Healthcare is one of the world’s largest industries, consuming between 10% and 20% of gross domestic product (GDP) of the most developed nations. In this complex system of interconnected entities and heavy regulatory boundaries, patient data is highly fragmented. Moreover, the cost of healthcare delivery is continuously rising due to inefficiencies in the system and dependence on intermediaries. With these drawbacks in mind, the need for a technology system that can remove the middlemen and cut costs while maintaining trust and transparency becomes obvious. Enter blockchain and Modex BCDB, which have the power to reshape healthcare.

Market overview

The healthcare industry is plagued by inefficiencies, errors, bureaucracy, and high administrative costs. Can blockchain technology help solve some of these challenges? We believe it can and a study from CB Insights confirms that. From managing patient data to tracking drugs through the supply chain, blockchain could solve some of the healthcare industry’s biggest problems, including compliance, interoperability, speed, privacy data and security issues. Blockchain could also enable new patient-centric business models, bringing patients to the center of the healthcare ecosystem by giving them the power over one of their most valuable resources: data.

As the eco-system is built out, there will be more and more opportunities to deploy blockchain applications in the future. A future which looks healthy taking into account that 49% of global healthcare companies are developing blockchain solutions, as per a PwC report. According to Global Market Insights, a global market research and consulting firm, the value of blockchain technology in the healthcare market is expected to surpass $1.6 billion over the next six years, by 2025. Blockchain-based technologies offer substantial opportunities to reinvent how healthcare companies access, collect, distribute, share, leverage, monitor and audit data. However, not all companies will benefit. Companies that are slow to change may lose out to ones that use the technology to cut costs and increase efficiencies.

Pain points

In this complex system of interconnected parties we spoke about earlier, the process of enabling data sharing between multiple parties often lacks full transparency and control from the patient’s view. Critical patient data and information remains scattered across different departments and systems. Due to this, crucial data is not accessible and handily available in times of need. The existing healthcare ecosystem cannot be considered complete as multiple players in the system do not have a system in place for smooth process management. Moreover, it is also termed as inadequate for handling the exchange of information and requires certain major changes. 

Many healthcare facilities today are still dependent on outdated systems for keeping patient records. These systems hold the functionality of keeping local records of the patient data. This can make it difficult for the doctor to diagnose which is time-consuming for the doctor and tedious for the patients, too. Due to this, the cost of maintaining a patient-oriented business is increased considerably. Then we should also take into account the problem of drug counterfeiting, which leads to losses of around $200 million. It could be diminished dramatically if a system with accurate tracking features is put into place in the supply chain. 

Another time-consuming and tedious process that results in high costs in the healthcare industry is Health Information Exchange. Since patients don’t have any control over their data, the chances of identity thefts, financial data crimes and spamming are increasing. Despite having gadgets like computers and mobile phones at every healthcare facility, we’re still not able to collect, analyze, secure and exchange data seamlessly. Therefore, the healthcare system needs an advanced system, one that is smooth, transparent, economically efficient and easily operable.

A healthy dose of blockchain

With healthcare witnessing significant improvements for advanced medicine and disease prevention, it is essentially important to protect large amounts of vital information compiled during the research process. Blockchain provides the tools for securing this mass of data from being lost, stolen or changed. Healthcare researchers, scientists, hospital administrations, and departments of health can manage their data in real time across large networks at great safely and at minimal expense. Blockchain technology makes research, management and storage of information efficient, fast and totally secure, with authenticity and with a new level of accuracy. In healthcare, the pharmaceutical supply chain, contract administration and credentialing processes likely contain the highest potential for near-term disruption.

Blockchain-enabled decentralization promises to minimize the problem of vendor lock-in that has plagued the healthcare industry. Blockchain can solve this issue by serving as a basis for a trusted decentralized database. It can enable one-stop access to the entire medical history of a patient across all healthcare providers. An access control system built using trust on blockchain puts patients in control of their data. They can grant consent and access rights to external parties, who will then have access to all or just a part of their medical records. This fits well with the patient-centric model of healthcare where blockchain can act as a catalyst, inducing trust. 

In addition, the medical records written on the blockchain are immutable and cannot be altered or deleted. This characteristic provides advantages like data integrity and provenance which can be used to build solutions to prevent drug counterfeiting and medical frauds. For instance, fraudulent results and removal of data in clinical trials that do not align with researcher’s bias or funding source can be prevented by enforcing the integrity of data in blockchain. Furthermore, it allows keeping an immutable log of subject’s consent in a clinical trial. From a financial perspective, blockchain could save hundreds of billions for the pharmaceutical industry by defining a chain-of-custody in the supply chain. It is possible to write custom laws and rules forming contracts on the blockchain, which are equivalent to real-world contracts and can be legally binding: smart contracts. Smart contracts can be used in several processes within healthcare including billing and insurance, which helps in automating the process and reducing the costs.

