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The Blockchain: The First Steps Toward its Healthcare Transformation

What is the blockchain?

According to a recent Forbes article: the blockchain is one of the most misunderstood technologies of 2017 (1). While most healthcare professionals have heard the term “blockchain” and are aware of the innovations in financial technology, few understand the fundamental principles behind the technology in order to speculate the impacts it will have on the healthcare industry, at hospitals, and for patients. This inability is common across sectors and can be attributed to the absence of any standard definition of blockchain technology. However, it is important that industry leaders have a firm basis for understanding it in order to foresee its impacts on their business. What follows is a list of key points for understanding the blockchain and enabling speculation on its impacts in healthcare:

  1. There are many blockchains.

The first thing to understand is that even though a definite article is most often used: “the” blockchain, there are in fact several different blockchains around the world. The technology behind blockchain — the Internet, private key cryptography, and protocol governing incentivisation — is not new, but their unique combination has created new, emergent properties that make the blockchain cutting edge.

  1. A blockchain is a big ledger

Any blockchain is, simply, a shared ledger of transactions. Any transaction can be written from sources all over the world into a block, which is linked to the previous blocks by cryptographic hashes. By connecting each to its predecessor, immutable data storage can be achieved.

  1. Decentralised networks are the backbone of blockchain technology

What makes the ledger of transactions provided by a blockchain so special is that it is not stored on centralised servers, like a database on a website. Instead, it uses a peer-to-peer network to synchronise each piece of data written into the block. While control of centralised databases rests with their owners, a distributed network eliminates the need for an overseeing authority: when transactions are broadcast into the blockchain’s shared ledger, every node in the network is creating their own updated version of the record. Authentication, vital to digital transactions, can be established by nature of the network validating the transactions.

  1. Blockchain technology can improve processes where a trustworthy system of record is required.

With authentication and authorisation established through a decentralised network, blockchain technology has real agency to improve any process that requires a trustworthy system of record because it eliminates the need for a trusted third party to oversee it. The blockchain can trigger transactions, decisions, processes, and executable actions through smart contracts. Like transaction data written to the blockchain, once the code of the smart contracts enacting the desired actions is deployed, it cannot be modified.

Blockchain and healthcare in the future

The imaginations of healthcare professionals will certainly be ignited when they understand that blockchain’s transformative potential lies in its ability to create trust between interacting parties and automate processes with an authenticated and authorised system of record. Fintech applications are only the tip of the iceberg; the health sector especially can benefit from blockchain’s ability to decentralise business models and provide a more secure and reliable way to exchange data.

In a recent report, Deloitte identified that: “Blockchain technology has the potential to transform health care, placing the patient at the center of the health care ecosystem and increasing the security, privacy, and interoperability of health data.” (2) While blockchain technology will not solve all of the emerging business problems in the fast-changing and highly interconnected digital health ecosystem, it will be an evolutionary journey for healthcare systems or applications, where establishing trust and governance will be critical success factors for implementation. (1)

An increasingly popular idea is that blockchain technology will eventually reduce the liability and accuracy concerns related to the exchange of medical data, by providing built-in levels of cryptographic security to protect patient identity. In a recent Wired article John Halamka, CIO at the Beth Israel Deaconess Medical Center in Boston, explained that blockchain technology presents a big opportunity for streamlining the data from a patient’s Electronic Health Records (EHR), making blockchain incredibly appealing to the doctors and hospitals that need secure access to a patient’s entire health history. (3) Halamka has been responsible for health care data standards in the US under the Bush and Obama administration; he predicts a blockchain-underwritten future where all of a patient’s health care interactions will go into a ledger that all providers could see. “The EHR may be very different, coming from a variety of sources, but the ledger itself is standardised.” (3) A number of researchers, start-ups, and projects have been initiated to building upon this idea, pioneering advancements in healthcare data management, security, and IoT technology in medical devices.

