Explaining the Basics of Blockchain Technology in Healthcare

August 07, 2023 - Like artificial intelligence (AI), machine learning (ML), robotics, and virtual reality (VR), blockchain has been hyped across sectors, including healthcare. But navigating the hype and assessing the potential value of blockchain remains a challenge for healthcare stakeholders.

In 2017, 83 percent of healthcare executives polled by the Pistoia Alliance reported that they expected the broad adoption of blockchain in the life sciences and pharmaceutical industries within the next five years.

Since then, some of that interest in adoption has led to real-world investment, with the global healthcare blockchain market projected to reach $829 million this year, according to MarketsandMarkets.

In this primer, HealthITAnalytics will explore what blockchain is, how it works, and its potential use cases, limitations, and risks in healthcare.

WHAT IS BLOCKCHAIN?

Blockchain is often associated with cryptocurrencies, as its introduction in 2008 helped enable the rise of Bitcoin. However, interest in the technology spread across industries as secure, transparent data-sharing has become critical.

IBM defines blockchain as “a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network.” These assets can be tangible, like a car, or intangible, like intellectual property.

As a type of distributed ledger technology (DLT), blockchain allows users to record, track, share, and synchronize assets and transactions without the need for a centralized entity to do so. This decentralization helps ensure that exchanges made on the blockchain are permanent, transparent, and immutable.

As a transaction occurs, it is recorded as a “block” of information and data. Each transaction on the blockchain can contain a wealth of information related to the movement of an asset, including who or what entity was involved and when, where, or how the transaction took place. Each block is also given a hash, which serves as a unique identifier that changes if the data contained in the block changes.

From there, the block is “chained” to the blocks before and after it as the asset changes ownership or moves from place to place. Each block confirms the exact time and sequence of a transaction. The links between each block prevent a new block from being inserted between two existing ones, in addition to ensuring that any block on the chain cannot be altered.

The chain is irreversible, and each additional block and hash helps strengthen the verification of the previous block and, in turn, the entire blockchain. This feature is what makes blockchains immutable and tamper-evident.

Previous blocks in the chain are difficult for malicious actors to tamper with, helping to increase trust between the members of a blockchain network. Transaction validation requires consensus from all network members to confirm the accuracy of the data. Since all transactions on a blockchain are permanently recorded, no one can delete a transaction or block, even a system administrator.

There are four types of blockchain networks: public, private, permissioned, and consortium.

Public blockchains are those that anyone can participate in, like various cryptocurrencies. Private blockchains function as decentralized peer-to-peer networks, similar to public blockchains, but controlled by one organization that governs who may participate, maintains the ledger, and executes consensus protocols.

Permissioned blockchain networks are generally established by stakeholders who create a private blockchain, but permissioned blockchains can also be public. This type of blockchain places certain restrictions on who can participate in the network, as users must receive permission or an invitation to join. Permissioned blockchains are also used to dictate which transactions users on the network are allowed to participate in.

Consortium blockchains are maintained by multiple organizations, which can be useful in business applications in which all participants must be permissioned and share responsibility for the blockchain. These organizations can then decide who may access the blockchain’s data or engage in transactions.

Hybrid blockchains combine elements of both public and private blockchain technology, enabling organizations to establish a private, permissioned system alongside a public, permissionless one. Doing so helps control which data will be public and who can access the blockchain’s data.

Regardless of blockchain type, blockchain databases must be cryptographically secure, according to McKinsey and Company. This means that to add or access data on the blockchain, users must possess two cryptographic keys, one private and one public.

Under this framework, known as public key cryptography or asymmetric encryption, the public key is used to scramble and encrypt the data on the blockchain. The data can then only be unscrambled and decrypted with the private key.

When the data is in transit from one user to another, this framework prevents it from being accessible and interpretable by a malicious actor who may wish to alter or exploit it. An alternative to this framework is symmetric cryptography, in which the same key is used for both encryption and decryption.

These characteristics of blockchain make it an effective method for secure, transparent record-keeping and data sharing.

WHAT ARE THE USE CASES FOR BLOCKCHAIN IN HEALTHCARE?

Using a blockchain network helps achieve data parity, which determines whether data has been altered or lost during transmission, making it an attractive technology for application in healthcare.

Research and Markets projects that the global blockchain in healthcare market will grow to $6.11 billion in 2027, with much of the innovation being driven by the uptake of private, permissioned, and permissionless blockchains.