What makes blockchain suitable for healthcare?

Blockchain technology allows for transparent, peer-managed, secure data tracking across computing devices, and creates a public, chronological database. Why is this so useful for healthcare? Better data access models can incentivize patients and hospitals to monetize their digital assets (patient data). Also, blockchain projects are exploring ways to combine on-chain solutions (recorded on a distributed ledger itself) with off-chain ones. Transactions, emergency data, and more could be stored on a blockchain system, while larger data storage needs could be met by private repositories.

Blockchain has the potential to offer new solutions in healthcare because it is:

Consistent. With blockchain, data can’t differ across databases because there is one single record. This reduces issues with duplicate or tampered data and makes the data itself much more accessible, rather than trapping it in different organizations’ record-keeping systems.

Appendonly. Users can only add transactions to a database, making everything traceable and auditable.

Ownable. An entity can “own” data and choose who gets to access it. Instead of a company selling someone’s data to a third party, that person can control where their data goes.

There are clear rules. One version of the database is used, and the rules about it are known. As many know, the lack of data standards and master records in healthcare has created fragmentation and frustration across the industry.

Decentralized. Copies of the database are kept in multiple places and no third-party needs to exist as an administrator. This reduces overhead and the need for middlemen, which the healthcare industry has in spades. In addition, this also prevents centralized systems from becoming completely locked down and inaccessible.

Improving provider and payer credentialing, directory updates

PwC believes that a blockchain-enabled system would permit data relevant to the provider and payer credentialing process to be shared and updated in real time. A clinician who joins a physician network or hospital must first have his or her credentials – educational history, licensures, regulatory history and more – confirmed, which could require contacting more than a dozen entities and take months. They then must go through a similar process to join an insurance network. Insurance directories must then be kept up-to-date. Credentialing, enrollment and updates take time and money. Payers spend more than $2 billion a year maintaining provider databases, and each provider submits an average of 18 applications for credentialing a year. Without doubt, blockchain could substantially simplify this process.

Keeping track of products in the pharmaceutical supply chain

Supply chains in which sequential transactions move trackable physical assets through a system represent one way in which pharmaceutical manufacturers, packagers, distributors, wholesalers, dispensers and regulators could more seamlessly share information using a blockchain. With blockchain technology, each company in the supply chain would control one or several nodes. Each time a company entered into a transaction with another company in the supply chain, that transaction would be recorded and validated on the blockchain. This would simplify the transfer of data and allow product recipients to validate their provenance with greater certainty. It would also significantly simplify transaction reconciliations and data transfers.

Storing patient data

Patients’ medical histories and data can be used by practitioners to devise customised individual treatment plans. By using the patient’s genetic information, life-cycle and environment, doctors can find more effective solutions to treating diseases and syndromes. And, since a patient’s lifetime medical data can be collected and stored on the blockchain, longitudinal research projects and medical breakthroughs can be expected to come faster and at far less cost. These costs will be passed on to the public and thus healthcare accessibility globally should gain greater inclusiveness.

Secure exchange of data between health organizations

Blockchain allows for cryptographically secured data exchange among different parties. Both pharmaceutical companies and healthcare institutions can share data for the development of new drugs or vaccines with minimal risk. The technology eliminates the burden and cost of data reconciliation.

Blockchain, effective weapon against cyber attacks

A significant number of health organizations have already adopted blockchain technology in light of vulnerabilities shown by hacking and IT glitches. As a barrier against ransomware, blockchain can be very efficient. Ransomware is a type of malicious software that prevents users from accessing their system or personal files and demands a ransom payment in order to regain access. Over the past decades, ransomware has become one of the most prolific criminal business models in the world, due to the fact that cyber-criminals usually target high profile individuals, corporations and even governmental institutions. 

Ransomware works by locking a victim’s computer through encryption and demanding a substantial sum of money, usually in cryptocurrency form, most notably Bitcoin (because it is the most valuable crypto and because it maintains a level of pseudonymity) for the decryption key necessary to decrypt the data. Failure to comply with the demands leads to a permanent loss of the data. Ransomware propagates through malicious email attachments, infected software apps, infected external storage devices, and compromised websites. The good news: blockchain can provide an effective answer to ransomware and has the potential to completely reshape our perspective on data storage and data manipulation.

Managing provider information

Corporations are taking their first steps into blockchain-based projects by joining small, closed consortia that use distributed ledger systems or permissioned blockchains to keep data among the companies involved. Initial projects aim to prevent duplicated work by sharing data via distributed ledger systems. Currently, physicians have to go through a separate credentialing process for each institution and state they plan to work in, a process that can take 30–90 days for each institution. With the help of blockchain, this process could be faster, simpler, and cheaper if there was a shared record of a physician’s credentials accessible by all parties authorized by the physician. A blockchain-based system could enable that, giving physicians the private key to grant access to whichever institution is asking for credentials.

