Exploration of Blockchain Applications in the Health sector
You might instinctively think of cryptocurrencies when the subject of blockchains comes up. However, blockchains aren't confined to supporting only digital currencies. They're now being utilized in various sectors, including healthcare. Here's what you need to know about the use of distributed ledger technology in healthcare and some of the companies spearheading this development.
Potentialities
Potential uses of blockchain in healthcare
The key aspect to consider when pondering the use of blockchains in healthcare is the array of opportunities. Several inherent advantages of distributed ledger technology, such as its cost-effectiveness, security, and transparency, provide substantial benefits when applied to the healthcare sector.
Perhaps the most significant use case of blockchain in healthcare is securing patient data. Most patient data is currently stored in isolated repositories that aren't connected to each other. For instance, your primary care physician might have access to some of your medical records, but specialists like cardiologists or OB-GYNs may not have the same access, and vice versa. Blockchain technology could help rectify this.
A blockchain-powered platform could potentially allow various healthcare providers to connect to existing electronic medical record (EMR) systems. Whenever new information is entered into these EMR systems, the data would be encrypted and stored in the blockchain. Other healthcare providers could access this information only with the patient's consent, and the entire process would be managed by the blockchain platform.
Another considerable opportunity for blockchain implementation in healthcare is supply chain management. Blockchain could enable customers to track items from their initial manufacturing to each stage of the supply chain. This would be particularly beneficial in verifying the authenticity of medicines, especially in ensuring patients don't receive counterfeit drugs.
Another potential use of blockchain in healthcare is streamlining contracts and payments with supply chain partners. Manufacturers, distributors, and healthcare providers could have shared digital contracts on a distributed blockchain ledger instead of separate versions of the contracts. Any price changes, which often occur in healthcare, could be updated for all parties simultaneously.
Other applications for blockchain technology in healthcare include provider credentialing, claims processing, clinical trial management, and public health surveillance.
Operation
How blockchain functions in healthcare
Blockchain applications in medical settings won't need to function differently than blockchains in any other sector. A blockchain is a shared record of transactions stored in a digital ledger. These transactions are immutable, which means they can't be changed or altered in any manner.
Importantly, there's no need for a central authority. No participant in the blockchain necessitates a pre-existing relationship with another. For instance, an insurer could access a patient's medical records stored in a hospital's EMR system (with the patient's consent), even if the insurer had never interacted with the hospital before. The primary requirement is that the insurer and hospital must be verified by the blockchain network.
Implementation
Companies utilizing blockchain in healthcare
Many companies utilizing blockchain in healthcare are small and not publicly traded. However, several technology-focused blockchain stock companies have developed solutions for the healthcare sector, and some healthcare companies are actively implementing blockchains. Here are four that are notable.
1. Accenture
Accenture (ACN -0.42%) is a global consulting firm. It was among 15 winners of a "blockchain challenge" sponsored by the Office of the National Coordinator for Health Information Technology and the National Institute of Standards and Technology. Accenture's proposal outlined a plan to improve patient outcomes and interoperability using blockchains integrated with existing technology systems.
The company worked with DHL (OTC:DPSGY) to build a blockchain system that tracks medications from the point of manufacturing to delivery to the consumer. This system could help reduce counterfeiting and improve emergency medication delivery.
2. Elevance Health
Elevance Health (ELV 0.8%), formerly known as Anthem, is one of the largest health insurance companies in the U.S. In 2019, the company and several partners teamed up to develop a blockchain healthcare network. Those efforts culminated in the formation of Avaneer Health in 2021.
Avaneer is creating blockchain solutions that help reduce inefficiencies in the U.S. healthcare system. Elevance became one of the first users of Avaneer's decentralized network for healthcare administration. Avaneer has received recognition for its efforts, including being ranked No. 2 in Healthcare Digital's top 10 healthcare blockchain platforms in 2024.
3. CVS Health
CVS Health (CVS -0.42%) is another company that helped establish Avaneer. Although CVS is most famous for its retail pharmacies, it also owns a leading pharmacy benefits manager and Aetna, one of the biggest health insurers in the U.S.
Aetna is also a key member of the Synaptic Health Alliance. The purpose of the alliance is to explore ways for blockchain technology to address significant challenges in the healthcare sector.
4. IBM
IBM (IBM -0.62%) has been a technology leader for over a century. It's also one of the top players in developing blockchain solutions for healthcare. IBM's blockchain technology is used to help organizations verify healthcare credentials.
IBM's Trust Your Supplier solution uses blockchain to enable customers to qualify, onboard, and manage suppliers quickly and securely. Its blockchain platform is also used for several other healthcare applications, including monitoring vaccine distribution. In 2024, Healthcare Digital ranked IBM No. 1 in its top 10 list of healthcare blockchain platforms.
Benefits & drawbacks
Advantages and obstacles of integrating blockchain in healthcare
The top advantages of blockchain in healthcare include:
- Protection: Altering blockchain networks is quite challenging.
- Economical: Transactions become less expensive due to the absence of intermediaries.
- Performance: Self-executing contracts create swifter transactions.
The major hurdles in employing blockchain within healthcare involve:
- Acceptance: The healthcare sector's acceptance of blockchain has been sluggish due to several reasons such as apprehension about lawsuits and blockchain being viewed as novel technology.
- Expansion capacity: Some healthcare organizations are anxious that blockchain structures may not expand adequately to suit their requirements.
- Vulnerability concerns: Although blockchains provide certain protection benefits, they also possess potential weaknesses that are particularly alarming in healthcare applications.
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Final Thoughts
The application of blockchain in healthcare is still in the embryonic stage. However, the prospective benefits are so substantial that it appears probable that blockchains will grow to become more common within the healthcare system in the forthcoming years.
Keith Speights has no stake in any of the mentioned shares. Our site holds investments in and recommends Accenture Plc. Our site proposes CVS Health and International Business Machines and recommends the following options: long January 2025 $290 calls on Accenture Plc and short January 2025 $310 calls on Accenture Plc. Our site has a disclosure policy.
The potential use of blockchain in investing financial assets, such as stocks, could leverage its advantages in transparency and security. For instance, a blockchain-based platform could provide a secure and transparent method for tracking the ownership and transfer of shares, reducing the need for intermediaries and reducing costs.
Furthermore, blockchain's ability to enhance data security could be instrumental in boosting consumer confidence in digital finance. It could potentially protect users from fraudulent activities, such as identity theft, by providing a secure, immutable record of transactions. This could encourage more individuals to participate in digital finance, thus increasing the market's potential growth.
