

Are you fascinated by blockchain technologies, such as Bitcoin, and intrigued by their application to healthcare, but confused as to what those applications are? Have you been waiting for an article by a technical wizard that will explain it all perfectly?

If so, this is not that article.

What this article hopes to be, however, is an initial discussion by a health expert, rather than a computer expert, on the ways blockchain technology might transform healthcare—and do so much more quickly than you might imagine.

To see the speed of transformation, just look at the explosion in the number of Bitcoin transactions, from close to zero five years ago to now over a quarter of a million every day—and all this from a technology that didn’t exist before 2008.

So, what is blockchain?


At least, that’s what the original generation of blockchain provided.

Remarkable as it already is to have “only” a self-policing electronic record, blockchain technology has not rested on its electronic laurels. The second generation of blockchain adds functions beyond recordkeeping, and includes working code to affect operations once a record is processed. In this way, a blockchain ledger can become a self-effectuating instrument—a smart contract that takes action on the terms of the contract without requiring human intervention.

Let’s say I want to send you something and then require that you pay me for the service or product delivered. Blockchain technology enables me to send you a self-effectuating contract that delivers payment to me once the delivery of a product or service to you is verified.

The possibilities opened up by this kind of action and verified record are virtually limitless. In the legal system, blockchain provides a verified repository for multiple-signature contracts. In real estate, the archaic and costly process of paying agents to do title searches could be obviated by a verified blockchain—and then the even more expensive process of requiring attorneys to execute contracts could be replaced by a self-effectuating blockchain contract that automatically deposits funds once the title is transferred.

One of the last great bastions of labor-intensive human adjudication of transactions is in healthcare. Even after passage of the HITECH Act and other measures to encourage electronic records, the healthcare industry remains incredibly inefficient in processing transactions.  Estimates are that there are still over three billion transactions in healthcare processed manually. It is rightly considered to be a major sign of progress simply to submit these transactions electronically. According to CAQH, each instance of doing so would save healthcare providers $3—multiply that by three billion and you get serious money.

But even those savings are peanuts compared to what would be possible by replacing manual adjudication with blockchain smart contracts that handle not only submission of claims, but also their processing. Of course, the applications of blockchain to healthcare are hardly limited to claims. To take one of many examples, the Institute of Electrical and Electronics Engineers recently released a study showing how blockchain could transform pharmaceutical supply chains, not only by markedly increasing transaction efficiency but also by guarding against counterfeit medicines.

The potential for blockchain to transform healthcare is remarkable. Imagine a healthcare system where claims adjudication was done seamlessly and automatically; where a patient’s medical records were encrypted, fully verified and completely portable; where money flowed without the invisible healthcare tax imposed by system inefficiencies.




Photo: WPP Health and Wellness

Privacy Policy


View Privacy Policy