Blockchain in the Healthcare Industry

Elizabeth Wright
| Editor:
April 19, 2023
7 min read

The blockchain technology became popular because of Bitcoin. However, up to now, it has been spreading all around the world because of the ability to be applied to many spheres. One of them is healthcare.

In this article, we will consider problems of the medical industry that can be solved by blockchain-based systems, real cases of blockchain usage in the health industry, and prospects of it.

Blockchain technology

To begin with, let’s determine what blockchain is. Merely saying, blockchain is a series of unchangeable records of data (blocks) that are bounded to each other creating a chain. The blockchain is managed by many computers not related to any single unit.

For instance, if someone wants to pass money, information, or whatever else (i.e. data), he/she creates a block. The block is distributed among thousands of computers around the net that verify it. After, the verified block is added to a chain. The chain Is refilled by the blocks created any time there is additional data. All blocks are bound to each other using cryptography. The chain is saved across the net, creating a unique record with a unique history.

The blockchain system has many pros that can be highly useful for the medical industry.

Blockchain advantages for the health industry

1. The significant advantage of blockchain is transparency. Firstly, no one is able to change any record within the blockchain. Trying to change a file, the party will have to change it in the entire chain saved at million computers. That is impossible. Secondly, anyone can track the data. If any change to a chain happens, all nodes get information about that.

2. Another one is the decentralization of the blockchain system. There is no single owner of the data. It is spread among many computers that don’t relate to a single unit.

3. Smart contracts on a blockchain can reduce the expenses of healthcare providers. The contracts are fulfilled automatically when specific requirements are met, reducing administrative costs.

All these may successfully solve problems in the health industry. So, it is time to get a closer look at those problems and the role of the blockchain.

Blockchain and the healthcare industry

Although the medical industry has been improving, there are pitfalls that stop this improvement.

· The first problem is interoperability that includes two points: lack of patient identifier and information blocking.

If we talk about the unique patient identifier, we may say that the problem is highly important. It relates to the fact that sometimes there is a mismatch between a patient and his/her health records. The issue happens not only while transferring information between systems but within one system as well. Such errors lead to corrupt data that may become a cause of patient harm.

As for information blocking, the problem is based on the unreasonable restriction on the exchange of patient data or medical information. It’s doubtless the exchange of data is crucial for a patient. Mistakes or lack of data may lead to delays in medical assisting. Also, decentralized and free access is profitable not only for medical providers and patients but also for the patient’s relatives. Do you remember a doctor asking you if someone in your family had that kind of disease? Could you answer the question surely? We suppose you couldn’t. Imagine your relatives’ records are kept in one system, and you have access to them, it’s a significant advantage.

How blockchain could solve the problem

– The patient identifier could be supported by the cryptographic hash function.

“Hashing is a taking an input string of any length and giving out an output of a fixed length”. (Source: It helps to avoid remembering the big amount of data replacing it with a fixed-length hash.

That means each patient could be uniquely identified by his/her hash ID. It would provide user privacy and a more precise match between the client and data.

– The information blocking can be avoided by the main advantage of the blockchain system – transparency. No one will be able to block or tamper the information stored in the chain. As it was said above, if a party wants to change any record in the block, it will have to change the data in each block stored on multiple computers, that is highly complicated.

· The second problem is the secure supply chain. Here we are talking about stolen pharma drugs and counterfeit drugs. Both cost companies and patients a lot.

How blockchain could solve the problem

The transparency of the blockchain system would allow tracking drugs to their point of origin, determining if a medical prescription is changed in any way, enabling customers to see the lifecycle of the medicine.

· The third problem is insurance fraud. The fraud happens when patients provide false information to get higher benefits.

How blockchain could solve the problem

Again, we are talking about transparency. If the data were verified, stored, and accessible for health insurance companies, the amount of fraud and money loss would decline significantly.

· The fourth problem is the lack of control. Not only patients may provide incorrect data, but companies also can. Accounting reports may include patient care costs exceeding real ones.

How blockchain could solve the problem

Transparency, transparency, and, again, transparency. All records are stored on a blockchain that makes falsification almost impossible.

· The fifth problem is data theft. When your private data is kept in any database or on paper, there is a risk data will fall into the hands of third parties.

How blockchain could solve the problem

In the blockchain framework, a patient can control how the data is used. Now you may be confused with the point of transparency. No one would want the private data to be freely accessible by anyone. This issue is solved by private blockchain. We will not talk about it a lot. The only thing you need to know is that access to the data is given by permission.

Although the blockchain technology is supposed to give benefit to the healthcare industry, some experts see pitfalls.

