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July 09, 2021 - by Devico Team

Benefits and challenges of using blockchain technology in healthcare applications

Blockchain has become a buzzword. Not everyone may understand the meaning of the word, but everyone has heard it for sure at least concerning cryptocurrency. This technology kindles the scientific community’s interest and is likely to be widely used across most varied industries apart from banking and fintech. More and more healthcare providers all over the world consider the implementation of blockchain technology in their healthcare applications as well. So let’s have a look at the advantages of blockchain technology usage in the healthcare industry and the challenges associated with its adoption.

What is blockchain and how does it work?

Blockchain is a rather complex and intricate phenomenon. Broadly speaking it is some kind of a database but not in the usual sense. Blockchain is a system where data is stored in a way that makes it is extremely difficult or even impossible to modify, hack, or cheat the information.

In blockchains, records are kept in a block. As soon as the block is filled with the data it gets chained to the previously created block with the help of cryptographic keys or hashes. As a result, data is chained in chronological order. As for the hashes, they are stored in distributed ledgers assessed by the participants at each network node. Every node has a copy of the whole data shared across the chain, and it is continuously updated to be synchronized.

What is also important is that any record can be neither deleted nor seamlessly modified and any transaction cannot take place unless all participants validate it. So as the number of participants is growing, blockchain is getting more secure.

The main characteristics of blockchain are accuracy, decentralization, security, transparency, and immutability.

How has blockchain technology entered the healthcare industry?

The healthcare industry has undergone a serious digital transformation. Advanced technologies like IoTs, telemedicine, and AI-enabled devices have drastically changed the way healthcare services are delivered by improving the quality of patient care, making medical help more accessible, and optimizing related processes. However, the industry is still facing challenges related to cybersecurity and patient data protection.

According to multiple surveys, the healthcare industry has remained the main target for cybercriminals for several years running. Blockchain technology has rushed into the healthcare industry promising to settle security problems. A range of use cases has been identified for the application of blockchain as it is considered to be immensely secure, transparent, and immune to cyber attacks.

The blockchain technology opportunities in the healthcare industry

A thorough study of the needs and challenges of the healthcare industry, as well as evaluation of blockchain technology abilities, allow us to make the conclusion that the active use of this technology in healthcare applications can yield a lot of benefits. So, let’s reveal in which way application of blockchain technology can be useful in healthcare:

  • Decentralized system

    As we have mentioned earlier, decentralization is one of the core peculiarities of blockchain. So using it for data storage, healthcare providers can enjoy hackproof systems and prevent sensitive data from getting compromised.

    All hospital hardware can be run on these decentralized systems which allow eliminating either man-made or even natural disasters.

  • Sole data source

    As we have discussed, added to blockchain records cannot be deleted or modified which provides 100% of authenticity and security. As a result, it becomes a valuable resource of the most varied information. Researchers via validated access can use this blockchain property to analyze and study a vast amount of unrevealed information. It provides opportunities for longitudinal studies that bring substantial outcomes allowing to improve treatment methodology.

  • Continuous monitoring and data access

    In healthcare, blockchain can be effectively used in combination with IoT and wearables to store and update in real-time useful information on patient health, e.g. blood pressure or sugar level. In such a way doctors have an opportunity to monitor patients who are at risk and alert their caretakers in case of an emergency.

  • Consistent rule-based processes

    Blockchain technology also gives an opportunity to take an advantage of smart contracts that are programs stored on a blockchain and run when preset stipulations are met. Smart contracts let to automate processes, triggering the next action whenever conditions are met, and provide trustworthy results, without the involvement of any intermediaries or time loss.

    In healthcare software development, this technology is used to develop a consistent rule-based process to access patient data.

    Besides, smart contracts can be useful when it comes to medical billing. Insurance claim verification and processing have been a pain for the healthcare industry taking a lot of time and effort. With smart contracts in blockchain, as soon as a claim is submitted, the terms and conditions of the contract between a payer and a provider are defined, the claim is processed in real-time, and payment is transmitted to the provider in a timely manner.

