Blockchain in Healthcare; No Crypto Winter Here, it’s Full Steam Ahead

Healthcare is emerging as an early and ambitious adopter of blockchain and AI technologies. Long a laggard in operational technology adoption, the industry is discovering that blockchain is particularly well suited to this highly fragmented and regulated industry. The industry is beginning to examine how blockchain can serve as a common data exchange platform between providers, payers, patients, suppliers, researches, and public health institutions. These platforms can then be integrated with Artificial Intelligence (AI) and IoT. Use cases for the credentialing of healthcare workers, solving stubborn medial supply chain problems, and automating claims processing is moving from lab to implementation. In addition, several institutional alliances of large providers, payers, pharma, and technology companies are forming around the globe.

As cryptocurrencies are struggling to pull out of a self-proclaimed crypto winter, technologists are busy refining blockchain mechanics and partnering with industries to develop solutions that will soon have a visible and measurable impact. The outlines of a more robust blockchain enabled infrastructure are forming and healthcare is emerging as a promising leader in adaption.

Soon, new blockchain innovations will result in dramatically improved throughput and transaction speeds, reduced fees and more refined governance models that will accelerate adaption. The deployment of digital technology in healthcare can provide insights for other industries searching for guidance from this nascent technology.

Blockchain in Healthcare Trends

Healthcare is one of the beneficiaries of the digital pairing of AI with blockchain. The coupling of these two is a powerful tool that is not only adding a new level of functionality to big data analytics for healthcare research but also to streamline an inefficient claims resolution process and build a safer more reliable medial supply chain.

Stronger Together; The Combination of AI and Blockchain to Form New Healthcare Solutions is Increasing.

It’s worth noting that AI refers to several technologies such as:

Deep Learning and Robotic Process Automation- support business processes through the use of scripts and intelligent agents to assist rather than replace human processing.

Natural Language Processing (NLP)- uses and supports text analytics by facilitating the understanding of sentence structure and meaning, sentiment, and intent through statistical and machine learning methods.

Decision Management-is an engine that inserts rules and logic into AI systems and is used for initial setup/training and automated decision-making.

Blockchains can serve as the common data conduit that adds a layer of trust, attestation, provenance, and security to data and as a result, can be accessed by AI tools for advanced analytics, intelligent processing, and machine learning systems. Permissioned blockchains can also be used as an access point for AI agents to perform operations and return results back to the blockchains.

Blockchain and AI as an Enabler of Process Automation.

The processing of healthcare claims by providers and payers has traditionally been an expensive, time consuming and frustrating process for consumers and Healthcare institutions alike. Healthcare claims processing costs are estimated upwards of $500 billion. A claim requiring human intervention has been estimated to cost up to $118 on average. Recent work by Endjinn from ConsenSys to use deep learning and other AI tools to develop an automated agent that quickly learns from a human claims agent how to process claims through voice and text interaction. The AI agent named Jann can be accessed via a permissioned private blockchain, thereby enabling faster deployment and a secure processing channel that is architected to maintain patient’s sensitive data. The AI agent Jann, paired with a human claims agent can code and process claims in a fraction of the current time and cost.

Digital Automation Can Solve Difficult Multi-Party Processes and Work Alongside Humans as a Tool Rather Than a Replacement.

Instead of replacing human processors, the automated agent named Jann learns from and works with the human processor, who then acts as a supervisor to the AI agent’s work. Although the first use case for Endjinn is claims processing, it will soon be deployed in other manually intensive processes.

Forming Alliances

Blockchains creates an opportunity for competitors to cooperate by sharing data into large pools for insightful analytics as well as a means to reduce processing costs while at the same time continuing to compete as providers and payers of care.

The Emergence of the Blockchain Consortiums and Coopetition.

Blockchain technology can be especially effective in facilitating consortiums of institutions who share or pool certain sets of data to solve difficult process bottlenecks and or provide reliable analytical insights. Large providers and payers are forming alliances and pooling resources in order to solve common problems while at the same time continuing to compete in other areas, thereby moving from pure competition to coopetition.

The incentives to form new alliances has never been greater as healthcare costs are spiraling higher and at the same time technology advancements are converging to create new opportunities for efficiencies and improvements in care.

Blockchains are an Enabler to Big Data Research in Public Health and Disease Research.

The opportunity for analyzing population health data on a national and global scale has been limited by the data silos maintained by most healthcare organizations. Protecting patient privacy, security concerns, competition and a lack of trust between parties have reinforced the retention of data silos. The blockchain is addressing these concerns by providing an immutable record of truth while adding a layer of trust and transparency in a new-shared data environment. In this case, AI tools now have greater access to larger sets of data in the shared environment.


Humana, United Health Group, Atena and Ascension have teamed up with two technology companies Multiplan and Optum to form the Synaptic Health Alliance to explore how blockchain technologies that modernize healthcare services.

