Whenever or wherever blockchain technology is mentioned, the word “bitcoin” is never too far away and considering its massive and commendable growth in merely a couple of months, why would it be? The relation of blockchain with bitcoin is simple. Blockchain is actually the underlying technology that powers Bitcoin transactions.  However, it would be misleading to say that the only industry blockchain is flourishing in is fintech. As a matter of fact, blockchains were created to revolutionize communication between networks.  And the healthcare industry is no exception.  Managing massive loads of data in the healthcare industry posed a problem for healthcare providers.  The lack of a unique patient identifier code system made it impossible to collect complete information on each patient.  Although electronic health records did convert paper data into digital format, the information was still not easily shared with other systems.  The blockchain is one of the revolutionary technologies of this century that not only makes information transparent but also immutable.

What is Blockchain Technology?

A blockchain is a growing list of records also known as blocks which are linked using cryptography.  Each block contains a cryptographic hash of the previous block, a timestamp, and it contains transaction data.  A blockchain does not allow its data to be altered.  It records transactions between two parties.  A peer to peer network adheres to an agreement for internode communication and validating new blocks.  Once a transaction is recorded, the data on each block cannot be changed without changing all of the following blocks.  For that you need approval from the majority of the network.  Blockchain was invented to function as a public transaction ledger of the cryptocurrency Bitcoin.  It is an open distributed ledger that records transactions in a verifiable and permanent manner.  It allows digital information to be distributed but not copied.  Blockchain is an incorruptible digital ledger of transactions that is programmed to record transactions.  A blockchain is a time stamped series of immutable record of data that is administered by a group of computers not owned by one entity.  Each block is secured and bound to each other using cryptographic principles(chain).  By nature, blockchain is transparent and everyone involved is accountable.  There is no transaction cost but an infrastructure cost does exist.  Information is passed from one network of computers to another in an automated and safe manner.  When one person creates a block, thousands, even millions of computers verify it.  The verified block is added to a chain which is stored across the internet.  It becomes a unique record with a unique history.  Falsifying a single record would mean falsifying the whole chain which is impossible. 

The blockchain technology has brought about a list of advantages with it.  Here are some of its main advantages:

Public Health

Using blockchain technology regulatory authorities create a shared stream of de-identified patient data.  This enables authorities to identify problems and address them.  There are distributed ledgers which are set up openly and can be viewed by any individual without permission.  This feature provides transparency and this benefits all stakeholders.  Private ledgers, on the other hand, can only be accessed by authorized users.  Firms using private ledgers want to take advantage of the privacy and security the Blockchain offers.

Data Security

Blockchain technology protects patient information smartly and prevents unauthorized access.  Health information is constantly logged and stored so it can be sent and accessed when required.  This data is sensitive and must be protected.  The HIPAA law ensures the privacy and security of this information.  Health information remains transparent yet maintains privacy.  The blockchain can transfer this data through a safe and decentralized process. 

Immutability of the ledger is the ability of the blockchain ledger to remain unaltered.  The blockchain ensures that the data has not been manipulated or falsified.  With the blockchain, firms can prove to stakeholders that the information presented is in its true form.  The blockchain will break if the data is tampered with.  Typical databases can be changed easily.  But data on a blockchain is cryptographically secure and virtually unhackable.

Patient Centered Data Sharing

Patients can control access to their own medical records.  They can also sell this information to data brokers directly.  Patient centred control of data enables patients to authorize someone else to access their records. 

Streamlined Claim Processing

The blockchain enhances organizational efficiencies through mechanization.  It simplifies record keeping, contract management, payment processing, claims registration and closure.  This reduces administrative expenses.  Blockchain technology simplifies the medical billing processes.  This is done by getting rid of a series of validations and third parties.

Patient Generated Data

Blockchain enables patients to access their own health data.  HIPAA mandates that covered entities allow individuals this access.  Patients secure better electronic access to medical data.  Patients can not only retrieve their data but share it with other institutions as well.  They can upload and store their own patient data without disturbing other records.

Despite its many advantages, blockchain comes with its own set of challenges.  Let’s take a look at the challenges that blockchain technology faces.


Because the blockchain concept it still new and only a few successful models exist, uncertainty prevails.  The barriers to blockchain include regulatory uncertainty, lack of user trust and a lack of trust in the blockchain’s speed, reliability, security and scalability.  Standardization does not exist.   Also, there is a lack of awareness of what blockchains actually are.


Blockchain in the health industry contains medical records, images, documents and lab reports which require storage space. Where will all this data be stored?  There is a huge reliance on cloud storage for data but it tends to be unreliable, expensive and unsafe.  As artificial intelligence grows, it will generate much more data than humans can.  If data is to be stored on the blockchain, issues like scalability and cost have to be figured out.

Data Ownership

Is data on a blockchain considered property?  Individual pieces of information do not have property rights.  But compiled data, such as databases, can be protected by intellectual property rights.  The blockchain is a decentralized database.  Users who save information on the blockchain can gain access to it through encryption keys.  This is independent of the application that generated it.  No on owns the blockchain technology.  Organizations own individual blockchains.  So, these digital ledgers lack a central control point. 


The cost of setting up and maintaining a healthcare blockchain is still unknown.   The technology is still relatively immature.  It still struggles to handle huge transactions.  Building a blockchain isn’t easy and costs money.  Firms have to decide if the return is worth it on investment costs.  Only industry giants can spend millions to test these technologies. 

Rules and Regulations

The rules on how to use blockchain in healthcare have yet to be established.  How will blockchain policies conform to existing privacy regulations?  Jurisdictional issues are complex.  An appropriate governing law must be defined.  The rules may be difficult to apply in a decentralized environment.  What law is supposed to be applied to determine the rights and responsibilities of the parties in an agreement?  What courts will handle the disputes?

Although people wonder if blockchain technology can integrate with the current healthcare system, its technology is still valued in healthcare.

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