Drug supply chain

Another area where Hashed Health and several other companies are working on developing blockchain solutions is in the pharmaceutical supply chain. Counterfeit drugs and recalls of medicines (especially outside of the US) make traceability a high priority for the supply chain and blockchain solutions are one possible way to tackle this. Thanks to the Drug Supply Chain Security Act (DSCSA), in the next few years pharmaceutical supply chain players will have to join interoperable electronic systems that will allow them to track each drug throughout the entire supply chain.

Together with several large drug companies and drug supply chain giants, Chronicled is launching a pilot called MediLedger. This project uses a closed blockchain system (open for vetted participants to join) to track who touched what drug at what time.

By ensuring that only manufacturers can commission serial numbers and attach unique identifiers to products (which are noted by the ledger) the system makes it much more difficult for a counterfeit product to enter the chain at a random point.

Claims management, payment, prior authorization

The back-end of healthcare is slow, complex, and expensive. Billing- and insurance-related costs are an estimated 18% of United States’ total national health expenditure The American Medical Association (AMA) found that more than a quarter of practices had to wait 3+ business days for a prior authorization (approval from a patient’s insurer to cover a drug). Blockchain, aligned with data standards, has the potential to speed up some of these processes and reduce costs. One area where this might be possible is in claims management, where several middlemen are focused on standardizing data, following complex and variable procedures. A lot of this work requires accessing complex data from different entities. Payers have to know what services a patient received, and the patient’s specific plan. Doctors need to know how much to charge a patient. And everyone wants to know where in its lifecycle a claim currently is.

Currently, prior authorizations are conducted by insurance companies to make sure all other options have been explored before expensive drugs are approved. This costly process is largely rule- and checklist-based, and currently takes between 1 and 15 days. Smart contracts could speed up parts of this process by codifying a payer’s rules around a drug, verifying whether every alternative was explored, and verifying whether previous drugs/tests caused adverse reactions. However, this would require easy access to a patient’s medical record, which could present a significant obstacle.

Research and trial design

Beyond better data sharing, blockchain offers an opportunity to improve healthcare before the treatment phase: in research and clinical trials. Effective research and clinical trials require the coordination of multiple sites and stakeholders, as well as careful management of massive amounts of sensitive data coming from different sources A blockchain can improve informed consent and structuring protocols (documents that make clear the objective, trial design, and how efficacy will be assessed). By determining early on how a study will be conducted and analyzed, third parties can quickly see whether the original design was adhered to.

Timestamps and Smart Contracts could ensure researchers stick to study design and don’t change the criteria or analysis mid-trial. This helps remove some of the biases that can occur when conducting research or clinical trials, and better ensures reproducibility and publishing of negative results (which frequently doesn’t happen).

Patient consent forms could give access rights to each vetted entity as they use and attach new data, which becomes available to every participant on the ledger rather than needing to reconcile separate data collections together. This would ensure no data is lost or tampered with.

A permissioned blockchain could give all the members of a clinical trial or study a timestamped, real-time view into what data and transactions were happening to a study participant at a given time since they each have a copy of the shared database. This removes the data reconciliation process and makes it easy to walk through how a study was conducted end-to-end, which is good for auditors and people who want to reproduce the study.

In the long run, the true benefit of a blockchain-based ledger are decentralized patient records as a platform. Giving patients the ability to easily access their health records, as well as grant providers comprehensive access, would change the shape of healthcare. There are lots of obstacles to overcome before this goal can be reached. Clearer regulations, more ways to create and capture data outside of the existing EHR system, and figuring out more secure ways to store massive amounts of data are just some of the issues that will need to be addressed.

Universal identities, patient health records, DApp services

The lack of interoperability in the healthcare system is a massive issue, causing duplicative work and a bad patient experience at best and medical errors at worst. A survey from the Ponemon Institute found 86% of medical errors were due to patient misidentification. Meanwhile, a Black Book survey estimated costs of repeated care due to duplicate records at an average $1950 per patient and $800 for emergency departments. Cybersecurity is also a massive issue, considering how expensive healthcare data breaches are. Most health record breaches happen because someone delivers information to the wrong place, or people access records they are not supposed to have privileges to access, according to a Verizon Enterprise report.

