Why healthcare does not need blockchain


Pulse Series: As part of the 21st Century Series on Australian Healthcare, David Pare, CTO for DXC Healthcare and Life Sciences in Australia and New Zealand, will focus each month on news, start-ups and developments within the industry — what’s happening, what’s being done to drive innovation, and what’s new or newsworthy.

There has been a lot of hype around blockchain, particularly its potential to secure data access and financial transactions across all industries. But does healthcare need blockchain? Can it solve healthcare challenges related to the fragmentation of information?

Following its survey of 200 healthcare executives across 16 countries, IBM proposed four main areas where blockchain has the potential to bring significant efficiencies: health records, medical data device integration, adverse events, and clinical trials. And Deloitte has said blockchain has huge potential for supporting integration and improving data integrity.

While the IBM paper refers to trailblazers who have implemented blockchain applications, the level of investment by the technology community in healthcare blockchain capabilities remains limited, at least on the provider side. And although blockchain might have potential for national healthcare systems, it has yet to gain traction and demonstrate real benefits. The only example of commitment at a national level is Estonia, which has been working with start-up Guardtime to secure public healthcare records using its signature infrastructure blockchain, which is integrated into the Estonian eHealth Foundation ‘s database. Even they, admit it will take many years to see this program to completion.

Today, blockchain is mostly used for secure payments – claims adjudication for health insurer and supply-chain integrity – which have little to do with healthcare delivery.

The issue for healthcare is that it struggles with a good model for sharing information across the system because data is fragmented across thousands of siloed applications. The challenge is not so much the ability to securely share data across system, but the complexity of reaching all the applications that sit on top of a general practitioner’s desk, at the basement of a hospital pathology department or in a State data warehouse. Blockchain can help make the exchange more secure and untempered through distributed ledgers but it will not accelerate or solve this challenge for healthcare.

A reality-check on the value of blockchain in healthcare

Globally, many healthcare start-ups are betting on blockchain to solve industry challenges. However, if you look closely, many of these companies are using blockchain not only to solve actual problems but as a marketing tool to promote their solution, leveraging the hype around the technology.

How these companies fare remains uncertain. Already, healthcare blockchain flagship company Gem Health, which worked closely with the Philips health blockchain lab, has decided to opt out of healthcare as an industry for their blockchain platform. Its chief communications officer, Chitra Ragavan, said Gem was too early in the healthcare market and while big companies are educating themselves with Gem’s help, the big contracts seem years away. That is the reality-check I am talking about.

Two big players, Microsoft with HealthVault and Google with GoogleHealth, launched an online platform allowing patients and consumers to store and share their personal health information. Unfortunately, they both realised that patients didn’t really want to work to transfer their data into a cloud and thus the market place fell apart along with its non-viable business model. That does raise questions as to how others will make their projects financially viable. We have to remember that, although it is starting to change, most people do not pay attention to their health data until they get really sick.

Another challenge created by the plethora of blockchain start-ups is the creation of multiple company-specific cryptocurrencies. If every blockchain start-up comes up with its own platform and cryptocurrency, how will the marketplace deal with all of these? It would be like travelling Europe before the introduction of the euro and having to change currency in each country.

The value of blockchain in healthcare is undeniable, but mostly for payers and life sciences organisations through secure payments, claims adjudication and supply-chain management. On the provider side, blockchain, although a viable technology, does not really solve anything and will not “shift the dial” in regard to data fragmentation – at least in its current state. As always, we are looking for a silver bullet but there is none. It is just a complex problem that will take time to fix.

David Pare is the chief technology officer for DXC Healthcare and Life Sciences in Australia and New Zealand. He is an innovative thinker with 20 years of experience in business and technology management consulting, helping organisations through their digital transformation.



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  1. David Wasson says:

    I think there is much “hype” in the healthcare industry with respect to blockchain applications, however, when you cut through the “noise” you can find significant examples of blockchain technology being applied to un-met needs in the industry.

    I do think your article could better define “heathcare”. It appears the article is using the term “healthcare” and “life sciences” as if they are interchangeable. They are very different and the life science sectors are making real world strides addressing problems using blockchain technology, especially preventing counterfeit drugs in the supply chain. Also, there are many real world examples where blockchain technology is being applied today to help un-met needs in healthcare such as transparency, immunibility and efficiency of healthcare professionals registry data. There are many opportunities to improve healthcare, but it is important to take small, meaningful steps and not try to solve problems that don’t exist.

    David Wasson

    • David Pare says:

      Hi David, thank you for your comment. I do agree with you and in the blog I define health in three areas: payer, provider and Life Sciences (pharma and medtech). I also mentioned that this point of view is focused on the provider side as, to your comment, the payer and Life Sciences industry is already harnessing great benefits from blockchain, solving real issues. I took this harsh perspective to make a point, blockchain will not solve the fragmented data across the system. In an upcoming post, I’ll be providing a list of great examples of startups doing great things, to highlight it is not all bad. Cheers,

  2. Melody Spencer says:

    Thanks for a good article .


  1. […] my last blog, I challenged the value of blockchain in healthcare, particularly its ability to solve our data fragmentation problems. I took a somewhat harsh […]

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