What is Blockchain?
In simplest terms, a blockchain is a distributed, tamper-proof ledger that continuously stores and records digital transactions. Rather than controlled by a central entity (i.e. banks, governments), this ledger is distributed and visible to all parties in the network, where each new record inputted on the blockchain can only be added based on synchronous agreement of the parties maintaining the database. In addition, when storing data in a blockchain, cryptography is used for encrypting the contents of each transaction which can only be opened by intended users. This secures the sender’s identity and ensures past records cannot be manipulated.
Although originally created as the underlying technology that drives Bitcoin, the fundamental basis of blockchain is becoming eye-opening to industries such as finance, manufacturing and healthcare as a solution to managing and transferring large data sets.
Blockchain and the Healthcare Industry
The healthcare system is entrenched with many inefficiencies. One example is patients and healthcare providers are separated by a labyrinth of relationships between jurisdictions, professional services, specialists and other providers. Most of the digital processes used today are designed for the logistics of handling paper documents, where data is often duplicated, and several paper trails exist per doctor-patient or patient-provider interaction. This inefficient way of working ultimately leads to increased costs and suboptimal care which negatively affects all stakeholders (i.e. healthcare providers, insurers, drug companies and patients).
The introduction of blockchain to healthcare aims to solve these problems through the implementation of new principles: collaboration, openness and integrity. In fact, last year IBM Watson partnered with both the FDA and the CDC to develop blockchain solutions in hopes to redefine the healthcare industry. As such, the application of blockchain to the healthcare industry could significantly impact the following:
Health records will no longer need to be stored by health organizations, but can be controlled by individuals and distributed in real time to trusted parties
Information silos will be removed as there will be a free flow of information between the multiple trusted stakeholders and all healthcare providers will have one reconciled version of the data
Information will no longer need to be manually transferred, but rather, will be automatically distributed to the predetermined trusted parties after specific conditions have been met
Although we remain in the infancy stages of this technology, the integration of blockchain could revolutionize the healthcare industry. Overall, this would result in improved patient quality of care, reduced costs to store and reconcile patient information, improved visibility and trust between physicians and patients, and reduction in fraudulent transactions.