Opportunities and Challenges of Blockchain Technologies in Health Care
Opportunities and Challenges of Blockchain Technologies in Health Care
Opportunities and Challenges of Blockchain Technologies in Health Care
December 2020
Key Findings
Blockchain is a relatively new technology for managing electronic data that has the
potential to support transparency and accountability. A blockchain is a ledger of
transactions where an identical copy of the ledger is visible to all the members of a
computer network.
Hype surrounds the potential of blockchain technology in the health sector and its
usefulness can be overstated. Most published research on the use of blockchain in the
health sector presents theoretical frameworks, architectures, or models with few technical
details. There is seldom a prototype or pilot implementation to learn from. Deployment of
blockchain technology in health at a national scale is rare.
To meet information needs and policy goals, blockchain should be deployed where it is
best suited and in combination with other technologies within a well-governed health
information system.
Further, storing personal health data ‘on chain’ and thus, by definition, visible to other
network participants, is a data privacy infringement. Rights under the EU General Data
Protection Regulation, particularly the right to erasure, are incompatible with the
immutability of blocks in a chain.
Introduction
Blockchain is a technology designed to manage electronic data that has the potential to support
transparency and accountability. A blockchain is a ledger of transactions where an identical copy is visible
to all the members of a computer network. Network members validate the data entered into the ledger;
and once entered, the data are immutable (OECD, 2020). Blockchain was originally developed for
cryptocurrencies to eliminate the need for intermediaries, such as banks, while protecting against a high
risk of fraud and theft.
In the health sector, there are transactions where transparent and immutable record keeping may also be
important, such as purchasing and shipping transactions in supply chains for medical equipment and
pharmaceuticals; and tracking permissions and access of personnel to facilities, medical records or other
health data. Questions for policy makers include, to what degree is blockchain necessary to preserve the
integrity of these transactions? Do its costs and benefits compare favourably against alternative
technologies, such as a traditional, centrally-managed, database?
While well-established systems for assessing pharmaceutical innovations exist, there is no equivalent for
other types of innovations, including digital solutions. Often there is asymmetry of information between
software vendors and purchasers that can place health systems at a disadvantage. This is particularly
problematic for blockchain-enabled solutions, because there are few practical applications of the
technology in real-world health care settings to learn from.
This policy brief aims to support health policy makers in evaluating blockchain solutions by explaining (1)
what is meant by blockchain technology, and its advantages and limitations and (2) emerging and potential
uses in the health sector and the policy considerations in deploying it.
There is no single ‘blockchain’ just as there is no single database. Rather, there is a range of
different ways to deploy the blockchain concept, with different features and operating costs.
Most blockchains have an ‘append only’ structure. This means that the blockchain allows new
data to be entered but, once a block has been added, it cannot be edited or deleted by any of
the participants. This ‘append only’ structure ensures the consistency and validity of each
participant’s copy of the blockchain, and allows participants to validate each new block
appended to the chain.
Each time a user enters a block into the chain they must record information about the transaction
into a cryptographic hashing algorithm that produces a code (a set of letters and numbers) that
is distinct to that transaction (OECD, 2020). If any part of the data block were later changed,
then the hashing algorithm would produce a different code that would be incompatible with the
rest of the codes in that blockchain and would alert members of the network to a potential case
of data tampering. The degree of difficulty in tampering with blocks rises with the number of
participants in a blockchain network because a successful attack would require hacking into
many copies of the distributed ledger to change them all simultaneously (Miles, 2017).
Public blockchains for cryptocurrencies, where anyone can join the network and participate in it
anonymously, are known for high operating costs and energy consumption. For example, a
single bitcoin transaction is estimated to use 718.53 kWh of energy, which is as much energy
as an average US household uses in 24 days (Digiconomist, 2020). A reason for the high cost
is that public blockchains use ‘mining’ to validate new blocks of data to be entered into the
ledger. Miners are network nodes that compete to validate blocks and are rewarded financially
for doing so. For a cryptocurrency, they are checking a new block against past blocks to ensure
that a bitcoin sender isn’t trying to spend the same funds twice. Results of the mining allow the
network to reach a consensus to publish the block to the chain. The average bitcoin transaction
involves several confirmations from miners that the block can be published and can take from
10 minutes to a day or more to complete (Tuwiner, 2020). This approach to reaching consensus
to add blocks is also called ‘Proof of Work’.
Private blockchains, where nodes entering blocks are authorised and known to one another,
may not need to rely on ‘Proof of Work’ methods to validate the data. For example, a private
network of authorised users of a health authority’s blockchain could agree to use other
consensus rules to validate the data and resolve any discrepancies or conflicts, such as ‘Proof
of Authority’ which assigns validation responsibilities to certain network nodes or ‘Byzantine
Fault Tolerance’ which is where a block is published after a sufficient number of nodes vote to
do so, even if some fail to vote (EY, 2019).