A blockchain ledger would create audit trails of who accessed a health record, creating more accountability. A decentralized patient health record system could better capture data and give better data access controls to patients. Patients could give keys to their data to whoever they want authorized. This would threaten any business model that is dependent on hoarding data as a moat. It would also mean that companies would have to better demonstrate the kind of value they would give patients directly in exchange for their data (as opposed to buying it from third parties that collect and de-identify the data). Pharma companies, for example, rely on this kind of data to better inform marketing campaigns and areas they should be targeting for clinical trials.

Our expert’s take on this matter

Here’s what Dragos Rautu, Head of Custom Development at Modex, had to say on how blockchain could disrupt healthcare: “In my opinion, the healthcare industry is one of the most relevant use cases where blockchain technology could be used. Here, of course, we are talking about using a consortium blockchain owned by hospitals, private clinics or medical research institutes. When we talk about business and blockchain, we should almost always think about private or consortium blockchains.

I don’t think there’s a country where the medical data of a patient is stored all in one place. Take the United States, for instance, where the data is all over, in hundreds of EMRs, and the patient does not have his/her medical records in one place. By using blockchain technology we can ensure the immutability of a patient’s medical records, the patient would own the data and only with his/her consent others could access that data. As a parent you will be able to manage your child medical record and when the child reaches the legal age, and then he/she will own the data. Summing it up, I believe that every participant in a business model will have something to win if blockchain technology is applied to the healthcare industry.”

Improving healthcare with Modex BCDB (Blockchain Database)

Modex BCDB is a new take on blockchain technology which removes the need to invest resources in blockchain training and facilitates fast adoption of the technology in businesses. The solution proposed by Modex is a middleware that fuses a blockchain with a database to create a structure which is easy to use and understand by developers with no prior knowledge in blockchain development. As a result, any developer who knows to work with a database system can operate with our solution, without needing to change their programming style or learn blockchain. Through our blockchain component, Modex BCDB is able to transform with minimal changes any type of database into a decentralized database which holds the same valuable characteristics inherent to blockchain technology: transparency, increased security, data immutability, and integrity.

Modex BCDB doesn’t work by deleting the existing database or data entries. The database is maintained intact throughout the process, data integrity is ensured by calculating the metadata of the records and storing it on the blockchain. The system does not restrict access to the blockchain or to the database, so when a developer needs to make a reporting or ETL transformations, they can perform warehouse analytics by accessing the database directly. This is because Modex BCDB has been purposely designed to be agnostic. With our solution, clients are able to set up a network, regardless of the type of database employed. In a consortium, each company can maintain what type of database they prefer and connect them through a blockchain-powered network to ensure cohesion while protecting corporate interests.

Advantages of using Modex BCDB in healthcare

Every entry in the system is recorded on the blockchain. Also, the platform will keep track of any modification made, together with a timestamp and the identity of the user who made it. Implementing Modex BCDB brings a lot of advantages:

Smart Data Access. The read operations can be done by accessing the database components directly. They can also be performed through optimized blockchain core queries to obtain records with confirmed and valid integrity check. All write operations are blockchain transactions which store references to database records location and payload hashes for integrity checks.

Record versioning. All data records are stored together with their historical versions since their creation. Every read operation can be done with a version parameter attached. This instructs the system which record version to retrieve to its caller. Record deletion is happening only at the database level, the actual blockchain references to records and records hashes are never lost. The delete operation is also marked in the blockchain trail of historical versions.

Security Permissions & Data Sharing. Traditional database engines provide access to users who can operate the data but there is no exchange mechanism between these users to access or share data between them. The Modex BCDB core engine allows data exchange between its system users. The process takes place at the record write level. Each record write request is associated with a security parameter which instructs the system what is the record visibility in regards to other system users.

Data Encryption. Data stored within network nodes can be encrypted or not. It is a matter of configuration and business requirements which data makes sense to be encrypted and which data should remain unencrypted. The encryption mechanism allows configurations to instruct the system to encrypt entire entity records or just particular fields within a record.

File Storage – File API. Our solution accepts regular file upload and offers developer interfaces for file retrieval as well. The data storage mechanism is designed to split the file in chunks and distribute them all over the network to ensure file availability, but also to increase the data retrieval speed.

About Modex

Blockchain company Modex is promoting the adoption of blockchain technology and strongly believes in a future built around blockchain. Modex offers fully integrated services designed to solve the last mile adoption problem of the blockchain and aims to make blockchain user-friendly for every single device or person. At Modex, we can innovate thanks to our incredible team of experts and we offer services for the entire blockchain technology ecosystem: Marketplace for Smart Contracts, community tools for developers and blockchain as database services for enterprises. 

In over two years, using cutting-edge technologies and with a clear strategy, Modex has evolved from the world’s first app store for blockchain into a complex ecosystem designed for developers’ needs and enterprises looking for blockchain solutions. Our mission is to spread and facilitate the adoption of blockchain into society and to solve real-world problems using this revolutionary technology.