the “middleman”. This gap in the supply chain leaves the door open to fraud – drug counterfeiting leads to yearly losses of $200 million as an example. Another problem is that current healthcare systems see critical patient data scattered across different departments making the information difficult to access and more susceptible to theft!

Despite the advancements in technology, data is still not collected, analysed, secured or exchanged effectively. This means that a more advanced system is needed that is smooth, transparent, economically efficient and easily operable. Blockchain has become a proven presence in finance, however the future of blockchain in healthcare is arguably even brighter. Here are a few cases where blockchain technology can be utilized to make data in the healthcare industry more accessible, secure and reliable.

Population Health Data

Population health data refers to medical information of a certain demographic group. Management of this health data is difficult as there are issues regarding the security of data, the integration of data from various research studies and the accessibility of the data. Blockchain can address these issues by securing the data and allowing it to be traced in order to maintain the integrity of the data. Blockchain can also act as the central system by which all data is integrated. Larger data sets allow for more accurate decisions to be made regarding potential population health threats.

Patient Payments

The benefits of cryptocurrencies are no secret! Incorporating this technology into healthcare systems to facilitate patient payments can yield many benefits. Most notable of these benefits would be the elimination of fraud! Using blockchain technology along with smart contracts could go a long way in streamlining the payment process. The video below briefly explains the concept of smart contracts and how they can be effectively applied.

Drug Traceability

Counterfeiting of drugs proves to be a major problem with many healthcare systems worldwide, especially in developing countries. According to a Health Research Funding Organization (HRFO) report, 10 to 30 percent of drugs in developing countries are not original! The problems caused by counterfeit drugs include, but are not limited to, incorrect use, addiction and death.

Blockchain technology can be used to trace pharmaceutical drugs in a similar manner to which blockchain is used to trace money! Every new transaction relating to a certain drug will be added as a block which will be immutable as well as time stamped. Only pharmaceutical companies that are trustworthy will be allowed to enter a drug on the blockchain, ensuring that all drugs are authentic and traceable. The transparency of data in a blockchain will allow the complete path from origin to be monitored, thus, helping to eradicate the circulation of counterfeit drugs!

Data Security in Clinical Trials

According to the National Institute on Aging, clinical trials are research studies performed on people, aimed at evaluating a medical, surgical, or behavioural interventions. They are the primary way in which researchers find out if a new treatment, like a new drug, diet or medical device is safe and effective enough for commercial use.

Researches, backed by large companies, may modify collected data in order to make the outcomes seem more appealing. Blockchain technology can be used to make the data recorded from clinical trials more secure and transparent. Researchers will be able to prove the authenticity of all documents created and used in the process (such as informed consent, research plans, regulations and study protocol) thanks to the technology.

Patient Data Management

There are strict regulations on the privacy of patients’ data in all healthcare systems around the world. For this reason, it is of paramount importance that the data is kept secure. However, patient data cannot be restricted because patients need to share their data across the complex system of entities (doctors, pharmacies, medical aid etc) that exist in healthcare systems.

Introducing blockchain to the data-centric approach used in healthcare systems will resolve data management issues. A blockchain system will create a hash for each patient's health information block, along with a patient ID. A blockchain system will allow patients to reveal their necessary data to third parties while remaining anonymous. In the same way, a patient can decide to whom access will be granted and whether this access will be full or partial. This will give patients and their providers a one-stop access to the patient’s entire medical history, from all providers.

Apart from the patient’s point of view, blockchain also benefits the healthcare institution by increasing the efficiency of data management and reducing the costs thereof. This is becoming more important as the data volume increases each year making it harder for hospitals and clinics to process and store information


Blockchain technology is beginning to be implemented in healthcare systems around the world, largely due to the increased transparency, security and traceability which it offers. This is especially important in the fight against counterfeit drugs! It also benefits the management and security of private data which is so important in the healthcare industry. It will be a while until blockchain becomes accepted as the norm in the healthcare industry, but with so many potential use cases, blockchain is sure to disrupt the healthcare landscape for good in the coming years!

That brings an end to this article. If you enjoyed it, please share! If you want to get in contact, you can do so by clicking on this link.

Author Picture

Jason Collier

I am a current masters student at the University of Cape Town in South Africa. I recently completed my Bachelor of Engineering in Mechatronics, but decided to follow my passion for Healthcare Technology and further my studies with a Master of Science in Biomedical Engineering. I started HealthTechHub.net to use as a platform to discuss the latest developments in the Health Tech & Digital Health fields!