3 Ways Blockchain Can Transform the Healthcare Industry
The blockchain technology is still in its infancy, but it may soon be solving age-old challenges in many sectors including healthcare.
Blockchain came into being when Bitcoin entered the scene in 2008 but really gained notoriety when the cryptocurrency’s price started increasing steadily over the years. It exploded at the end of 2017, and stayed high for some time, birthing instant millionaires under wraps. Even those who did not possess a single Bitcoin became curious about cryptocurrencies and the technology behind it.
The early pundits saw the potential in the technology that led to an upgrade, Blockchain 2.0, where its use expanded beyond cryptocurrencies to industries such as real estate, ride sharing, supply chain management and more.
But many wondered and still wonder today, how this is possible. How can this obscure little tech be applied in completely unrelated areas?
We are sure there are a lot of detailed technical descriptions on blockchain elsewhere online so we won’t be exploring that here. We will however provide a brief overview of what it is and a description of smart contracts as together, they can create magic in a variety of industries.
Blockchain is essentially a growing block of data or transactions that are linked using cryptography. It is often referred to as a distributed ledger because anyone on the network can see everyone else’s entries in near real-time. It is decentralized and once an entry is made, is almost impossible to alter or forge.
Smart contracts are codes that are stored on a blockchain to automatically execute an action when a set of predetermined terms and conditions are met.
Perhaps you can already imagine how it might reduce the need for middlemen, lawyers, notaries and such, although it might still be a little vague. In the following section, we will explore three specific ways blockchain technology can improve the healthcare industry in areas industry players have traditionally struggled in.
How Blockchain Can Improve Healthcare
1. Weed out counterfeit drugs
The World Health Organization (WHO) reports that at least 1 in 10 (10%) medications produced in low and middle income countries is either substandard or falsified.
WHO also reported that one modelling exercise by the University of Edinburgh based on the 10% rate, estimated that 72 000 to 169 000 children may be dying each year from pneumonia due to bad antibiotics. Another modelling exercise estimated that approximately 116 000 additional deaths from malaria could be caused every year by poor antimalarial drugs in sub-Saharan Africa.
The challenges in this situation are two-fold. The first is a lack of technical abilities or governance in enforcing quality standards in manufacturing, supply and distribution. The second is, fraudsters often manufacture and print packaging in different countries and then ship parts to another location where they are assembled and distributed.
Even legitimate pharmaceutical companies rely on several different suppliers for the ingredients of a single drug, for example. Big pharma players in much of the developed world typically have stringent evaluation procedures prior to onboarding suppliers but there’s never been 100% transparency which is an ongoing battle.
Every medical supply chain and manufacturing goes through a lengthy process involving different personnel, companies, technological devices, systems and geographic locations, making data retrieval painfully cumbersome.
By transferring and storing supply data of a medication in a blockchain, every last detail of the medication is transparent to end users, doctors, manufacturers, procurement officers, suppliers and everyone else within the network.
Smart contracts can further bind everyone involved in transactional and operational matters starting from procurement of supplies until delivery of finished product to the final destination.
2. Improve medical research
Before a new medicine can be released to the market, it has to be tested in a clinical trial to identify the effectiveness, risk groups, tolerance level and risks related to the medicine. This is a process that usually involves hundreds of volunteers, spanning over months, sometimes even years.
Imagine the amount of data that are collected, transferred and analyzed during this time without the scrutiny of an independent party. According to WHO, approximately 50% of clinical trials go unreported often because the results are negative.
Manufacturers are not required to report all clinical trials or avail the findings publicly. But these unreported trial results can paint an incomplete picture of a medication. This may not be an issue if people are honest, pharmaceuticals companies are not motivated by money and mistakes don’t ever happen.
Even with COVID-19, some people would be relieved to just have a vaccine at all, while others might say ‘no thank you’ and wait for one manufactured strictly in Europe or the United States.
The bottomline is that people want medications that have been tested with integrity and according to high standards with proper guidelines. Medical researches and clinical trials today leave the door open for inaccurate findings caused both by human error and human greed.
Even if there is no ill-intention on the part of the manufacturer, mistakes can still be made during the process, leading to failure, wastage and substandard end product.
In these cases, blockchain can act as a secure repository of clinical trials, medical research data, findings and results. All data will be stored in chronological order and are not governed by any single entity or person.
To modify a data already committed to the system, the perpetrator will have to tamper with many computers in the network at the same time which in reality, is not easy to do at all. This can help reduce result switching, data snooping, and unethical reporting.
3. Reduce fraudulent claims
The third and last way in which blockchain can transform the healthcare industry is by preventing fraudulent claims. Insurance companies and other health plan providers have long been major players in the healthcare industry. They remove the burden of paying for healthcare services from the customer and place it upon themselves.
Now, we are all familiar with insurance claim frauds and the many ways they can happen including kickbacks, false claims and providing unnecessary treatments or services. According to one report, an estimated USD 2.6 billion loss is attributed to health care fraud in the United States alone.
That’s a big number. But if no one is hurt, then where’s the harm? Plus, customers or patients pay premiums every month, don’t they?
Well, consider this. Companies offering medical insurance and health plans are essentially businesses. At some point, if these companies can’t prove foul play and remain profitable, they are not going to be able to financially cope with the claims submitted. Even the legitimate ones, potentially causing the entire system to collapse.
Not good for anyone.
Blockchain technology can improve claims verification and help with the detection and prevention of fraud in healthcare.
By maintaining all insurance data, health related data and treatment data in a blockchain based ledger, they will become transparent to all stakeholders in the network including insurance companies, doctors, hospitals and patients.
All it takes is one update and it’s available throughout the network. Member claims and disputes can be processed automatically through smart contracts as opposed to manually, which is time consuming and open to even more disputes.
The idea of integrating blockchain technology into the healthcare sector might seem far-fetched to a lot of people and yes, there are many issues that need to be addressed before it can be done, including privacy issues. But we are heartened to learn that several hospitals have already integrated it successfully. Taipei Medical University Hospital is one example.
Blockchain is still in its infancy in many respects. It’s a foundational technology that needs a lot of work before it can be widely adopted but the prospects are exciting, especially in the healthcare sector!
