This is a summary of the master thesis “Navigating between reality and possibility: an assessment of blockchain’s potential for the Dutch healthcare sector”

by Martijn Piek

MSc Sustainable Business and Innovation, Utrecht University

For my master thesis, I assessed blockchain’s potential for the Dutch healthcare sector. In the Dutch healthcare sector, many transactional inefficiencies exist for healthcare stakeholders who want to share information. Blockchain applications enable more efficient transactions and interactions between different entities and may transform the healthcare sector into a more efficient system. My thesis identified factors and elements that might hinder blockchain’s development and implementation and was guided by the following research question: What are the drivers and barriers to the implementation of blockchain technology in the healthcare sector, based on the perspectives of healthcare stakeholders?

In the first phase of the analysis, blockchain experts, including technology developers, consultants, and project managers were consulted to identify visions for medical blockchain applications. Subsequently, Dutch patients articulated benefits, disadvantages and specific concerns regarding the envisioned blockchain applications. Next, other relevant healthcare stakeholders, including health insurers, policymakers, healthcare providers, pharmacists and lawyers further identified the positive and negative effects of the articulated blockchain applications. The results provide insight into desirable directions for future medical blockchain developments, how blockchain applications are envisioned to be used in the healthcare system and their positive and negative impacts on individuals, the healthcare sector and society.

Three visions were identified in the analysis: first, blockchain technology may transform the healthcare sector into a more efficient system. Blockchain allows peer-to-peer exchange between healthcare stakeholders and holds the potential to cut out numerous middlemen involved in the Dutch healthcare sector. Blockchain applications can contribute to more streamlined claims adjudication, more efficient credentialing of employees and faster insurance enrolment. Additionally, blockchain can be connected to the Internet of Things (IoT) (e.g., smart sensors and devices measuring and monitoring patients at home), and can prevent duplication of services and contribute to more effective treatment of patients.

Second, blockchain can contribute to more security in healthcare, as it can be used to track resources. Currently, supply chains of pharmaceutical products are complex, with medical products changing ownership from manufacturers to distributors, repackagers and wholesalers. Blockchain could be used to track the origin of a pharmaceutical product, and all used materials (e.g., quality, quantity and ownership) over its supply chain. Increased data provenance can fight the counterfeit drug problem and enhance the quality of medicine for health consumers. Blockchain also unlocks the possibility for real-time intervention as transactions are publicly recorded in the network.

Last but not least, blockchain, when connected to IoT, allows for a more personalised treatment and provides users with more control over their healthcare. Electronic health records (EHRs) have a siloed nature and are controlled by a few large institutions and private companies. When different healthcare providers are connected to the blockchain, complete, precise and transferable EHRs of patients can be created. Because patients can record and manage their consent on the blockchain, health data can stay secure, allowing the patient to manage data confidentially. Moreover, blockchain enables patients to be financially rewarded with tokens in exchange for their health data. For example, when researchers want to use patients’ data for their studies.

The desired blockchain applications promise revolutionary changes for the Dutch healthcare sector. However, their implementation requires extensive coordination among healthcare stakeholders. Therefore, it may take years before the articulated blockchain applications can be successfully implemented in the Dutch healthcare sector. The consulted healthcare stakeholders articulated concerns and barriers that have to solved before the deployment of blockchain. These factors and elements were categorised as technical, organisational and societal barriers.

The technical barriers concerned the lack of evidence for blockchain’s added value and the non-interoperability of current IT-systems. Current blockchains have a scalability issue and are therefore not suited for storing large EHR files (e.g., MRI files of 10MB). EHRs can be saved ‘off-chain’ with links to the data on the blockchain. The added value of blockchain in these scenarios is questionable. Furthermore, interoperability between healthcare providers’ IT systems needs to be achieved before blockchain can be useful. Open standards and application programming interfaces (APIs) for IT traffic are required to accomplish congruent syntax (grammar) and semantics (logic) between healthcare stakeholders.

The organisational barriers involved privacy and security regulations and the incumbent power of large software suppliers. Health data is highly regulated, and the use of public, or open, blockchains (e.g., Bitcoin) conflicts with the General Data Protection Regulation (GDPR). Permissioned or private blockchains (e.g., Hyperlegder) do not necessarily conflict with the GDPR because data is only accessible by participants in the network. Permissioned and private blockchains are, nevertheless, more sensitive to data breaches. Additionally, most health data are currently controlled by large private software companies (e.g., EPIC and ChipSoft) that rather hinder than cooperate with new innovations. These companies have a dominant position in the industry and will not feel incentivised to work with blockchain because it may disrupt their power and revenue streams.

On a societal level, concerns were raised about blockchain’s hype cycle, the conservative attitudes of healthcare stakeholders, the possible loss in jobs and misconceptions by potential users. Regarding the blockchain hype, blockchain has become ‘a sledgehammer to crack nuts’, and its expectations might not live up to the technological possibilities. Besides, the risk-averse attitude of healthcare providers and health insurers, and the lack of bottom-up incentives from patients, limit blockchain’s diffusion. Other resistance can be expected from healthcare stakeholders as jobs may disappear through automation facilitated by blockchain.

The identified barriers indicate that the blockchain-led transformation of the Dutch healthcare sector may still be many years away. Blockchain does not appear to be a desirable solution for the Dutch healthcare sector at this stage but holds potential for the future. At this moment, private and permissioned blockchains are suited for medical blockchain experiments. The blockchain hype has become a relevant driver for healthcare stakeholders to engage in such experiments. The concerns about blockchain’s hype are primarily reflected in the observation that many of these blockchain PoCs have not evolved into successful pilots. For blockchain to become a more mainstream instrument, more PoCs need to grow into successful pilots.

Many blockchain initiatives strand because innovators realise, after experimenting with blockchain, that it is a rather complicated and expensive solution for creating a shared database compared with conventional technology. The learning process for healthcare stakeholders engaging in these initiatives is still valuable, however. First of all, healthcare stakeholders have learned what works and what does not. There is a good chance that experiments continue using other technology, still ultimately leading to more integrated IT applications. More IT integration, in turn, will gradually transform the rigid Dutch healthcare sector into a more efficient and sustainable system.

Moreover, blockchain technology is advancing rapidly. Standards (e.g., ERC20 and ERC721) will make transactions, logic and data models fit with each other by design. These developments may provide blockchain participants access to networks and full-fledged token economies that span geographies, sectors and use cases. In these networks, entities can transact and interact without having to set up a separate blockchain infrastructure for every network or use case. Consequently, the investments made in, and lessons learned from, private or permissioned blockchain experiments may provide the possibility for future applications that are genuinely impossible without blockchain.

Are you interested in more details about this Master Thesis, reach out to the author directly via the provided links below.