Aleph Zero Blog

Blockchain and Healthcare: Streamlining Medical Processes and Incentivizing Wellbeing

Aug 10, 2021

Besides the financial sector, one of the most promising use cases for blockchain technology is its application in the medical industry. How can we apply DLTs in healthcare?

Blockchain and Healthcare 

One of the many use cases for blockchain technology has to do with its implementation in modern healthcare systems. The coronavirus pandemic was the wake-up call that made governments and decision-makers the world over aware of how flawed our current systems are. There is no prize for kicking someone when they are down! Instead of listing all of the shortcomings that made themselves apparent over the course of the past year, let us take a look at the many ways in which blockchain technology can help health providers. The proposed solutions will save countless lives. 

Putting the Patient First 

The John Hopkins University lists “medical error” as the third leading cause of death in the USA, with a quarter-million deaths in 2016 alone. That is an incredible figure and one that is within our power to lower. We must take into account that the majority of medical errors are a result of a lack of information. Every country in the world is struggling with making the connections between various data silos that hold patient information readily accessible for doctors.

This dearth of information results in poorly coordinated treatment that can cause more harm than good. How do we keep a patient’s information securely all in place? One of the solutions that industry experts have discussed is using blockchain technology to collect patient data in one easy-to-access location securely. We can adapt this to our current systems and provide a convenient bridge between the various locations where data storage occurs.

Power to the Patient

A truly revolutionary element in this proposition is the idea to give patients power over their data. Only the patient should have the right to give someone access to their sensitive information. As the patient’s medical history grows with each visit, prescription, lab result, and so on, the blockchain collects that record. It is secured through a hash function. Hashes are unique fingerprints of strings of letters and numbers representing files without disclosing the file itself and are notoriously difficult to reconstruct the original data. This makes hashes perfect for storing a representation of the sensitive data on a public chain whilst still maintaining privacy. Third parties will only receive access to a patient’s information if the patient issues consent. There are numerous advantages that blockchain would bring to Electronic Medical Records (EMRs), including: 

  • Creating a single source of “truth” for patient data allows for a more streamlined process both for healthcare practitioners and the patients. 
  • Patients can monitor the development of their personal health database and control who has access to their data. They can even set time limits for how long third parties may be able to view their information. 
  • Creating a blockchain database of health records will benefit researchers by creating a single database from which they will be able to draw out more accurate observations on population-wide health trends, which will, in turn, allow for more personalized medical practices. 

Connect the World 

The Internet of Things (IoT) is upon us with an increasing number of our household items collecting data on our day-to-day activities. This is revolutionizing the way we live, introducing a new level of comfort and efficiency, yet it also poses a threat to data security. One of the solutions proposed to deal with these new threats is to use the cryptographic security measures employed in blockchain technology. Regarding healthcare, employing IoT devices can give doctors better insight into a patient’s condition on a more regular basis. This allows for a more personalized medical service.

These technologies can also inform emergency services if a patient is in trouble (e.g., an older person who suffers a heart attack). This will permit quicker reactions to life-threatening situations. Both of these applications need security from tampering and attacks. Unprotected data can be falsified by a malicious actor and lead to errors in treatment. The supporting systems also need protection from distributed denial of service attacks (DDoS). Implementing blockchain technology with the cryptographic solutions it employs can prevent our data from landing in the hands of bad actors. The distributed nature of blockchain technology will also mean that IoT devices will not have to go through centralized servers. This will prevent man-in-the-middle attacks. 

Making Insurance Simple

Another area in which the health of patients will benefit due to blockchain technology is by insurers being able to offer better services and coverage for patient’s health conditions. Health insurers often change rates for services, which results in many claims disputes. A more streamlined system will allow for quicker resolutions and more importantly, the pricing set by insurers will be more accurate, to begin with. The introduction of smart contracts (these are instructions stored on a blockchain that act when predetermined conditions are realized) can also help in combatting data fraud by verifying the information submitted by a malicious actor. Streamlining administrative processes can occur through the adoption of smart contracts. They can enact operations that can automatically collect data, records, and other sensitive information before linking them together for further processing. 

