Blockchain making medical data more secure cover 3

Blockchain Explained

Private Blockchain Technology in Healthcare

September 8, 2021

Our health is a very personal and private issue. Yet, in the past 12 months, according to the HIPAA, over 34 million patient records have been exposed to data breaches in the US healthcare ecosystem. Confidential health information, genetic data and financial details have all been stolen. The pandemic has also put the focus on the pharmaceutical industry and their security challenges to keep research and intellectual property safe as well as securing the supply chain.

In February this year, it was reported that North Korea had launched a cyber-attack on Pfizer in a bid to steal information about its BioNTech-partnered COVID-19 vaccine. And according to a recent Deloitte report, the pharmaceutical industry is often the number one target of cyber criminals – either private or state-sanctioned – as drugmakers move toward increased digitisation and storing of highly valuable data online.

Paper chase

One of the problems in our healthcare organisations is the sheer volume of paper still in health administration. According to Deloitte – a single healthcare provider will file in the region of 20,000 paper forms annually. And surprisingly, more than half of the 30 billion healthcare transactions performed every year will still be via fax, with over half of these documents arriving far too late into the hands of the attending physicians. Of those that arrive on time, more than half will contain either insufficient or incorrect detail. There’s never been a more pressing case for digitalisation.

While there have been numerous failed attempts at digital transformation in healthcare, a new generation of private blockchain technology in healthcare may provide the answer for more secure information exchanges.

The case for blockchain

Secure data sharing and access between multiple parties is a major challenge in digital health, where the privacy and security of medical data are paramount. The goal of improving the quality of care cannot be achieved without more coordination in the management of patient data and the ability to apply analytics to population-level medical data. This is where blockchain comes in by making it easier to share and analyse data securely, with patient consent, across very fragmented healthcare systems.

Some countries invested early in solving this issue are already reaping the benefits. Estonia began using blockchain technology as part of its digital transformation strategy as far back as 2012 to secure healthcare data and process transactions. Now, all the country’s healthcare billing is handled on a blockchain, 95% of health information is ledger-based and 99% of all prescription information is digital.

*According to BIS Research, it is estimated that the adoption of blockchain technology could save the healthcare industry up to $100-$150 billion per year by 2025 in data breach-related costs, IT costs, operations costs, support function costs and personnel costs, as well as through a reduction in frauds and counterfeit products.

How it works

Blockchain is essentially a digital system of recording information that is extremely difficult to alter, cheat or hack, and it is already changing digital world concepts such as ownership, privacy, uncertainty and collaboration. All blockchain technologies provide a single time-stamped version of the truth but blockchains come in three flavours – private, public and hybrid. And it is private blockchains that are rapidly gaining interest for enterprise applications in healthcare and other sectors.

Blockchains use mathematical and cryptographical techniques to provide trust and security – rather than through third parties – and rely on an accessible, open and transparent user structure to confirm all is well. But while anyone can join a public blockchain, private blockchains offer all the same distributed benefits, but they retain some of the characteristics of more centralised, controlled networks. This control improves privacy and eliminates many of the illicit activities often associated with public blockchains and cryptocurrencies.

No one can enter a private blockchain without proper authentication. Private blockchains are, by definition, ‘permissioned’ and are usually set up for reasons of privacy, where it does not suit an enterprise to allow every participant full access to the entire contents of the database. In effect, private blockchains empower and support the organisations rather than the individual users.

Filling the gap

The Office of the National Coordinator for Health Information Technology in the US recently defined the critical policy and technical components needed for nationwide interoperability. The stated requirements included: a ubiquitous, secure network infrastructure; verifiable identity and authentication of all participants, and consistent representation of authorisation to access electronic health information. By using private blockchain technology in healthcare fulfils these requirements by making and keeping data secure, verifiable and interoperable and giving healthcare professionals real-time access to it.

Private blockchain platforms help reduce friction in the system while reducing operational costs. They can also eliminate suspicious and duplicate transactions by securely and chronologically logging each one in real-time. Once verified, using an advanced consensus algorithm, and then cryptographically sealed into data blocks, the transaction or record is set in stone or ‘immutable’. The user can then verify the authenticity of data transactions or events. This means, for example, that no entity involved between a drug company and the retailer can alter the data to include counterfeit drugs; while the movement of drugs between the companies and medical facilities can be tracked in near real-time through the data stored on the blockchain.

Private blockchain in healthcare can also help to identify, track and secure all types of patient-related data and is also suited to patient tracking and claims processing due to its property of chronological data storage. Medical events are stored in the order they occur and there is no potential for illicitly changing the data at a later stage by accident or for fraudulent purposes without the entire network knowing about it.


When it comes to safeguarding sensitive information, using private blockchains is becoming the preferred option for many healthcare organisations, especially as they will also need to demonstrate full accountability – often via external audits – on the running and operation of their systems. Private blockchains provide a higher degree of regulation, determined and set by the administrators in line with their industry regulatory codes. Importantly, private blockchains do not need to use cryptocurrencies or native tokens for the network. Any association with cryptocurrencies, good or bad, is not part of the private solution. All of which means that, less energy, fewer resources and fewer participants are required to run the private blockchain, resulting in reduced cost on a far more predictable scale.

Haidrun CTA

Speak with our industry-leading experts today on how we can implement blockchain technology in healthcare for you.

Share this story: