How does blockchain actually work for healthcare?

To say the technology is advanced is an understatement, but hospitals should understand the reasons that it’s getting so much attention.
By Mike Miliard
12:25 PM
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Health information technology and information security specialists are hearing a lot about blockchain these days. “It’s the answer to interoperability.” And “the technology can solve healthcare’s looming security problems.”

But what the heck is blockchain, anyway?

The so-called digital ledger technology was developed in 2008 by Satoshi Nakamoto, a possibly pseudonymous person (or perhaps multiple people) who designed it as the underpinning for the exchange of the digital cryptocurrency known as Bitcoin.

[Also: Blockchain faces tough roadblocks in healthcare]

Blockchain transactions are logged publicly and in chronological order. The database shows an ever-expanding list of ordered "blocks," each time-stamped and connected to the block that came before it — thereby constituting a blockchain.

Crucially, each block cannot be changed, deleted or otherwise modified: it's an indelible record that a given transaction occurred. That’s exactly what has many in healthcare excited about blockchain's potential for data security. Its open and decentralized nature could lend itself well to managing health records and proving identity.

Rather than a central database, the blockchain record can be distributed and shared across networks, with credentialed users able to add to – but not delete or alter – the transaction log. Transactions are encrypted and must be verified by the network.

[Also: Old ways of thinking won’t work for Blockchain, experts say]

"The software used to build a chain ensures that everyone on the network sees, validates, and confirms each proposed next block of data in the chain," Brian Behlendorf explained in a blog post for HIMSS.

"For example, if any node on the network tries to transfer a particular asset twice, to two different parties, that transaction would not be validated by others on the network, and there would be no agreement to add it as a new block on the chain," said Behlendorf, executive director of Hyperledger, an open-source collaborative launched by the Linux Foundation to advance the use of blockchain beyond bitcoin transactions.

Behlendorf also spotlighted the importance of so-called smart contracts on the blockchain ledger: "simple software programs that runs across all nodes in the network and can extend the validation logic at each node in a way that is automatable and undeniable." In healthcare, for example, such smart contracts could be deployed as an "authorization process and confirmation step that notifies the patient – or even puts them in control – when their data is shared from one address to another."

Behlendorf said that because blockchain technology is distributed by design, storage space is limited, so small data or metadata is preferable. The option is to store records or files either on- or off-chain, he said. Large healthcare files such as imaging scans or PDFs wouldn't need to be stored entirely on the chain, but could be linked to it with a hash, or cryptographic numeric fingerprint, to ensure it hasn't been altered.

While one of the strengths of blockchain is its visibility and therefore accountability, not all blockchains are publicly available, he said.

"Just as you might have a private network at your house, or use a VPN to connect to the office, there will be private or consortium chains running between specific organizations, perhaps with a legal or regulatory agreement binding the participants," Behlendorf said.

A healthcare organization, for example, could "limit its network nodes to only HIPAA-covered entities, in addition to encrypting some data and leaving other data off-chain to provide multiple layers of security."

Emerging use cases

While the two most commonly cited examples of how blockchain can be used in healthcare are data interoperability and security, the stream of new possibilities is flowing as well.

Tamara StClaire a health IT advisor who previously worked as chief innovation officer at Conduent Health, outlined several at HIMSS17, including master patient index, claims adjudication, supply chain and clinical trials.

When it comes to a master patient index, for instance, hospitals currently have as many as 20 different ways to enter a simple date-of-birth and no real way to standardize that once it’s been done. Blockchain could ease that by tying patients to their data, rather than identity, StClaire said.

Blockchain could also be used to automate adjudication, she said, such that the decision to deny or pay a claim is made without human intervention. That same sort of automation could also be applied to the supply chain to monitor contracts, for example, throughout the entire lifecycle.

On the clinical trials front, StClaire said the big advantage is using blockchain to create a layer of de-identified data that researchers could tap to recruit patients and more.

Blockchain’s interoperability and security potential, of course, could enable the Holy Grail of a longitudinal health record by securing data as it’s exchanged among organizations in a format that is usable for various clinicians across the care continuum.

One thing is certain: Healthcare has taken to blockchain in a big way over the past year and is expected to continue innovating and investing in the technology in the near future.

A recent report from Deloitte showed that, while the technology is a hot topic in industries from financial services to telecommunications, healthcare is planning the most aggressive deployments, with 35 percent of health and life sciences respondents saying their company plans to deploy it within the next year.

And some organizations are putting big money behind the projects. Deloitte found that 28 percent of respondents across all industries said they'd already invested $5 million or more, while 10 percent have invested $10 million or more.

Twitter: @MikeMiliardHITN