Streamlining Shipping

Medical supply chains are another area where blockchain technology can find implementation. One of the biggest challenges facing the medical industry is the fragmented nature of supply chains and the lack of transparency that they demonstrate. This has caused numerous incidents involving counterfeit drugs entering supply chains which cause immense risk to patients. During the COVID-19 pandemic, the government of the United Kingdom collaborated with companies specializing in blockchain solutions. They used them to implement systems that would verify the authenticity of medicine and supplies sent to hospitals.

Managing supply chains through blockchain technology makes shipping more efficient and streamlined by reducing paperwork. Entities can secure all of the relevant information in one easily accessible ledger. Nowadays, shipping goods in our global economy involves a string of negotiations, phone calls, emails, etc. with countless entities. These negotiations are time-consuming; plagued by blunders and human error. Already companies like Maersk, Amazon, Walmart have spearheaded implementing blockchain technology into their own supply chains. IBM has devises systems to securely track a product’s development process from the moment the raw materials have been procured to the moment the product is complete. These processes will result in a less chaotic world, where development is impeded to a lesser degree by incompetence or bad intentions. 

The Right People in the Right Place 

Besides tracking goods, blockchain solutions can also find implementation in tracking the credentials and skills of healthcare professionals. This will help shorten the time needed for hiring processes as well as foster trust between patients and professionals. It will also benefit hospitals and clinics as they negotiate insurance policies. Places that offer medical procedures need insurance and one of the elements that dictate the cost of insurance are employee credentials.

Healthcare providers must inform insurance companies about their staff’s qualifications, licenses, completed training, as well as ongoing training, board certifications, hospital affiliations, etc. This information is usually scattered among a large number of databases. Seeing that most doctors work at multiple locations it means they all need to individually apply for insurance. This causes data redundancy. Moreover, insurers must authenticate each bit of information.  It would be much more efficient to store this information in a shared, public database with privacy-enhancing capabilities. This would allow all interested parties to have access to it without all the bureaucratic gymnastics our current system demands. 

And the Prize Goes To…

One of the more interesting ideas that gained traction among enthusiasts of the blockchain/healthcare fusion is the idea of incentivizing positive behavior among citizens through reward systems. This has already occurred in the automotive industry by awarding drivers who made ecological choices with cryptocurrency tokens. Healthcare is a huge burden on the finances of a nation, so perhaps it can be more affordable in the long-term to endow financial incentives on citizens who live healthier lives. A citizenry that makes more responsible health choices is more productive, lives longer, and incurs lower costs on a countries healthcare system. The market is seeing novel solutions sprout up that have developed systems to reward healthy behavior through gamification and behavioral economic principles. 

The Four-Part Framework 

Now that we have looked at some use cases in which blockchain technology can benefit the healthcare system we must also acknowledge the fact that it is not a panacea. Not every problem requires blockchain implementation. Every organization should first identify four crucial points that will reveal whether implementing a novel technological solution like blockchain makes sense. Blockchain is best at dealing with problems in which these four conditions reveal themselves:

  1. Information stored in a common database is acted upon by several actors and so a visible trail of interactions is required to maintain transparency-especially important when dealing with sensitive patient data.  
  2. Trust that the transactions are valid is required.
  3. Middlemen are not trusted as intermediaries.
  4. Security is paramount to ensure the system operating correctly.

And as efficient as blockchain is in dealing with these problems, there are also some drawbacks to consider when applying this technology to any scenario.  

Permissionless or Permissioned? 

Permissionless blockchain frameworks are fantastic tools for introducing transparency and security to any process but have severe constraints in throughput. Tradeoffs have to occur between the number of transactions that the system can handle at any given time and security.  For years, this has been a problem. Decentralized blockchains such as Bitcoin or Ethereum struggle to offer transaction speeds that would allow for mass-market adoption. One proposed solution is to employ permissioned blockchains; these protocols require some form of authorization to access data. Their advantage is that they can offer faster transaction speeds due to the data being stored on one centralized server. This offers us the security that blockchain cryptography. Unfortunately, it still leaves us the problem of dealing with centralized entities. In short, a permissioned blockchain is a correct approach when you’re running experiments. Sadly though, in most cases, it’s nothing more than a glorified, centrally managed database.

