Blockchain Use Cases in Healthcare

Blockchain technology has been steadily gaining traction. Bitcoin is now something your grandmother has heard about it (but doesn’t know what it is). In fact, it’s more and more common for people to buy crytocurrency using only their phone. That said, Bitcoin isn’t blockchain, it’s only one implementation of a growing universe.

Any time there is a successful technology trend in a given industry, it’s only a matter of time before folks look to translate it to other sectors. Fintech has seen some big successes using blockchain technologies, including Coinbase (crypto exchange), BlockFi (credit card rewards in crypto) and Alchemy (Amazon Wed Services for crypto). These, and other startups have received lots of attention from investors hoping to catch a future unicorn.

And over the past few years, it’s begun poking at the healthcare sector. But is there a good use case?

Blockchain Differentiators

There are many flavors but fundamentally it’s value is as a decentralized, immutable and transparent system of trust. It’s not dependent on a central authority to carry out it’s function. This makes obvious sense for financial transactions where trust is everything. But given these core components, does it have a valid place in healthcare?

Some think so and are jumping in early on product development. Some concrete applications include:

• Patient Health Data: You own you’re own data (at least so says GDPR), but for medical records it’s technically true but often there are blanket consents built into a health systems that any and all future use of your data. Patient data is also siloed across EHR systems, payers, Big Tech and other healthtech companies. Interoperability, while maintaining privacy, has been the evergreen challenge. One company, Medicalchain is trying to commercialize a more patient-centric platform that empowers users to share their data on permission-only basis. They plan to integrate Apple HealthKit, which would be differentiator (though do physicians want this?). Cool idea but faces some big hurdles in disrupting giants like Epic.
• Decentralized Digital Identities: Synaptic Health Alliance is one example of an effort to improve provider data accuracy. The consortium includes several major payers including Aetna, Humana and United Health Group. Blockchain allows users to create and manage digital identities that provide greater privacy and control of data.
• Zero-Knowledge Proof (ZKP): This essentially allows for a ‘prover’ to convince a ‘verifier’ that data is true without disclosing any additional information about it. In a word, privacy. My sense is that it’s not fullproof, but still this is the type security feature one needs when dealing with personal health information (PHI).
• Smart Contracts: Not all blockchain technologies feature smart contracts, though Ethereum is best example that does. These are essentially a small bits of code (often in Solidity) that defines the parties and if/when statements to trigger the contract. One weakness is that any real-world data isn’t built into the contract; however, Oracles are a way around this – essentially a bridge that can act as a data trigger.

Emerging Startups

Equideum Health (formerly ConsenSys Health) and Nokia announced a partnership to building a patient data marketplace, called Decentralized Equideum Exchange, to act as a broker for patient data (Mearian (2022)). Currently there is little control or conditions for use of patient data – once you consent, all your data is on offer, in perpetuity. This approach aims to offer patients more agency and financial value when companies use their data.

BurstIQ, based in Denver, is developing a product called LifeGraph®. The platform hopes to enable easier management and integration of Personal Health Information (PHI) and Personally Identifiable Information (PII). Currently personal and health data is fragmented across EHRs, smart devices and Big Tech companies – this approach hopes to connect pertinent information for use individually or to businesses (Johnson (2022)).

Eggschain, a startup based in Austin, is using blockchain to offer more secure, trackable solutions to fertility treatment. They company is developing Chain-of-Custody technology for tracking bio specimens, including sperm, eggs, embryos, genome, stem cell, tissues and organs, and other genetic material (“Eggschain to Open Auction for First Publicly Available Sperm Account on Blockchain” (2022)).

Vineti, co-founded by GE and the Mayo Clinic, is employing a similar approach of augmenting supply chain data quality to personalized therapeutics, namely CAR-T cell therapy. Autologous and allogeneic cell and gene therapies are complex to manufacture and distribute. Vineti sees a need to address this through generating Chain of Identity (COI) and Chain of Custody (COC) event data, ensuring compliance and timely interventions to the patient (Vineti (2022)).

Challenges for Adoption: Legacy vs. Blockchain

Healthcare as an industry tends be fairly conservative in adopting new technologies (a good example is EHR adoption which took decades, and only really became widespread when the HITECH Act was passed in 2009. It moves slower than Tech, and for good reason. The stakes are much higher.

Given this, early players in this space will probably use blockchain not as their core tech, but to augment some existing value stream. The most attractive products will reduce customer friction with minimal switching costs. A good example is Vineti, as mentioned above. The complexity of cell/gene therapy manufacturing, and compliance burden, is well suited to a more efficient trust system like blockchain. In fact, their website barely mentions it (here is a press release details an issued patent). It’s clearly one piece of a larger puzzle. I think this is intentional as there’s a clear sentiment that blockchain is all hype.

This survey from GlobalData in 2020 highlights industry’s view of blockchain and it’s upside. About 1 in 5 think it’s vaporware, and I’m sympathetic to this cynicism. Hype cycles are real. I’ve seen enough of them to be skeptical when new tech arrives on the scene.

The other challenge I see is more philosophical – centralization versus decentralization.

Contrary to many Web 3.0 mavens, centralization does have value. I wonder how dysfunctional a decentralized military command structure would be? Within a company, centralizing procurement yields lower prices and savings. Perhaps a more relevant example is patient data. Data centralization is standard among healthcare systems, and this has value in maintaining data quality, governance and security.

Still, I’m fond of the idea of disrupting legacy healthcare systems and their centralized nature. We’re beginning to see traction in this area in things like decentralized clinical trials, remote patient monitoring and telehealth. The incentive is there, but not everywhere. I have a hard time imagining how surgical interventions can become more decentralized.

As blockchain technology and companies mature, I think the hype will die down while the healthcare industry quietly trials adoption.

The Horizon

Whether blockchain is truly disruptive is debatable; though any new technology will evolve and adapt toward valuable use cases. We haven’t even touched on non-fungible tokens (NFTs), blockchain-enabled medical devices or decentralized medicine (DeMed).

Looking forward, it’s clear China is investing heavily.

Alibaba, one of the words largest retailers, has absolutely dominated the patent landscape for blockchain. If it’s truly disruptive, China seems to have been ahead of the curve.

As more people become familiar with crytocurrency (usually as a financial security), there will be shift towards a more open stance on other blockchain use cases. There’s also a clear generational driver at work, young adults are much more bullish on crypto. Regardless, how it plays out in healthcare will takes it’s course. My money’s on products that subtly incorporate blockchain aren’t too disruptive. While I love the idea of patient data exchanges, I don’t see that happening anytime soon given the hold EHR providers have already, disincentives for providers and legal risks.

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