Type the word ‘Blockchain’ into Google and there you have it: 124 million results in 0.42 seconds.
This hype train was originally created by Bitcoin – the most famous application of Blockchain in cryptocurrency. Now, most leaders believe that Blockchain will be the most influential force in the transformation of industries practice as we know it. In fact, at the 2016 MedCity Converge conference, Nishan Kulatilaka – Merck associate director for applied technology, noted:
“Healthcare could be the second-largest sector to adopt the Blockchain technology, after financial services.”
Of course, to be ‘the adoption leader’ of the next big technological advancement means that your business will capture most of the market pie, and that means profit.
However, Blockchain is an immature technology. There is no written recipe for success. So, conducting unstructured experiments with Blockchain solutions without a clear goal and a feasibility evaluation process, your company won’t likely to see any substantial return.
In this article, Savvycom Insight would like to help you understand: What is Blockchain? How will it play out in the Healthcare industry? What difficulties to look for? And if you decided to face those challenges, which strategy you can apply?
Table of Contents
1. Understanding Blockchain
1.1. The general definition:
Many of us know about ‘blockchain’ as this magical data storing mechanism where nothing can be lost, nothing can be hacked, and nothing can be wrong.
Well, we are close. Just not there yet.
So, what is Blockchain? Technically speaking, Blockchain is ‘a database, shared across a public or private computing network’. But simplistically speaking, imagen a series of blocks that link together in a chain. The chain is the network. Each block stands for a computer in that network. They also have ‘hash’ – their digital fingerprint. Every data transfer from one block to another is attached with the hash of the sender.
Now, the main thing that differencing Blockchain from a traditional database is the set of rules applied in the process of putting data into the database. Every piece of information, once uploaded, will be validated by a list of consensus protocol. Then, it will be mathematically encrypted, attached with the hash and added as a new ‘block’ to the ‘chain’. This creates a continuous chronical record and hence, displays the selling points of Blockchain.
First, the new data cannot be in conflict with another existing data in the historical record. Secondary, data can only be added, not remove or change. Thirdly, the data is attached with a hash – which always points to the owner and past owners in the chain. And lastly, it is decentralized. No single authority will be able to take away an asset and change “history” to suit their need. That is unless an authority can control 50% of the network-computing power and rewrite all previous transactions.
1.2. Types of Blockchain:
There are four types of Blockchain, divided by 4 blockchain – architecture options: Private vs Public; Permissionless vs Permissioned. Generally speaking, the Permissioned-Private option carries the highest possibility to be commercialized due to its nature of high security and lower capital investment.
2. Applications of Blockchain in Healthcare:
2.1 The opportunities:
Base on the advantages mentioned, Blockchain should not be applied only in cryptocurrency. This technology now has great powers and therefore, great responsibilities in the development of modern civilization.
According to McKinsey, in a bird-eye view, Blockchain can help in 2 manners:
a) Record keeping: Storage of static information
b) Transaction: Registry of tradeable information
In application to the healthcare industry, Blockchain can either revolutionize or at least improve the ways things are being handled, which in turns creates substantial values for both the business and the people.
We have come up with several examples for the potential application of Blockchain in Healthcare:
- Electronic health record: One’s electronic health record contained not only the health-related data but also citizen ID, personal description, and payment address. Hence, it is an ideal target for identity theft. In fact, just 4 days ago, 1.5 million health records of the Singapore citizens got hacked and stolen – including Prime Minister Lee Hsien Loong.
To prevent this situation, Blockchain in healthcare can monitor the accounts that gain access to the data in real time, making sure that every suspicious action is noticed and alarmed as soon as possible. In addition, blockchain can also give patients the ability to set different privacy settings on their medical information by breaking down records into components and granting access piece by piece. This will help to reduce the risk of over-privileging any potential recipient and enhance administrative efficiency.
- Healthcare research: While most Blockchain in healthcare is safer to be built on a private server for the sake of security, healthcare research is likely to yield a higher level of social value with the public server. On one hand, using Blockchain, a clinical trial researcher or investigator could search candidates based on specific genetic, demographic, and geographic criteria without even knowing the patient’s name. On the other, by applying the rules of smart contract, patients could even charge pharmaceutical companies to access or use their data in drug research.
- Health Tracking: When combining Blockchain technology with IoT and medical devices, information about the wearer could be stored in a shared ledger accessible by other systems to automate maintenance and management of the wearer’s information. This is practically useful for people with chronic illness on are under end-of-life care.