Data Size Matters 

When placing data on the blockchain we must also take into account the size of the data we store. Doctor notes, MRI or X-ray images, and other miscellaneous data can find better storage options elsewhere. Storing them on the blockchain can unnecessarily bog down the system and adversely affect performance. It would be better to use the technology for sharing information on broader data sets such as demographic information. Information that is bulkier and more private can be stored on private databases. These databases can be accessed if one possesses the appropriate cryptographic key. Problems also arise when confronting the sensitive data that falls under the Health Insurance Portability and Accountability Act (HIPAA). Data stored under these regulations must be stored in the patient’s country of origin. Something which is impossible to identify on blockchain servers.  

Adopting Innovation 

Every innovation had to combat numerous hurdles before finding mainstream adoption. One of the challenges facing blockchain technology in the healthcare industry is convincing various entities to acknowledge the value coming from streamlining data transfer. Blockchains are only as powerful as the number of users they possess. If only a small number of users are present, it doesn’t make a strong case for any business to adopt the technology. According to a survey of 146 medical institutions in Europe, only 4% are using blockchain technology and 14% are planning to implement it soon.

As we can see there is a long way to go to popularize the solutions offered by the technology. This means that incentives that will convince entities unsure of experimenting with the technology need introduction. In permissionless blockchains, incentives can come in the form of cryptocurrencies. In permissioned ecosystems, participation in exchange for financial incentives or access to blockchain data in return for processing transactions is crucial. Most importantly though education is key, as public understanding of the technology is less than satisfying. 


Due to the novelty of the technology the costs of maintaining these systems are as of yet unknown. Health institutions spend large amounts of money as it is to maintain their frameworks and database. This means they may be unwilling to invest in a technology that is still in the development phase. A counterargument to this stems from the technologies properties and may ease worry in this department. Blockchains’ open-source technology and distributed nature can significantly reduce operation costs. In fact, it can be cheaper to store data on a public network, rather than storing everything in-house. Also, once the framework is set up it requires little troubleshooting. Data stored on the blockchain is accessible to all users. This means it is unnecessary to spend time and effort creating backups. Moreover, chains with asynchronous properties will guarantee that the network will remain operational.

Another interesting aspect to consider is the costs of managing data off-chain and on-chain. Storing data off-chain means incurring fixed prices. This happens because the nodes and software required for managing the information are not reliant on the fluctuating cryptocurrency market. Any data stored off-chain can also be permanently deleted to comply with the governing privacy regulations. Public blockchain transaction speeds are tied to the underlying value of the cryptocurrency of the host blockchain. This creates a scenario in which unpredictability reigns supreme. Unfortunately, it makes the technology unscalable for mass use due to high costs. Currently running off-chain nodes is cheaper than using public ledgers when dealing with large data sets. 

Regulatory Hurdles 

No matter the use case explored, regulatory hurdles always pop up as one of the key issues standing in the way of blockchain adoption. The privacy policies currently enforced, e.g., through the General Data Protection Regulation (GDPR) implemented by the European Union (EU) cannot deal with the immutability of data that blockchain technology adopted as one of its pillars or the decentralized ownership of data.

The GDPR requires that data has an owner and that the data can be deleted at any time. Two critical rules that blockchain does not abide by. This is a problem that reaches far beyond the borders of the EU. Even companies from other parts of the world must adopt GDPR practices to do business in the EU. Compromising the novel security and transparency solutions blockchain adopted to fit regulatory requirements would dramatically reduce the technology’s disruptive potential. The world doesn’t need another database solution that doesn’t have the disruptive potential to create a more transparent world. Healthcare providers should collaborate deeply with policymakers. We must create new frameworks where the governing laws and novel technologies can coexist. 

Aleph Zero and Healthcare

Aleph Zero can offer a new perspective on blockchain implementation in the healthcare ecosystem. This novel protocol solves many of the challenges currently facing healthcare integrations. Boasting both superior security and transaction speeds, Aleph Zero can solve scalability issues. The low transaction costs offered by Aleph Zero will mean that securing data on-chain will be cheaper than currently.

Also important for this successful merger of technology and healthcare is meeting the above-mentioned regulatory requirements. Aleph Zero’s own Matthew Niemerg cooperates with the EU’s Blockchain Observatory and Forum. This advisory board monitors the crypto space. It facilitates innovative solutions that will allow for seamless collaboration between established and well-respected regulatory policies and the technological revolution happening in the blockchain space. We are all swimming in the same boat, as even healthcare providers suffer from the same ailments as the general populace. A victory in creating more effective medical institutions is a victory for all of us.