How blockchain is impacting the healthcare market
The healthcare market globally is estimated to be worth $7,975.87 billion in 2023. To give one some perspective of the importance and size of the healthcare market, it accounts for almost 18% of gross domestic product (GDP) in the US compared to the financial services sector which accounts for 7.4% of GDP. In the UK in 2021, the healthcare sector accounted for 11.9% of the country’s GDP compared to the financial services sector which accounted for only 8.3%.
Health expenditure as a percentage of GDP in 2021
Blockchain technology has many challenges to overcome before its adoption becomes more widespread. However, what most commentators do agree on is that the technology can bring greater transparency and therefore trust, which is key for the healthcare industry when literally making life or death decisions. Little surprise then that the technology is being increasingly used in this industry. Reports show that funds being spent on blockchain technology in the healthcare market was expected to reach USD 1.97 billion in 2022. However, more impressive is that it is predicted to grow by over 68% p.a. by 2030. With the growing need for data privacy, transparency and security, blockchains are steadily being adopted by both healthcare and pharmaceutical providers and organisations. Since 2021, the global Blockchain Technology in Healthcare market size was valued at USD 7262.11million and is expected to expand by 33.68% p.a., reaching $41.4billion by 2027. Meanwhile, problems currently facing the global healthcare and pharmaceutical industries include access to affordable healthcare, the high cost of healthcare and antibiotic resistant drugs (due to re-use and overuse), research and development issues of new drugs and treatments, healthcare infrastructure, and intellectual rights. Players in the industry such as Hashed Health, Medicalchain, Amgen, Proof.Work, Pzifer, Novartis, Blockpharma, etc., are all working in various ways to tackle these challenges. Furthermore, different drug development applications are being created on the public, private and consortium blockchain-powered platforms to address drug authenticity, data management and discovery, vaccine distribution, intellectual property and health record management. With this in mind, the impact of blockchain technology on the global healthcare market is explored in the following applications:
One of the most significant impacts of blockchain on healthcare is in data management. Blockchain can securely store patient data, including electronic health records (EHRs), and enable healthcare providers and patients access to it in a decentralised manner. This ensures that the data is accurate, secure and private, making it easier for healthcare professionals to provide more effective treatments. For example, the Illinois Blockchain Initiative is studying ways to use blockchains for storing details about birth and death certificates, so creating a secure and tamper-proof platform for retaining and sharing vital records.
Blockchain is also transforming the healthcare industry by enabling patients to maintain more control over their health data. With blockchain, patients can choose who is able to access their medical records and, furthermore, affords these patients permission for healthcare providers to access the data. This allows patients to be more involved in their care and to make informed decisions. According to Frontiers.com: “25% of Saudis suffer from diabetes; these 4 million patients require 5.5 million consultations and follow-up visits each year to manage their disease” and, as a result, eHomeCareGiving is helping to provide a more accurate and effective way to help care for patients with type 2diabetes in Saudi.
Blockchain is supporting the streamlining of clinical trials by enabling researchers and participants to share data securely. This leads to more accurate data, whereby reducing trial time and costs. Additionally, blockchain can help improve the quality of clinical trials by allowing researchers to verify data accuracy and avoid fraud. The Mayo Institute uses a blockchain-powered platform to monitor patients remotely during clinical trials.
Supply chain management
Blockchain is being utilised in the healthcare industry to improve the traceability and transparency of pharmaceuticals and medical devices in the supply chain. Using blockchain technology, the movement of drugs and medical devices can be traced from the manufacturer to the patient, ensuring the products are genuine and safe. A good example is Chronicled which uses blockchain technology to verify provenance of medication, thus helping pharma companies ensure their medicines arrive at the correct destinations. The Chronicled platform supports law enforcement agencies when reviewing any suspicious activity such as fraudulent medication and drug trafficking.
Healthcare fraud is a significant problem, and blockchain is helping to prevent it. By providing a secure, tamper-proof record of all transactions, blockchain can help reduce billing fraud, insurance fraud and other fraudulent activity in the healthcare industry. Since counterfeit drugs are produced outside the legitimate pharmaceutical manufacturing system and are therefore fraudulent, the use of a decentralised ledger (blockchain) can track every stage of the supply chain from the manufacturer to the patient, so making it more difficult for counterfeit drugs to enter the market. The Blockpharma blockchain-powered platform offers a solution for drug traceability and counterfeiting, scanning the supply chain and verifying all points of shipment. Blockpharma claims it can help to identify the 15% of medicines globally that are fake and its app lets patients know if they are taking falsified medicines. If there is a need for drug recall, blockchain can help identify the specific batches of drugs that need to be recalled, reducing the scope of the recall and limiting its impact on patients.
Blockchain can enable better tracking of prescription drugs, ensuring that they are only dispensed to authorised patients. Using blockchain, prescriptions can be tracked in real-time, making it easier to detect and prevent prescription fraud. If implemented, this will combat overdose and reduce drug resistance. A company called VeChain is being used in Australia to track and trace medication to help ensure that patients receive authentic drugs. WebMD claims: “Proponents of blockchain technology say we're on the cusp of a revolution in health care. They envision a future where doctors and institutions share medical records easily, and patients control their personal data rather than letting tech companies harvest our data for free and sell it for profit.”
However, whilst offering huge opportunities for the healthcare sector, the use of any blockchain technology also comes with its challenges, such as:
· regulatory compliance
· the need to establish standardised data formats and protocols
· interoperability of records
· the potential for data breaches and cyber-attacks
· the high cost of implementing new technologies.
Above all, given the size of the healthcare sector and the monies involved there are no shortage of firms looking for ways to improve the efficiency of this industry and to build trust and accountability whilst reducing costs. Furthermore, expect to see innovation from web3 firms, such as Aigia Health, and closer engagement between patients and their doctors via the greater use of wearables, with healthcare data being stored and shared on a permissioned basis on private and public blockchains.