In a blockchain, data such as a sales transaction record or a medical record are stored in blocks. When
the data to complete a block have been entered, the block is added to the chain of previous blocks and a
new block is created for the next data entry. Blockchains are decentralised and can have an unlimited
number of participants in a network, such as a global network of vendors and purchasers of medical
equipment. All participants in a blockchain have a full copy of the blockchain, which is continually updated
and synchronised as new blocks are added. A node is a computer/device that stores or provides access
to a copy of the blockchain. All the records in a blockchain are visible to all the participants in the blockchain
network.
While all blockchains have these features, there are many ways to deploy them. Blockchains may be public
and open to anyone to participate anonymously, such as a cryptocurrency blockchain, or the they may be
private, where network members uploading blocks of data are authorised to do so and known to the
members of the network (Box 1).
1
As electronic health records can be very detailed, re-identification attacks can be successful.
Figure 2. Most research papers on blockchain in health care describe proposals, not solutions
30
25
20
15
10
0
2015 2016 2017 2018 Total
Proposals Solutions
separate electronic logs. Suspicious access can be verified quickly, and potentially malicious, systemic
action prevented. Like CCTV in high crime-risk locations, the blockchain doesn’t intervene when a
transgression occurs. Rather, the visibility (transparency) and inability to interrupt or amend the signal of
the recording (immutability) is a deterrent.
Notably, the transactional footprint of these instructions, which contains only a catalogue of health records
and metadata, is tiny compared to the actual health information that are stored off-chain (Vazirani, 2019).
This highlights how, as with most digital innovations, blockchain is most useful when it is applied in
combination with other technologies within a health information system.
Jeju Island, a tourist destination in South Korea, announced they are deploying a blockchain-
enabled solution to support contact tracing visitors to the island who test positive for SARS-
CoV2. Visitors to the island will be required to download a smartphone app and use it to scan
the QR codes of businesses and services they access while on the island. When users first
download the app, their identity is confirmed via a public blockchain that issues a certificate. A
digital fingerprint authentication and PIN code is then set up by the app user on their smart
phone and a certificate for those credentials is recorded within a private blockchain. Both
certificates are stored on the app user’s phone. App user’s personal identifying information is
stored separately from the record of businesses and services they have used. The app user’s
data will remain private unless they are required for contact tracing a case of COVID-19.
Source: Blockchain News, 2020
provider creates a record, it is verified, and the patient authorizes its viewing permissions. The party
receiving new information receives an automated notification, and an encrypted pointer to the new medical
record. Permissions are stored on the chain. This system allows patients to access and control their data.
So far, it has been successful with medications, blood tests, vaccination histories, and other therapeutic
interventions.
A trustworthy record of data ownership is the goal of RadBit, which allows patients to keep possession of
their medical images along with an immutable chain of custody (Nichol, 2017). Temporary keys (“tokens”)
can be created by users of the blockchain and passed on to health care providers and insurance
companies, providing them temporary access. The token is independent of the data, containing only
authorization commands, and is verified and validated by adding them to the chain, triggering the dispatch
of required reports. Potential ways to improve the integrity are to use blind signatures, which reinforce
protection from tampering as well as confirming the sender’s and viewer’s identities, or to use signatures
from multiple authorities.
Blockchain technologies for patient consent and permissions for data sharing and access are being
deployed to improve recruitment and retention as well as patient and participant empowerment in
biomedical research (Dubovitskaya A, 2019). Two notable blockchain-backed efforts in the pharmaceutical
ecosystem are the Innovative Medicines Initiative (IMI) Blockchain Enabled Healthcare (IMI 2018) Project
and the Pharmaceutical Users Software Exchange (PhUSE) Blockchain Project.
Blockchains could be used as a secure way to control the flow of personal data in the recruitment of
participants to clinical trials (Angeletti F, 2017). A blockchain may protect the interests of both the individual,
who can keep their data private until an agreement is reached, and the research team, which can trust that
it is acquiring useful and authentic data.
A new blockchain application called Research Foundry has emerged to enable management of consent
and permissions for the sharing of and access to health data, metadata, software code and other products
connected with health research, including research related to the COVID-19 pandemic (Burstiq, 2020). It
aims to facilitate cross-border collaboration in a way that ensures participants remain in compliance with
applicable data privacy law. In this solution, network nodes control what data they wish to make visible to
other participants. For example, metadata about a data repository may be shared with all participants while
the health data repository remains private and not visible to the nodes on the blockchain. When there is
an agreement to share all or part of a repository with other specific nodes then the sharing can be
facilitated. The technology provider cannot access the private data repository without the explicit
permission of the data owner.
policy goals it should be deployed in combination with other technologies and a robust health information
system and data infrastructure which, working together, provide the optimal solution to meet health
information needs.
Hype surrounds the potential of blockchain technology in the health sector and its usefulness can be
overstated. Blockchain doesn’t remove the most challenging obstacles to the digital transformation of the
health sector, such as a lack of data interoperability, and it doesn’t replace the need for health data
governance.
