Entrepreneurs who have invested in cryptocurrencies are already familiar with blockchain.
It’s the platform that acts as a digital, completely objective ledger for recording all cryptocurrency transactions — and it’s what makes every crypto exchange impenetrably secure, regardless of the specific currency.
Digital money is an exciting prospect, but blockchain is a buzzword in modern tech for many other reasons. Besides making cryptocurrency possible, having a secure real-time database of interactions is also a revolutionary concept for healthcare. With consumers demanding greater transparency and secure access to their data, a foundational technology like blockchain could be the answer to the industry’s biggest challenges.
The U.S. Food and Drug Administration, which regulates much of the healthcare supply chain, agrees. In February of this year, the FDA prioritized the implementation of the Drug Supply Chain Security Act. The agency is now collaborating with the pharmaceutical and healthcare industries to make blockchain technology the centerpiece of their mission. Other companies are also getting on board, such as healthcare cybersecurity startup Patientory, which aims to make the healthcare industry more secure in the aftermath of cybercrimes such as the WannaCry ransomware attack.
A supply chain that runs like cryptocurrency
When you buy and spend bitcoin or other forms of cryptocurrency, the blockchain platform that it sits on makes a record of that transaction. It doesn’t rely on input from the purchaser or seller; it simply updates its own database to reflect the interaction. This means there is no room for human error in record-keeping.
For now, the most notable application of such a platform would be healthcare’s supply chain. Producers who manufacture medical devices can keep up-to-date records of what they sell and to whom, complete with special shipping and handling instructions. Those instructions would be turned into code and run on applications that automatically relay important status and inspection data to shippers at every point while in transit.
Intermediaries who receive and distribute these goods can rest assured that they were shipped properly and then pass that assurance on to the hospitals that buy them. They can also use blockchain applications that handle their side of the process automatically, resulting in massive cost reductions. The same is true for pharmaceutical products and specialized medical equipment. Sensor-enabled IoT technology can make sure that the blockchain database is updated every time a product passes through a checkpoint, all without having to manually input any data.
For pharmaceutical and drug products, this interoperable record of transactions is important for more than just convenience. The quality of such products at the time a patient receives them can have a dramatic impact on that patient’s health condition and recovery. Ensuring high-quality medications through a blockchain-powered supply line can help improve patient care and reduce costs associated with ineffective or harmful medications. It would even reduce the proliferation of counterfeit drugs and black market trading.
A more efficient and cost-effective supply chain would have resounding benefits for healthcare as a whole. Like cryptocurrency transactions, every step in the supply chain will be recorded by the platform itself, so the ledger is not only easy to maintain, but also indisputable.
What blockchain- and IoT-powered healthcare could look like
The supply chain is the backbone of any healthcare organization’s operations. Therefore, supporting it with blockchain and IoT technology can benefit the industry as a whole in several important ways:
1. More affordable and efficient transport
By eliminating the manual processes that slow down production and transportation, blockchain helps healthcare providers reduce costs in several areas. Providers can then pass these savings on to their patients while still improving overall margins.
For example, blockchain makes it possible to transport highly sensitive materials and medications with a high amount of oversight but little need for human interaction. Packages come equipped with IoT-connected sensors that can regulate everything from temperature and humidity to the package’s level of shock absorption. At each transfer point, this information can be read and analyzed by a smart device in a much faster and less costly process.
2. More secure healthcare tech
Streamlining the supply chain may be blockchain’s most prominent application right now, but it’s too beneficial to be confined to just the supply chain. For instance, attacks like WannaCry taught us that the healthcare industry's future depends on more secure tech, and blockchain can help with that as well.
IoT-connected tech is a double-edged sword, with optimal convenience on one side and heightened risks of intrusion on the other. Even IoT devices like pacemakers can become vulnerable due to the information they carry or the risks they can pose to patients if hacked. Because blockchain has enhanced security built into it, hospitals that embrace it can do a better job of preventing third parties from gaining access to such vital technology.
3. More control over fraud prevention
Among the many things that impact healthcare costs and quality, fraud is becoming one of the more prevalent problems. In the first six months of 2017, the U.S. government recovered over $2.4 billion in fraudulent healthcare claims, according to the U.S. Department of Justice.
While blockchain can’t necessarily stop criminals from intentionally committing fraud, it can eliminate another significant contributor: human error. Many cases of healthcare fraud result from simple billing errors like overstating charges or charging patients for procedures they didn’t receive. Much like regulating the supply chain, a blockchain platform can automate most administrative and billing tasks to avoid such errors and dramatically reduce instances of fraud.
As a foundational technology, blockchain is one of the more impactful innovations today. It’s the main reason for cryptocurrency’s success, and combined with IoT technology, it can revolutionize everything in healthcare the same way — from the supply chain to the billing process and beyond. With the FDA already aiming to implement it, healthcare organizations will have to start catching up — and the sooner the better.
Sandy Hathaway is a founding partner of Exit3x and also co-founded technology startups RetentionGrid, which focuses on big data and predictive analytics, and AVARI, involving machine learning and personalization. For the past 20 years, Sandy has worked in strategy, business innovation, go-to-market, and growth roles in the medical device industry, including with U.S. market leader Medtronic and German remote monitoring pioneer BIOTRONIK, and she specializes in working with companies in heavily regulated and deep tech industries.