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Is health care ready to bet big on blockchain?

Many health care stakeholders are only beginning to consider the potential of blockchain – a type of shared distributed ledger that is already being tested in industries ranging from investment banking to sports television programming. The concept, which is the backbone of the digital currency Bitcoin, could be a game changer for health care by making health information exchange more secure, automating supply chains, and reducing billing errors, to name a few use cases. Some IT departments are already exploring the blockchain waters and trying to identify areas where the technology could be deployed. While blockchain is revolutionary, it is still in its infancy and its potential for scaling is challenged by its current limited capacity.

Nearly 20 percent of hospital executives are considering blockchain solutions, or are already in the process of deploying it, according to recent survey results from Black Book Market Research. Moreover, 70 percent of respondents agreed that blockchain held significant promise for health care interoperability. Earlier this year, the Deloitte Center for Health Solutions came to similar conclusions when our researchers examined the potential use of blockchain for health systems and hospitals in our research publication: The hospital of the future: How digital technologies can change hospitals globally.

As a ledger, blockchain securely records and stores transactions. Every action is verified and stored by each network participant based on a set of previously agreed to rules and without a governing central authority. Information can be added, but it cannot be easily changed. As a result, multiple groups – health plans, physicians, hospital systems, and even patients – can authorize and then share information securely. This can result in improved information, increased efficiencies, lower costs and, ultimately, better care.

Blockchain can offer a level of privacy and cybersecurity that goes beyond more traditional measures. Here’s why: Blockchain requires network participants to verify each transaction. In order to manipulate a blockchain, a hacker would need to access and change more than 50 percent of the blockchain network, as opposed to a single site. Given the sensitive nature of health data, combined with increased regulatory scrutiny, technology that can improve cybersecurity is highly attractive to health care stakeholders.

Blockchain is a potential game changer for health care

Here’s a look at several areas where blockchain could improve processes for hospitals and health plans:

  • Interoperable electronic health records (EHRs): Interoperability has long been an unattainable goal in health care. With blockchain, the industry might have a solution that will finally allow for the secure, trusted exchange of data between health systems, hospitals, physicians, patients, health plans, government agencies, and researchers. Information from existing EHRs could be uploaded to a public or private blockchain, and patients could grant certain individuals/entities access to all or parts of the medical record.
  • Supply chain management: Health systems and hospitals are often continually examining their supply chain management systems to improve efficiencies, increase safety, and reduce costs. Blockchain could help with the planning, purchasing, and tracking of inventory such as medical supplies and drugs. Some types of blockchains are able to execute smart contracts – decentralized applications that automatically execute actions based on blockchain activity. For example, when a medical device is used, the blockchain can record its use. When supply levels for the device reach a certain level, a smart contract would be triggered to order new supplies. Coupled with other technologies such as Internet of Things, much of the supply chain management at a hospital can become automated.
  • Revenue cycle management: Blockchain can help improve the accuracy and efficiency of revenue cycles within health systems and hospitals. Errors in billing to health plans and patients can lead to payment delays and frustrated consumers. As the industry moves toward value-based payment models, contracts between health plans and health systems and hospitals will likely only become more complex. Blockchain’s smart contracts can help reduce the manual burden for billing staff and improve the timeliness of payments. For example, payments can automatically be made after a hospital visit, or after a clinical outcome has been achieved.

Blockchain will not solve all of the health care industry’s problems and is not the best solution for every issue, and the technology has limitations. One challenge is the large volume of data blockchain will need to process. Blockchain can only process a limited number of transactions per day–a private blockchain can handle 100,000 transactions per second. Too much data can overwhelm the system, particularly for a public blockchain. However, as the technology matures, as hardware performance improves, and as standards are put in place, issues like this are expected to be mitigated.

At the recent HIMSS Healthcare Security Forum, Maria Palombini, director of emerging communities and initiatives development at the IEEE Standards Association, referred to blockchain “challenges” rather than “roadblocks.” Challenges, she asserted “can be overcome.”

Health systems and hospitals might view blockchain as futuristic, but as the interest from the Office of the National Coordinator for Health Information Technology and industry groups indicates, adoption may not be as far away as it seems. Health system and hospital leaders should consider encouraging their IT departments to evaluate potential technology partners and join consortiums to better understand blockchain’s capabilities. Organizations that are willing to make a bigger commitment to blockchain now can begin to experiment and develop proofs of concepts for blockchain. And they can be well on their way to leveraging blockchain for the future.

Author bio

Christine is a research manager for the Deloitte Center for Health Solutions, Deloitte Services LP. She conducts primary and secondary research and analysis on emerging trends, challenges, and opportunities for stakeholders within the health care system. Her focus areas include health care information technology, innovation, and health care reform. Christine holds a MPH in Health Policy and Management from Columbia University Mailman School of Public Health and an BA in Ecology and Evolutionary Biology from Princeton University.