- Payments infrastructure: The current payment infrastructure is mostly based on relies on file exchange between multiple parties which lead to a longer time to process and larger probability for error. With the power of blockchain, all parties in a financial trade can be connected – allowing faster processing while still ensure the audit trail. It is also impossible to manipulate data, hence limit security breach. Buyers of pharmaceutical will no longer need to depend on bank statements to reconcile their accounting ledgers.
- Drug supply chain: There is in-built vulnerabilities in the drug supply chain at many points on their way to patients, and pharma manufacturers and other stakeholders have little visibility to track the authenticity of products. Blockchain could provide significant benefits here, with barcode-tagged drugs scanned and entered into secure digital blocks whenever they change hands. This ongoing real-time record could be viewed anytime by authorized parties and even patients at the far end of the supply chain. Blockchain in healthcare can also be combined with IoT sensors to ensure the integrity of the cold chain for drugs, blood, and organs.
- Healthcare insurance: The healthcare insurance industry suffers from some major bad reputations, with one of the most prominent complain lies around insurance claims stagnant. With blockchain, organizations can speed up this process by having records posted to a private blockchain, reducing the need for transmitting the data from one host to another.
2.2 The difficulties:
The organization leaders always need to be a rational dreamer. So, as we have presented the good side of Blockchain in healthcare, here is the not-so-fun side: Blockchain is still more than five years away from feasibility at scale. Here’s why:
Based on the McKinsey’s model, there are four key factors that determine the level of the feasibility of Blockchain in Healthcare: asset, technology, the standard of regulations, and the ecosystem. Applying this 4 factors in the Healthcare industry for evaluation:
- Asset – Medium feasibility: Asset type determines the feasibility of improving record keeping or transacting via blockchain. Most will need to be digitization. With assets like healthcare record, which are digitally recorded and exchanged healthcare enterprises, can be simply managed end to end on a blockchain system. However, connecting and securing physical goods to a blockchain – for example, at-home health tracking devices – requires enabling technologies like IoT and biometrics. This connection can be a vulnerability in the security because while the blockchain record might be immutable, the physical item or IoT sensor can still be tampered with.
- Technology – Low feasibility: The immaturity of blockchain technology is a limitation to its current viability across any industries. Applying this kind of technology definitely demands a strong series of computer, high 24/7 energy consumption and fast connection speed. With healthcare enterprise which tends to run on an “off chain” database, the switching costs are high. In fact, most cost benefits will not be realized until old systems are decommissioned. Organizations also need a trusted solution provider. Currently, few start-ups have sufficient credibility and technology stability for government or industry deployment at scale.
- Standard of regulations – Low feasibility: The lack of common standards and clear regulations is a major limitation on blockchain applications. With healthcare, since medical data is a sensitive information with a high level of concern, regulations are of course stricter than most industries. For example, in the United States of America, HIPAA rules have multiple subchapters and healthcare entities are going to have to master them all for blockchain.
- The co-opetition paradox – Low feasibility: Blockchain’s biggest advantage lies in the network effect, but that advantages will be limited by the coordination complexity. To apply Blockchain in Healthcare, natural competitors need to cooperate, making sure that their data is correct, transferable and adaptable to the others system. The issue is agreeing on the governance decisions. Overcoming this issue often requires a credible sponsor, such as a regulator or industry body, to take the lead.
3. Pieces of Advice with Blockchain in Healthcare
To sum up. there are a plethora of use cases for Blockchain in healthcare, so, companies will definitely face some difficult tasks when deciding which opportunities to pursue. We want to help, and therefore, would love to provide you with a very general but useful step-by-step process:
Step 1: Investigating the true “pain points” — the frictions for customer experiences that blockchain could eliminate.
Step 2: Extensively analyzing the potential commercial value within the constraints of the overall feasibility of the blockchain solution. Considering the overall industry characteristics and regulation as well as a company’s expertise and capabilities.
Step 3: Brainstorming the company’s optimal strategic approach to Blockchain. This step will fundamentally be defined by two market factors:
1. Market dominance – the ability of a player to influence the key parties of a use case.
2. Standardization and regulatory barriers – the requirement for regulatory approvals or coordination on standards.
Savvycom has been a long time friend of the healthcare industry, considered our contribution in many projects such as Jio Health and Eva Diary. Recently, we also played a part in the creation of Consentium – the first blockchain-based crypto wallet and community app that reward for user engagement.
Now, our talented developers are looking for a chance to combine our knowledge in the healthcare applications and Blockchain technology to support SME that are particularly interested in being one of the pioneers in this industry revolutionary movement.
If you have any request for further information regarding our services, do not hesitate and send us a quick email here.