Difficulties in introducing blockchain technology

According to some blockchain experts, the technology is not able to store massive amounts of data. At the same time, the system has slow transaction performance that may slow down access to the required information.

Despite such statements, blockchain has been implementing in different healthcare processes. Take a look at real examples.

How blockchain is changing the industry: 10 real cases

Patient data management

As we noticed above, one of the major problems of the current healthcare system is the lack of access to patient medical records.

MIT Media Lab and Robert Wood Johnson Foundation found a solution. MedRec is a system based on the Ethereum blockchain. All patients’ data are stored in one place providing free access to the medical history for both patients and doctors. However, free access doesn’t mean everyone can check the records. Patients have the right to decide who will be able to get their private data.

Increase of transparency

Transparency is key to the advanced healthcare system. The Taipei Medical University Hospital and Digital Treasury Corporation invented the system that puts the patient’s medical information, including images and the patient’s condition on a blockchain. The data is available through a mobile app. The security issue is solved by Decentralized Ledger Technology.

Counterfeit drugs

It’s not a secret that thousands of people die because of fake medical drugs. To decrease this number, FarmaTrust implemented a blockchain system consisting of four sections.

1. Regulatory Compliance provides pharmaceutical companies with regulatory guidance on how to produce and deliver medical supplies. 2. Track and Trace help to track inventory pass. 3. Supply Chain Visibility depicts when the pharmaceutical drug is changed in any way. Consumer Confidence App enables customers to see the lifecycle of a medicine.

Electronic health records

The problem is in the standardization of patient’s health records provided by different companies. It’s clear that there is no standard of the Electronic Health Records (EHR) system. It may lead to mistakes in records transmitting from one company to another.

That’s why the MTBC company invented Hyperledger – the blockchain technology that offers a single place for storing all medical information. It links directly to the company’s Electronic Health Records. Each patient is able to access their Personal Health Records through a computer or smartphone. At the same time, patients can grant anyone access to medical records. In this case, the EHR system of the company will not be important. When the physician with the approved access adds information to the blockchain, it’s copied to the EHR in real-time. As a result, the data are always up-to-date and secure.

Relief services

Natural disasters require relief services to work fast and efficiently. However, the centralized systems distributed between different agencies complicate logistics tracking. As a result, there are issues in relief services collaboration.

US Department of Defense and US Defense Logistics Agency worked on a blockchain-based system that stores the data available for adding and tracking through a ledger. It provides vital information on multiple agencies’ relief efforts that helps to save lives and money.


If we talk about the blockchain system that became popular because of Bitcoin, it’s not surprising that tokenization took place in healthcare improvement.

Besides the full access to personal health data, MedicalChain company provides any-time video consultations with doctors and enables clients to pay for services using cryptocurrencies.

Healthcare transactions

It’s always important to gain client’s loyalty. Change Healthcare created a system that is supposed to feature claims and revenue management. The system supports the real-time tracking of the status of requests submission and remittance, perfects collection of payments made by patients, minimizes denials and underpayments, controls daily revenue cycles, and business operations.

Medical credentials

As we started talking about the client-centric systems, it’s worth thinking about doctors. Doctors are one of the blocks in the big chain of patient loyalty. So, the Hashed Health company decided to provide clients with information on doctor professionalism. With Professional Credentials Exchange, anyone can verify the credentials of any doctor. The system is used not only by patients but while hiring doctors.


Have you ever thought that blockchain can be used not only for practical things but for science?

The EncrypGen Gene-Chain eased the way of searching, sharing, storage, and buying genetic information. To prevent any unsafe actions, the purchase is possible only with safe, traceable DNA tokens.

Blockchain and government

Any country is interested in the improvement of the state industries. Guardtime is ready to help. The company helps healthcare companies and governments to include blockchain into their cybersecurity methods. For example, blockchain technology is used in Estonia’s healthcare systems, and Guardtime helped in that.


As we can see, blockchain technology definitely is a highly useful system that is supposed to improve the healthcare industry. The perspective of blockchain depends not only on technology capabilities. The implementation will likely be affected by the willingness of the organization to adopt it. Although technology is already used in many cases, there is a way to spread more.

Decentralized patient data, control under counterfeit drugs, tokenization of the healthcare industry, transmitted medical information are blockchain development priorities in the future.


To conclude, we can say that the blockchain technology is supposed to keep growing due to the significant number of advantages it can bring to the healthcare sphere. The implementation of blockchain will solve many issues regarding transparency, decentralization, and client orientation of the medical industry.

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