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Blockchain technology as an opportunity for more transparency and self-determination

In the healthcare sector, blockchain technology is still in the early stages of development, although it has huge potential in this field. It is expected that patients will particularly benefit from the introduction of a decentralised database for managing and sharing health-related information with treating physicians. Statutory health insurance companies become less important as intermediaries. But how exactly does this technology work? What are the benefits and risks as far as the technology’s application in the healthcare sector is concerned? And what is the state of research in Baden-Württemberg, Germany and Europe?

Blockchain technology is mainly known from the financial sector, where the cryptocurrency Bitcoin has been implemented with great success. Managing digital assets with a decentralised database (the so-called blockchain) makes third-party intermediaries such as banks superfluous and allows users (private individuals, businesses) to conduct transactions via the Internet without a central authority. The innovative technology is already being used in the energy sector, for example in the "Brooklyn Microgrid" pilot project, which enables users to sell excess solar power to neighbours, for example. Central energy providers would no longer be necessary if the technology were to be used comprehensively (1).

How does blockchain technology work?

Blockchain technology is based on a central database that consists of cryptographically linked data blocks. This so-called blockchain is stored on the computers of many users. One differentiates between active users (so-called miners) that validate new datasets independently from each other and subsequently integrate these into the blockchain, and active users that use the blockchain exclusively for transactions and data storage. Transactions can be the transfer of money (financial sector), services (healthcare sector), power (energy sector), etc. © Viola Hoffmann

Blockchain technology does away with current structures for managing data, information and commerce by relying on decentralised databases rather than central institutions. In other words, there is no longer a central entity such as a government or bank (or health insurance company in the healthcare sector) storing data and managing transactions. Instead of third-party intermediaries, there are cryptographically linked blocks known as “blockchains”.

Cryptographic means that the connections between the transaction blocks are encrypted and difficult to decrypt. Once two information blocks have been linked together, it is very unlikely that this connection will ever be released again, because the decryption of this connection is only possible by consuming a lot of resources (computing power, money). In turn, information is stored in the data blocks, for example information about account movements or the energy consumption of different users.

The really innovative thing about a blockchain is that all parties have access to all data stored in the network and can check and verify it at any time. In addition to passive users, so-called "miners" constantly check the data for accuracy and are paid for this work in digital currency. The data is constantly reviewed and administered by different users. The result is a decentralised, democratised yet secure data management system. The main advantages over a conventional, centralised system are the following: the datasets are stored on the computers of all users in identical form - data loss or changing the blockchain from the outside is almost impossible. In addition, any user, whether they are a "miner" or not, can access all data. This guarantees extraordinary transparency (1, 2).

Blockchain technology in the healthcare sector: opportunities and risks

More transparency, democratisation and data security would also be the main advantages of a decentralised technology in the healthcare sector. For example, those involved (physicians, health insurance companies and patients) could be connected via a blockchain that stores all the relevant data relating to a person’s medical history, treatment and diagnosis. Doctors could treat patients more quickly and in a more targeted way – the duplication of examinations or treatments would be prevented, ultimately increasing efficiency (3, 6).

Furthermore, it would be possible for bonus programmes run by the health insurance companies to be organised via blockchains. Fitness studios, clubs or health apps would provide data in the blockchain and health insurance companies would have easier access to health-related data of those insured. For all users, such a procedure would entail cost savings with regard to the submission, review and billing of bonus-related activities. However, it remains questionable whether it would be easy to reach an agreement between the various data-sharing stakeholders (3).

Another application would be the invoicing of prescriptions: patients could forward to their chosen pharmacy a prescription that was digitally issued by the doctor, and the pharmacy would then provide and bill for the drug. The decentralised validation of these transactions by all network users would prevent billing fraud (through multiple submissions of prescriptions). An estimated loss of around € 2.72 billion per year from billing fraud (4) could thus be avoided and the fees for the insured person and the employer could be reduced (3).

Finally, blockchain technology has huge potential for remotely controlling medical devices such as cardiac pacemakers or insulin pumps, which, in an emergency, can currently only be controlled by doctors using password-protected software. A hacker attack on such centralised systems can never be completely ruled out; with blockchain technology, hacker attacks would be virtually impossible. The remote control of medical devices is already being investigated by some medical device manufacturers in pilot projects and would be safer for doctors and patients alike (5).