  • Effective supply chain management

    Currently, a healthcare supply chain is insecure and protracted. Firstly, the drugs are produced at pharma companies, then they are transferred to the wholesale distributors, and from them to retail companies that finally sell them to the end-users. In such conditions, there is a great threat to the authenticity of the drugs as counterfeit drugs can easily enter the supply chain.

    Due to its immutability, blockchain can solve this problem efficiently. First of all, using blockchain pharma manufacturers can track ingredients used for drug production. Secondly, this technology gives an opportunity to trace drug supply and detect possible sources of counterfeiting.

Reasons to apply blockchain technology in e-health apps

There has been a lot of hype around blockchain technology with good reason.

Blockchain is indeed a revolutionary invention as it helps to overcome numerous digital challenges due to a wide range of advantages the main among which are:

  • Secure data storage and privacy

    Security and data integrity issues are the burning problems of the healthcare industry. The high risk of cyber-attacks and confusing interoperability standards limit the ways data might be distributed and accessed. Besides, rather often data cannot be trusted even though it is exchanged, because files can be corrupted or contain errors that should be fixed manually. With high security standards, transparency, and immutability, blockchain technology provides proper access control and secure patient data storage. Therefore, blockchain-enabled applications securely protect Electronic Healthcare Records and Electronic Protected Health Information significantly improving the privacy so important for HIPAA compliance.

  • Optimized exchange of health records

    Unfortunately, most healthcare systems do not provide the opportunity to share health data, which is one of the main difficulties for health IT and interoperability of EHR. Blockchain technology, in its turn, has the potential to solve issues related to interoperability by being utilized as a common technical standard for secure electronic health data distribution.

  • Information traceability

    As long as in blockchain all blocks with records are chained chronically and any added record cannot be either deleted or modified, it provides a great opportunity to trace the information, This property can be immensely helpful to monitor medical supply and ensure correct and fast insurance verification and claim processing.

  • Support for medical research and studies

    Blockchain technology can help to overcome challenges in relation to data snooping and result shifting. The system provides the opportunity to transfer securely time-stamped permanent healthcare records and research outcomes.

  • Cost-effectiveness

    The use of blockchain technology in e-health apps enables healthcare providers to completely get rid of the third-party and mediator systems that are usually involved in data fetch and transfer. In such a way, healthcare facilities can significantly reduce the corresponding expenses.

  • Competitive advantage and industry leadership

    Blockchain can serve as a great base for innovative and effective business models to evolve, have the edge over rivals, and establish leadership.

The difficulties of using blockchain technology in e-health apps

As you have already understood, the use of blockchain in e-health applications can bring a myriad of benefits. Still, it should be admitted that implementing such technology as blockchain is not an easy task.

Along with a wide range of advantages, there are a number of challenges that you may face trying to apply blockchain technology in healthcare.

  • Ambiguousness

    Blockchain is considered to be a rather new technology. It has been actively used in banking and cryptocurrency management in particular. But there are still not so many applications of blockchain technology in other projects, although representatives of other industries have been showing a great interest in its implementation as well.

    As for healthcare, there are still not many successful blockchain healthcare projects or initiatives yet which gives rise to uncertainty and doubts.

  • Data ownership

    There are certain concerns as for data ownership as there are no clear established rules letting understand who owns the healthcare data and grants permission for sharing.

  • Cost

    It is pretty difficult to estimate the total cost of blockchain implementation and maintenance in healthcare. As a result, even not every large healthcare provider is ready to consider the implementation of this technology having no clear idea of its actual cost.

  • Rules and regulations

    Currently, there are no officially recognized rules throwing light on blockchain technology usage in the healthcare industry. Besides, with already existing security regulations like HIPAA, it is unclear how the new rules and regulations regarded blockchain use will be enforced.


Blockchain is a technology that has rocked the world. While presenting significant opportunities, on the one hand, it also brings certain challenges when it comes to its application in the healthcare industry. Still, in spite of all current difficulties, blockchain technology has great perspectives in the healthcare industry as its application may help to overcome the main problem related to sensitive data protection. There are numerous preconditions letting us state that blockchain technology has a great future in the healthcare industry.

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