Blockchain in Healthcare: the Good, the Bad and the Ugly

Blockchain technologies are often discussed as part of various fintech ecosystems (and rightfully so given they originated through Bitcoin). However there are potential applications in other industry verticals: healthcare being one of them.

Because healthcare is an important aspect of everybody’s life, billions of transactions and records (if not more) are generated every year around the world. Blockchains would make sense in more than one way but their implementation would also come with various challenges.

The good: secure payments and patient records, reduced fraud

The primary benefit of a “healthcare blockchain” that comes to mind would be the integrity of monetary transactions. Payments processed by various individuals within the ecosystem (hospitals, insurance companies, etc …) would be secured from tampering and revision. In my opinion, such is a strong argument given fraud has been a major concern in the industry. For example, the FBI estimates that healthcare fraud amounts to$80 billion a year in the US alone. A blockchain would provide a transparent framework that could facilitate audits.

A second benefit would be enhanced privacy for patients. Cryptography is a concept that is widely associated with blockchain technologies. Such could provide a layer of security when it comes to protecting patient records. One has to be aware that many healthcare records are inadvertently exposed or even worse lost on a regular basis. To put this in perspective: the National Health Service (NHS), the publicly funded healthcare system for England, loses about 2,000 patient records … everyday; many of those still being paper-based.

The bad: not the most progressive industry

As you probably already know, healthcare is far from being a progressive industry, with governments having a tight grip on how things get done (and how fast). In the US, the Health Insurance Portability and Accountability Act (HIPAA) which was implemented in 1996 made difficult for software vendors in the records and document management space to increase their market share. In the nutshell, HIPAA focuses on 2 main concepts: “procedures for the exercise of individual health information privacy rights”; and “the use and disclosure of individual health information should be authorized or required”. HIPAA compliance is a long and thorough process which includes many steps; hence it wasn’t until recently that Google Docs and Dropbox were deemed compliant for document management purposes in that given space. Such has created is an over-reliance on paper-based records management, which comes with many obvious disadvantages (can be easily tempered or lost among other things).

When it comes to blockchain and healthcare, the reality is that a possible implementation will require many governmental and intergovernmental consultations, legal amendments and case studies of successful applications beyond the traditional financial environment.

The ugly: many stakeholders to handle

Not to state the obvious: many different stakeholders are involved in the healthcare space: insurance companies; care providers such as doctor offices, hospitals; pharmacies and the list goes on. That’s a lot of different entities that would have to “buy in” and agree to use a blockchain system.

This potential issue would be amplified in nations with a strong federal system. Canada is a good example: the Canada Health Act specifies “the conditions and criteria with which the provincial and territorial health insurance programs must conform in order to receive federal transfer payments under the Canada Health Transfer”; such explicitly states that each province and territory manages their respective day-to-day healthcare administration. This regional autonomy could make the adoption of healthcare blockchain technologies rather complicated. Should one create a permissioned blockchain for each regional entity? Or should the federal government adopt a centralized blockchain for all Canadians? These are very complex interoperability aspects to discuss.

Beyond regional autonomy, international interoperability among different nations is another fact to take into account. Consider the American citizen receiving treatment in Sweden. That’s an even more complex matter.

The future of blockchain in the healthcare sector is promising. However, it will require the cooperation of government, private enterprise, vendors and other entities. It could be a bumpy road.

This article was originally published on



Founder of Nuadox | Tech & Innovation Commentator | Digital Strategist | MTL | More about me>

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Phil Siarri

Founder of Nuadox | Tech & Innovation Commentator | Digital Strategist | MTL | More about me>