Deloitte indicates that blockchain presents significant opportunities to improve health information exchange (HIE) and interoperability.

Research published in 2021 in the International Journal of Intelligent Networks underscores that blockchain could play a critical role in healthcare’s digital transformation, with potential applications in managing EMR data, protecting that data, supporting interoperability, point-of-care genomics management and safeguarding, and tracking disease outbreaks.

The technology may also facilitate the transition from institution-driven interoperability to patient-centered interoperability, allowing patients to assign access rules for their medical data, according to a 2019 Healthcare Informatics Research study.

Additionally, it has been proposed that blockchain architecture can help preserve data privacy and provide security against healthcare cyberattacks. Blockchain-based cybersecurity models, discussed in Scientific Reports, have been shown to be effective at improving the security of patient data. HIPAA-compliant models for medical care information preservation have also been developed.

Healthcare supply chain management may also benefit from blockchain implementation, particularly the management of medical devices, drugs, and blood, organs, and tissues, according to researchers writing earlier this year in Applied Sciences.

In the clinical and lab setting, blockchain may be useful in DNA classification and sequencing to support the early detection of viruses and diseases. Blockchain networks may also enhance life sciences data sharing and bolster clinical research.

Major healthcare stakeholders are already launching blockchain-based initiatives to enable research into and adoption of the technology. In 2019, Aetna, Anthem, and Health Care Service Corporation launched a collaboration with PNC Bank and IBM to drive innovations in healthcare blockchain.

Meanwhile, Mount Sinai and the Institute for Next Generation Healthcare established the Center for Biomedical Blockchain Research in 2018 with the goal of exploring blockchain potential to advance biomedical research and clinical decision-making.

RISKS, LIMITATIONS, AND REGULATORY QUESTIONS

Like any hyped technology, blockchain does have limitations, some of which are especially relevant for healthcare.

One 2022 study in BMC Medical Informatics and Decision Making highlights that many providers interested in blockchain for HIE are concerned about a lack of knowledge, implementation issues, technological challenges, and regulatory questions surrounding the technology.

Another research paper demonstrates that a lack of standardization, accessibility, ownership, and change management significantly weakens blockchain applications in healthcare.

Blockchain’s basis in consensus, decentralized architecture, and cryptography makes it more secure than other data-sharing frameworks, but its security protections have weaknesses. For example, hashing is not sufficient to prevent tampering entirely, according to the United States Department of Health and Human Services (HHS) Cybersecurity Program.

Further, certain types of blockchain networks face unique legal challenges.

Members-only blockchains can utilize “smart contracts,” which are designed to automate aspects of a consensus agreement between the members or organizations governing a blockchain network. However, the enforceability of these contracts can be a thorny issue, according to researchers from the Harvard Law School Forum on Corporate Governance.

“There is no federal contract law in the United States; rather, the enforceability and interpretation of contracts is determined at the state level,” the authors explained. “Thus, while certain core principles apply consistently across state lines, and there has been a drive to harmonize state laws by the National Conference of Commissioners on Uniform State Laws, any conclusions regarding smart contracts must be tempered by the reality that states may adopt different views.”

This issue would particularly impact multi-state health systems or multi-system organizations, as smart contracts between them may not necessarily be binding or enforceable in a court of law. Negotiating, drafting, and adjudicating these contracts could also present a challenge for non-technical stakeholders, the researchers noted.

Blockchain technologies deployed for many use cases in healthcare would also need to comply with certain regulatory standards and privacy laws, including HIPAA. Experts writing in a 2019 Journal of Network and Computer Applications article indicate that this presents a massive challenge due to limited regulatory frameworks for advanced technologies in the US.  

Aside from legal and regulatory concerns, the hype surrounding blockchain can overstate its potential. A report from the Organisation for Economic Co-operation and Development (OECD) indicates that most research into healthcare blockchain presents theoretical models and frameworks, with few details about how those architectures could be practically developed. Prototypes or pilots of these frameworks are seldom offered, and deployment of blockchain in healthcare at the national scale is rare.

To help advance the technology into real-world application, the OECD recommends deploying it in well-suited use cases in combination with other technologies operating under a well-governed health information ecosystem. Potential applications of the technology can also be assessed using the four parameters outlined in the Recommendation of the OECD Council on Health Data Governance: “fitness of the technology for the use to which it will be applied; alignment with laws and regulations; incremental adoption to allow time for evaluation; and a training and communications plan.”