Medrec: creating a decentralised content-management system for healthcare data, across providers

Initiated by researchers at the MIT Media Lab, Medrec is currently in its pilot stages. The blockchain application governs medical record access while providing means for auditability and data sharing. A modular design integrates with local data storage solutions, enabling interoperability. (4) The pilot project tracked six months of inpatient and outpatient medication data, recording blood work, vaccinations, prescriptions, and therapeutic treatments. It simulated a data exchange between two institutions with incredibly positive results. Further pilots are planned with larger networks and hospitals. (3)

Patientory: empowers patients, clinicians and healthcare organizations to safely access, store and transfer information

Patientory was born in the aftermath of the WannaCry ransomware attack in 2017.

The ransomware affected 47 NHS Trusts in the UK, resulting in canceled operations and patients being turned away in emergency rooms. (6) Patientory’s technology encrypts patient data and interconnects with any EHR system, allowing doctors, care providers, and patients to communicate on a single platform. (7)

IBM Watson Health Artificial Intelligence: exploring the exchange of patient-level data from mobile devices, wearables, and the “Internet of Things.”

IBM’s Watson Health artificial intelligence unit has signed a two-year joint-development agreement with the US FDA to explore blockchain technology to securely share patient data for medical research (8). IBM and the FDA have agreed to explore the exchange of patient-level data between several sources including from mobile devices and wearables. Research has found that using patient data with machine-learning algorithms can drastically improve both the cost and quality of healthcare through simulation modeling. Patient data from mobile devices, wearables and other connected devices, for example, can help doctors and caregivers better manage population health, according to IBM. (8)

What are the first steps? How will blockchain influence healthcare now?

Storing patient data is a controversial topic because many in the healthcare industry believe only doctors should control such confidential information in order to ensure proper care. Regardless of the technological opportunities, the complex regulations, security measures, protocols, and best practices around patient data will not be overhauled in the very short term. However, many advocates of the technology predict that the blockchain application ready for immediate adoption in healthcare, true for most industries, is within its supply chain. (9) Supply chain applications for blockchain technology involve IoT (Internet of Things) sensors that can track certain conditions and smart contracts that automate processes between necessary parties. There are a handful of companies in Europe, North America, and China that have taken on supply chain applications for blockchain. Some focus on security measures, aiming to prevent counterfeit or falsification within the supply chains of sensitive materials, while others focus on provenance and adding transparency to the origin of products. AG, a company based in Zurich, is focused on the healthcare field as the first use case for its blockchain application in supply chain logistics. is working on providing a solution for pharmaceutical distributors to meet the recent changes to regulations for the Good Distribution Practice of medicinal products for human use (GDP 2013/C 343/01). Chapter Nine requires proof that shipped medicines have not been exposed to conditions, particularly temperatures, that may compromise their quality: “It is the responsibility of the supplying distributor to ensure that temperature conditions are maintained within acceptable limits during transport” (10) The modum system uses pharma qualified IoT sensors that can be configured for specific temperature ranges for each product they distribute. Recorded temperatures are stored in a blockchain back-end that can ensure an immutable and auditable record for regulatory purposes. The system provides a method for attaining GDP compliance but has also added a lot of value for pharma distributors in terms of data with which they can improve logistics processes, as well as the possibility for automation of payment, product release, or return of product via smart contracts. will go to market with its supply chain solution for pharma distributors in 2018.  It is a competitive solution in a demanding marketplace. And yet, how the novel blockchain technology will be embraced by the industry at large remains to be seen. Healthcare professionals in other functions will soon be able to look to their pharmaceutical deliveries for an early glimpse of the technology’s application. With an informed knowledge base, they will also be able to evaluate the technology’s staying power in their industry.

Michael Taylor is the director of marketing and communications at He has studied at the Copenhagen Business School and the Architectural Association in London. He has worked as a strategic consultant for major corporations in North America and Europe.

To find out more about blockchain for pharma, and MedTech logistics, watch Stefan Weber, Chief Operating Officer at, speak at the Blockchain in Healthcare Congress. Read the full agenda here


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