While blockchains do not need a central authority to hold data, they do not remove the need for any
authority at all. Given the nature of the health sector and that its data are often personal and sensitive,
blockchain applications will rely on regulation and oversight as well as standards and protocols. The
consensus system for governing any blockchain is not based on technology but requires an agreement
among participants.
With multiple actors and participants, a trusted body to make the rules (or, more accurately, the ‘rules that
set the rules’) will always be needed. This can be the government, or an established agency or institution.
For example, Standards Australia led the development of a road map of priorities to help establish common
terminology for blockchain-enabled technologies (Standards Australia, 2017).
The cost of development and implementation of technologies is a key consideration for policy makers.
Evidence from Estonia, where blockchain technology has been deployed in the national health system,
suggests that the direct costs in terms of technical development and implementation are modest. Once the
core architecture is developed, additional applications may be added at a lower cost. As with any
technological transition, most costs are incurred to change processes, workflows and behaviours to ensure
that the technology will be used as envisaged. Of course, operational costs will depend on the efficiency
of the blockchain design and minimisation of the volume of data stored ‘on chain’.
Blockchain represents a significant departure from the traditional notion of data management and storage
and stakeholder communication is very important for the successful deployment of the technology. Training
and education of the health workforce would be needed to ensure its effective and efficient use. When the
technology is deployed to enable patients to have greater control over and access to their data, successful
implementation will rely on public consultation and information to educate patients on how to access the
technology and their rights and responsibilities.
The immutability of blockchains can be a doubled-edged sword. As it stands, the metadata stored on a
blockchain that pertains to an individual’s health record cannot be erased. While information stored off-
chain can be deleted, the record that the information previously existed cannot be removed from the chain.
This information can be potentially sensitive and a legal question arises whether the metadata counts as
personal health data (Panel for the Future of Science and Technology, 2019). The field is rapidly evolving
and technological solutions to address this problem may be found, such as masking blocks associated
with a specified signature.
While blockchain-based ledgers are inherently secure and tamper-proof in terms of the data they contain,
this does not ensure that the data entered are correct or of sufficient quality. In addition to user error, there
is also potential for malicious actors to influence individuals’ decision-making regarding consent and
permissions to use their data. This risk is particularly important within ageing populations with growing
numbers of people who are physically and cognitively vulnerable. Blockchain cannot manage this risk; only
governance, regulation and enforcement can.
Given its central role in helping to manage health data (including sensitive, personal health data), an
assessment of the use of blockchain in the sector is best approached within the framework provided by
the Recommendation of the OECD Council on Health Data Governance (OECD, 2019). This concerns not
only the mechanisms concerning privacy, security and consent but also those dealing with communication,
engagement, education and the fostering of trust among stakeholders.
Four principles should assist policy makers with implementing blockchain technology in health.
1. Fit-for-purpose. Blockchain is an enabling, general-purpose digital technology. It should be
evaluated on its merits and applied where it is the best application for the problem at hand, after
comparing it to alternative solutions.
2. Governance and regulatory alignment. Blockchain-based solutions have particular features that
must be evaluated in terms of the compliance of the solution with laws, regulations and data
governance frameworks.
3. Incremental integration. Blockchain-enabled solutions should be considered in relation to existing
systems and technologies. Blockchain should complement and leverage existing systems and be
tested incrementally in a controlled environment before large-scale implementation.
4. Education, awareness and user-based design. Blockchain requires a new way of thinking about
data and information. Users of this technology, including patients and the public, must be educated
regarding the features of this technology and the implications of its use for data ownership, access
and privacy.
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Acknowledgements
This report was prepared by Jillian Oderkirk and Luke Slawomirski of the OECD Health Division as part
of the 2019-20 Programme of Work of the OECD Health Committee which supports countries in
strengthening health data and their governance. For more information see www.oecd.org/health/health-
systems/health-data-governance.
Members of the OECD Health Committee provided input and guidance. Stefano Scarpetta, Mark
Pearson and Francesca Colombo provided advice and feedback. Pamela Duffin provided editorial and
communications support.
This report contributes to the work of the OECD Blockchain Policy Centre which provides a global
reference point for helping policy makers to address the challenges raised by blockchain and DLT and
to seize the opportunities it offers for achieving policy objectives. For more information see
www.oecd.org/daf/blockchain. It also contributes to the OECD Going Digital Project which provides
policy makers with tools to help economies and societies prosper in an increasingly digital and data-
driven world. For more information see www.oecd.org/going-digital.
This paper is published under the responsibility of the Secretary-General of the OECD. The opinions expressed and the arguments employed herein do
not necessarily reflect the official views of OECD member countries.
This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation
of international frontiers and boundaries and to the name of any territory, city or area.
The use of this work, whether digital or print, is governed by the Terms and Conditions to be found at http://www.oecd.org/termsandconditions.