Despite potential savings and efficiency gains, the technology also brings with it risks and costs. Appropriate IT infrastructures with adequate computing power will have to be created in view of the fact that computations are energy intensive. Moreover, public sector users will need to be trained (6).

Current state of research: is the use of blockchain technology in the healthcare sector a realistic option?

Development state of blockchain technology in various industries. While the technology is already in use in the financial sector, it is still in the early stages of application development in the energy sector, and in the technology development stage in the healthcare sector. © WIP 2 GmbH

In Germany, a blockchain-powered health information system is still in the early stages of development (monitoring and evaluation), while in other sectors, particularly the financial sector, blockchain-powered systems are firmly established. Nevertheless, there are enthusiastic advocates of this technology in the healthcare sector where pilot projects and other endeavours are already underway around the world. Little has been pushed forward in this area in Germany. Estonia is the European pioneer in this area where the health data of all its citizens is stored in a blockchain-based patient portal. Doctors and hospitals not only have access to this portal once they have been given permission by their patients, but can also use it to create digital prescriptions, which in turn can be retrieved by pharmacies (7, 8). In Germany and Baden-Württemberg, this is still a long way off. Only recently, LBBW Research presented a study on the topic which barely mentions the healthcare industry. Instead, it concentrates on companies in the automotive industry (e.g. Bosch, Daimler) as potential users (9). The application of blockchain technology in the Baden-Württemberg healthcare sector therefore remains a vision of the future, at least for the time being.


(1) German Federal Financial Supervisory Authority (BaFin): Blockchain-Technologie. Online at: https://www.bafin.de/DE/Aufsicht/FinTech/Blockchain/blockchain_node.html [12.11.2017]

(2) Voshmgir, S. (2016): Blockchains, Smart Contracts und das Dezentrale Web. Berlin: Technologiestiftung Berlin.

(3) WIG2 GmbH (2017): Blockchain: Die Demokratisierung des Gesundheitswesens? - White Paper zur Funktionsweise und den Erfolgsfaktoren für eine Anwendung der Blockchain im Gesundheitswesen. Onnline unter: https://www.hcm-magazin.de/files/smfiledata/1/8/4/9/6/2/5/White-Paper_Blockchain---Demokratisierung-des-Gesundheitswesens.pdf [10.11.2017]

(4) Transparency International Deutschland e. V. (2008): Transparenzmängel, Korruption und Betrug im deutschen Gesundheitswesen – Kontrolle und Prävention als gesellschaftliche Aufgabe (Grundsatzpapier), 5th edition, June 2008, p. 5.

(5) Healthcare Futurists GmbH (2017). Online at: http://www.healthcarefuturists.com/ [12.11.2017]

(6) Welzel, C. et al. (2017): Mythos Blockchain - Herausforderung für den Öffentlichen Sektor. Berlin: Kompetenzzentrum Öffentliche IT. 1st edition.

(7) PWC (2017): Estonia prescribes blockchain for healthcare data security. Online at: http://pwc.blogs.com/health_matters/2017/03/estonia-prescribes-blockchain-for-healthcare-data-security.html [12.11.2017]

(8) Adobe Systems Incorporated [2017]: Wie Estland zum Digital Government-Vorreiter in Europa wurde. Online at: https://blogs.adobe.com/digitaleurope/de/governmental-affairs/wie-estland-zum-digital-government-vorreiter-in-europa-wurde/ [13.11.2017].

(9) Zimmermann, G. [2017]: Durchblick schaffen. Die Blockchain darf keine Black Box bleiben! Stuttgart: LBBW Research. Online unter: https://www.lbbw.de/mm/media/research/downloads_research/blickpunkt/2017_1/20170817_LBBW_Research_Blickpunkt_Die_Blockchain_darf_keine_Black_Box_bleiben.pdf [20.1..2017].

Further reading:

Frost & Sullivan (2017): Blockchain Technology in Global Healthcare, 2017–2025, Healthcare Industry Assesses Blockchain Potential to Optimize Healthcare Workflows and Improve Outcome-based Care Delivery Models.

Website E-Health-System in Estland: https://e-estonia.com/solutions/healthcare/e-health-record/

Further information:


Website address: https://www.gesundheitsindustrie-bw.de/en/article/news/blockchain-technology-as-an-opportunity-for-more-transparency-and-self-determination