BLOCKCHAIN FOR HEALTHCARE — HYPE OR REALITY?

Over the course of the past couple of months, the topic of blockchain has surfaced multiple times in my conversations with several Healthcare CxOs. Frankly, I was surprised for two main reasons. First, blockchain is a relatively new technology that has only been around since 2008 and its most well-known use case is Bitcoin, which is a cryptocurrency and digital payment system that continues to make global headlines. Second, based on my experience, the healthcare industry has never been at the forefront of adopting new technologies, historically it has taken a “wait-and-see” mindset letting other industries take the lead then vetting out the options.

There are folks out there touting that blockchain is the next Internet, expected to revolutionize multiple industries just as the Internet did. It’s certainly possible that this day may indeed come soon, but I am certainly not jumping on that bandwagon yet. Blockchain is an undeniably ingenious invention — the brainchild of a person or group of people known by the pseudonym, Satoshi Nakamoto. But since then, it has evolved into something greater and the main question everyone is asking is: What is Blockchain? And more importantly, from my perspective, is this a viable technology for the healthcare industry?

What is Blockchain?
Blockchain technology is, at its simplest, a distributed and immutable (write once and read only) record of digital events that is shared peer-to-peer between different parties.

In essence, the fundamental strengths of a blockchain system lie in its data integrity and networked immutability. One can break it down along four key sub-categories:

-Decentralized database i.e. distributed ledgers as shown in the above figure (frankly nothing new as this has been around since the 70’s)
-Cryptographic security (built on public-key infrastructure; reduce damage caused by data breach)
-Process Automation (e.g. smart contracts)
-Value transfer (can transfer digital values)

HOW and WHERE can blockchain technology be used in the healthcare space?
The concept of blockchain technology and systems is undoubtedly disruptive, but it will not act as a magic bullet to solve emerging business problems in the fast-changing and highly interconnected digital health ecosystem. Rather, it will be an evolutionary journey for blockchain-based healthcare systems or applications, where trust and governance within a blockchain network or consortium will be critical success factors for implementation. For blockchain to make a meaningful impact in the healthcare industry, there would need to be an industry-wide adoption or push by independent bodies such as The Hyperledger Foundation. Additionally, blockchain would not only need to solve viable business problems, but also do so with sizeable ROI for the organization.