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Blockchain in Action: Healthcare and Pharma

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Blockchain in Action: Healthcare and Pharma


Welcome to the fifth article in PYMNTS’ Blockchain in Action Series.

Most people at least know that blockchain is the technology that bitcoin and other cryptocurrencies are built on, but a digital ledger that timestamps and orders transactions in an easily trackable and immutable way has a lot more uses.

See also: Crypto Basics Series: What’s a Blockchain and How Does It Work?

In this Blockchain in Action Series article, we’ll look at how distributed ledger technology can be a matter of life and death.

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The healthcare and pharmaceutical industries are incredibly intertwined, exceptionally expensive, and deal not just with dollars and cents, but life and death.

On the healthcare side, blockchain can make information both more accessible and more private, as well as more accurate and more efficient. However, it’s not just a matter of money or privacy, according to an October 2021 report by the U.S. Department of Health and Human Services (HHS) Cybersecurity Program.

Noting that a 2016 study by Johns Hopkins found “the third leading cause of death in the US was medical errors that resulted from poorly coordinated care, such as planned actions not completed as intended, or errors of omission in patient records,” the HHS said “blockchain-based medical record systems can be linked into existing medical record software and act as an overarching, single view of a patient’s record.”

By the same token, a widely quoted 2017 study by the World Health Organization found that 10% of the pharmaceuticals in the global supply chain were fake or substandard — with the majority of it in the developing world. But even without criminal intent, medications can expire, be damaged in transit or just plain lost, with potentially devastating effects.

The healthcare and pharmaceutical industries have so far been more cautious than other industries like container shipping food distribution, in large part because the stakes are so high and the regulatory regimes they work under are far stricter. As a result, the projects have started on simpler tasks, and tend to spend a long time in testing and development.

Nonetheless, blockchain believers say the technology can handle far more complex projects that could revolutionize healthcare. The Holy Grail would be an industrywide blockchain allowing patients to have tokenized medical records that are immutable — unchangeable — and cannot be lost, and which can be controlled by the patient, who would have to provide a key code to unlock records.

Doctors could access health data and add information like medications and past illnesses, but insurers (or employers) wouldn’t have access that would let them see if someone is likely to need expensive procedures or be out sick a lot. Pharmaceutical companies could also be given blind access to see how effective a medication was proving, or an employer could be told how many employees have diabetes, but not who they are.

Make It All Better

While blockchain developers have described the process of getting competing corporations to work together on anything, it’s doubly difficult in healthcare, where the Affordable Care Act also added even more stringent patient information privacy requirements.

One of the less-noticed provisions of President Barack Obama’s Affordable Care Act was a requirement that health insurers provide customers with an up-to-date list of providers in its network.

That sounds simple enough, but it isn’t.

It’s actually so complex that it was considered a low-hanging fruit for the still-fledgling blockchain industry’s aim of creating industrywide blockchain projects in which competing companies would work together.

The thing is, there are a lot of doctors, pharmacists, laboratories, MRI providers, and the list goes on and on. They move offices, join new practices, get new credentials, retire and — most notably — change the list of insurance providers they work with and the plans they accept from those insurers on a regular basis. What they don’t do is make informing insurance providers of changes a priority.

That makes keeping the legally-required and fine-enforced lists up-to-date a very time consuming and expensive process — $2.1 billion annually, according to industry estimates. It’s an important one for customers, too. Choosing an out-of-network doctor or hospital can be a bankrupting mistake.

Enter blockchain. Or more specifically, enterprise blockchains — which, unlike Bitcoin, Ethereum and most of the other blockchain projects you’ve heard of, is not open to the public. You have to be invited to upload information or make transactions on it.

Related: Crypto Basics Series: What’s a Permissioned Blockchain and How Does Centralized Decentralization Work?

And even more specifically, enter the Synaptic Health Alliance, which launched a pilot project in April 2018 to create a joint provider database where any partner could update information for all involved. It’s a big enough issue that members include industry leaders like insurers Aetna, Humana and UnitedHealth Group, provider network MultiPlan and medical testing firm Quest Diagnostics.

“A decentralized approach to exchanging information allows companies to avoid building duplicative point-to-point connections,” Humana spokesperson Mark Taylor told Managed Healthcare Executive in February.

It remains a work in progress and “will take a significant effort to make a change of this magnitude, given the complexities of the healthcare ecosystem,” he said. “But the possibility is there.”

COVID-19 Drives Progress

In December, The Lancet, a U.K. medical journal that is among the most respected in the world, published a systematic review of “Blockchain Applications in Health Care for COVID-19 and Beyond.”

While most were still in the testing or pilot phase, the researchers concluded that there is “a strong foundation for blockchain as an enabling platform for a broad spectrum of health-care applications, both during and beyond the COVID-19 pandemic.”

Among the most promising in the long term were vaccine and pharmaceutical supply chain management, contact tracing and telemedicine, it added. One of the examples was a proposal to use know your customer (KYC) tokens on the Stellar blockchain as health and vaccination certificates.

A month earlier, a U.S. National Institutes of Health article described the successful test of an Ethereum-based decentralized application (DApp) platform to track and authenticate COVID-19 vaccine vials using smart contracts to monitor the supply, a proof-of-delivery consensus mechanism and a feedback feature to track any side effects.

Other examples include the Intelligent Tumor Treatment Center in China’s Renji Hospital launching a lifecycle management system tracking the hospital’s full tumor treatment process in the hospital on the VeChain blockchain. The same protocol was used by Bayer China to launch Csecure, a platform to capture and track clinical trial supply chain data.

In October, Pharmacy Times reported that Oceasoft, a producer of atmospheric monitors for supply chains, and Chronicled, a blockchain and Internet of Things (IoT) supply chain firm, were working together to collect data like CO2 levels, temperature and humidity so that “the integrity of the supply chain can be monitored by buyers and sellers.”

Aside from synchronized, secure and immutable record keeping, smart contracts could be used to make automatic payments in the event of atmospheric events that damage products.

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NEW PYMNTS DATA: THE TAILORED SHOPPING EXPERIENCE STUDY – MAY 2022

About: PYMNTS’ survey of 2,094 consumers for The Tailored Shopping Experience report, a collaboration with Elastic Path, shows where merchants are getting it right and where they need to up their game to deliver a customized shopping experience.

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