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Will blockchain revolutionize the way we approach health-care security?

04/16/2018  |  By: Mark Burnette, CPA, CISSP, CISM, CISA, CRISC, CGEIT, ITIL, QSA, Shareholder, Information Security


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Here's what you need to know about how cryptography-based technology may affect the health-care industry.

Let’s address some of the most common questions we’ve received regarding blockchain and its impact on the health-care industry.

What is blockchain?

At its core, blockchain is a distributed system for recording and storing transaction records. More specifically, blockchain is a shared unchangeable record of peer-to-peer transactions built from linked transaction blocks and stored in a digital ledger.

Blockchain users can only update the “block,” or transaction record, to which they have access. Once a user submits an update request, the participating parties run algorithms to evaluate the proposed record update. Once approved, those updates get replicated across the network.

In this way, interactions with the blockchain are known to all participants and require verification by the network before information is added or replicated. All entries are time- and date-stamped, which provides a detailed audit trail of all interactions. The data is encrypted, unchangeable and is up to date on all participants’ systems.

How could blockchain revolutionize the health-care industry?

Since records are spread across a network of replicated databases, blockchain provides a new degree of potential security benefits for the massive amounts of data that health-care organizations are responsible for managing, as well as a variety of opportunities for enhanced medical research and simplified financial management.

One specific benefit that would come with blockchain implementation is enhanced data interoperability and security. In the absence of a national patient identifier, blockchain could be a great mechanism for keeping individuals and their records together. Because blockchain validates and stores data in patterns that can’t be modified, it has the potential to be a key component of the infrastructure that is needed to keep health data up to date, private and secure while facilitating the ability to share information with appropriate parties (like a health-information exchange). It can also further enable the benefits of connected medical devices.

This new level of interoperability could help providers eliminate some information technology challenges associated with providing exceptional patient care across the health-care ecosystem in a cost-effective manner.

And when it comes to fraud prevention, blockchain-based systems can help minimize Medicaid fraud — which was responsible for more than $30 million in losses in 2016. For example, proactive monitoring of the patterns that cyber criminals use could inform fraud detection systems that rely on machine learning to continually improve their sensitivity.

What are the challenges?

While blockchain technology could be a catalyst for change in the health-care industry, there are a couple of challenges to keep in mind, like transitioning from current systems. One of the main obstacles to implementing blockchain technology to manage patient data is the fact that data is already being managed by current systems. So blockchain technology would require a complete change from centralized high-entity-controlled systems to distributed, open and potentially worldwide systems.

A lack of buy-in from doctors and nurses presents another challenge, since a transition to any new system, regardless of whether blockchain is involved, requires buy-in from the stakeholders — and a doctor’s first response to a new product is often very cautious. For good reason, providers are hesitant to make any changes that could have a negative impact on the efficiency or effectiveness of patient care. Educating stakeholders on the benefits of the new system and the blockchain capabilities (beyond the obvious security enhancements) will be key to getting their buy-in when the time comes.

Blockchain is fast becoming a familiar word in business vernacular. It will be interesting to watch as companies collaborate to develop blockchain-based systems and jockey to position them within the health-care industry as potential solutions. Savvy leaders will keep a close eye on this technology and its impact on the IT world, and they should seek to stay on “top” of the chain.

Mark Burnette, CPA, CISSP, CISM, CISA, CRISC, CGEIT, ITIL, QSA, shareholder, LBMC Information Security, is an expert on blockchain technology. Reach him at 615-309-2447 or