Recently corporate and tech giants JP Morgan Chase have teamed up with Amazon and Berkshire Hathaway to initiate a fresh look at how to utilize technology to deliver healthcare while controlling spiraling costs.

Aetna fresh off its acquisition from pharmacy giant CVS, announced it’s joining the IBM Health Utility Network blockchain healthcare initiative which is seeking to improve the way sensitive data is shared, how healthcare transactions are processed and all within the framework of a blockchain-based ecosystem. They are joining the alliance along with existing members Anthem, (one of the US’s largest health plan provider), Health Care Service Corporation (the largest customer-owned health insurance provider in the U.S.) and PNC Bank. These providers combined, account for close to 100 million healthcare plans. IBM plans to include other health organizations, healthcare providers, startups, and technology companies. According to IBM, all alliance members are granted an equal stake as these competitors work side by side to go after the tremendous amounts of waste in the healthcare system.

Blockchain, AI and IOT Combine to Create a New Digitized, Intelligent Supply Chain that Solves Many Stubborn and Difficult Tracing Related Issues.

Counterfeit Medications

The WHO estimates that around 10% to 30% of medicines and 8% of medical devices are counterfeits with a total annual value of more than $200 billion. Interpol estimates that the counterfeit business has grown ninefold in volume between the years of 2011 to 2014.

According to the recently implemented Drug Supply Chain Security Act (DSCSA), every drug package is required to be serialized or barcoded with a unique product identifier. Europe has a similar regulatory enactment called the Falsified Medicine Directive (FMD). The intention of these regulations is to facilitate the verification of and authenticity of every product sold.

The MediLedger Project-a US-based consortium is building an industry-owned permissioned blockchain network specifically developed for the pharmaceutical sector based on open standards and specifications. In October of last year, the organization launched a directory and verification routing service for saleable returns. Every year 3–7% of all medications in the USA are returned to the manufacturer to balance inventories. The medications can then be re-sold by the company if they can verify its authenticity.

Blockchain can assist in ensuring compliance of environmental storage standards in the supply chain. Many medicines must be stored at a specific temperature, air quality and humidity levels to maintain their efficacy. Vaccines are particularly vulnerable to spoilage if recommended environmental conditions are not maintained.

An estimated 20% of all vaccines globally spoil due to improper exposures during shipping and storage. In some cases monitoring devices are used (IoT) that tracks temperature and humidity levels as products move through the supply chain. However, data is often not shared as it moves between manufacturers, transporters, and suppliers.

Novartis is currently engaged in a consortium network between the European Pharmaceutical Industry and the EU, called the Innovative Medicine Initiative (IMI)- A blockchain enabled healthcare program. IMI is the world’s largest public-private partnership in health with a total budget of €5 billion through EFPIA and under Horizon 2020. The consortium comprises SME blockchain companies, universities, clinical labs, hospitals, patient representatives and others; and aims at exploring use cases in counterfeit drug detection, supply chain, patient data, and clinical trials.

Unused Medicines

Estimates of prescription medicine waste in the USA are staggering, especially coming from nursing homes and the terminally ill. An estimated 20% of all perfectly good medication used in US nursing homes is thrown away. Safe disposal of unused medications is also an issue as much of these potentially lethal medicines are often flushed into the water supply or thrown in the trash with unknown consequences on the environment. The US Environmental Protection Agency estimated in 2015 that about 740 tons of drugs were wasted by nursing homes each year. Researchers from the Center for Health Policy and Memorial Sloan Kettering analyzed the waste generated by the top 20 selling cancer medicines and concluded that insurers paid drug makers $1.8 billion annually on discarded quantities.

On the other hand, there are countless millions of people around the world that are unable to afford proper drug treatments. According to a study from the University of North Carolina, 20% of cancer patients in the USA can’t afford their prescribed chemotherapy therapy.

Blockchain Can Help Manage Supply Chain Post-Sale, Reducing Waste and Manage Disposal, While at the Same Time Assisting Those in Need.

Good Shepard Pharmacy, a startup based in Nashville, Tennessee is using blockchain technology (RemediChain) to manage donations of unused chemotherapy medication mostly from families of deceased patients and redistribute them to those in need at little or no cost. The potential to scale similar projects globally can have a meaningful impact. This is an important example of how blockchain can be used to facilitate donations to those in need.

Digital technologies are starting to change the healthcare landscape. Institutions previously use to operating in competitive silos are now forging new alliances, often partnering with technology companies in efforts that will likely reshape the industry. Blockchain and AI tools are the common infrastructure and technology for many of these new alliances. As the alliances mature and adaption increases coopetition will emerge as an important dynamic that can inform other industries and contribute to the development of the entire blockchain/AI ecosystem.

Blockchain in Healthcare; No Crypto Winter Here, it’s Full Steam Ahead was originally published in Data Driven Investor on Medium, where people are continuing the conversation by highlighting and responding to this story.