The underlying technology behind the digital currency, Bitcoin, is piquing interest across Nashville’s healthcare industry, largely due to its potential to change the way data is shared. Blockchain, or distributed ledger technology, is a decentralized database that securely records transactions and can also allow for the transfer of an asset such as data or currency.

What is blockchain technology?

While there is not one generally accepted definition of “blockchain,” distributed ledger technology essentially allows parties to create irreversible records of transactions in a secure, transparent platform.

“Distributed” describes the platform’s structure, which shifts the control and ownership of information into numerous entities instead of only one. Each entity in a transaction confirms its validity by allowing data to be stored across a network through software unique to the particular blockchain. Transactions are validated through database replication and subsequent authentication by those entities participating in the transaction within the blockchain network.


“Ledger” refers to the longitudinal and permanent record of time-stamped, verifiable transactions. Each transaction is recorded using cryptographic validation and is arranged in batches of data. Each batch of data is called a block. Each block references and identifies the previous block through sophisticated encryption technology, forming a secure chain of recorded transactions.

Use of blockchain technology creates an unchangeable record of a transaction. This record is not stored in one location but is distributed to others and maintained by a database and computational replication. This decentralized structure, combined with an auditable ledger of transactions, is technology primed for adoption in appropriate applications in a rapidly changing economy.

How could it be used in healthcare?

The healthcare sector is primed to adopt blockchain technologies.  Already, this technology has begun to be implemented by the financial industry, where the dominant conversation is based on the rising value of bitcoin and other virtual currencies. But healthcare is poised to implement blockchain technology at a more rapid pace than even fintech. In healthcare, the currency is data. Adopting this decentralized framework has the potential to solve the regulatory and business challenges plaguing the industry today. Corralling data and finding ways to quickly exchange and parse it is central to the future of healthcare, which produces data at nearly every point of care. Blockchain technology would allow all parties — patients, providers and insurers — to connect in real-time and share information quickly without having to pass paper or even data back and forth. A party participating in a healthcare transaction could have permissions to access necessary data.

The volume of patient data managed by hospitals, doctors, and insurance companies increases each year with electronic records, health information exchanges, data collected from monitoring and medical insurance claims. Over the last several years, as electronic medical records (EMRs) have been installed across the healthcare spectrum, there has been a lot of discussion about interoperability amongst disparate systems. Many of these EMR systems do not effectively interact with each other, defying the point of their existence. Could blockchain possibly disrupt the strong business incentive against sharing data? With the rise of more digital data than ever before, a dire industrial need for security and transparency, as well as the rise of new patient-centered models, blockchain is a viable solution with applications in numerous areas including population health, interoperability, consumerism and data security.

What would distributed ledger technology look like for patient records?

In the historical model, physicians hold patient records, although they are now being asked to share the records electronically. Patient medical records on the blockchain, in one example, would allow patients to be in control of their medical data and choose with whom, and for how long, to share it. This would take place on a permissioned ledger. The convergence of emerging technologies such as blockchain will result in more efficient sharing, access, and control of patient data.

What is the expected timeline for a roll out of blockchain in healthcare?

Consistent with the culture of healthcare industry, there is an apparent conservative approach to adoption of blockchain technologies. Primary applications for proofs of concept consist of supply chain, clinical trials and medical records. The underlying features of each application – linear workflow and access by numerous, interested parties – present interesting and logical applications of the technology in healthcare.

The adoption of this technology is in a relatively early stage in the U.S., but the pace of adoption is accelerating with the help of consortiums. For example, Hashed Health, which launched at the Blockchain in Healthcare conference on October 3, 2016 in Nashville, TN, promises to align stakeholders in healthcare to accelerate the adoption of blockchain technologies. The financial sector has a similar consortium model that has been a driving force behind the acceptance of virtual currency in the financial sector. In fact, a survey by IBM of 200 financial market institutions found that 14 percent of the institutions surveyed indicated that they would have a commercially-scaled blockchain in production in 2017.[1] This is undoubtedly the result of the synergies among the related parties and shared goals in driving market adoption.

A similar shift is happening in healthcare.  A recent report from the Brookings Institute explained that, “(m)acroeconomic and demographic forces are reshaping health care and dramatically widening the potential applications of IT within the sector…The role of IT in health care will encompass not only hospital information systems and EMRs, but also a broader set of solutions from revenue management to care delivery and clinical process redesign.”

This shift in data management, similar to the movement already occurring in fintech, is likely to see widespread, rapid adoption in the healthcare industry. And implementation of blockchain technology throughout 2017 is very likely to provide the stimulus for improvements in the way the industry manages, shares and secures information across the spectrum of care.

johns-kristen-portraitKristen Johns is a transactional attorney in Waller’s Intellectual Property Practice Group. Her practice intersects privacy, security, technology, and intellectual property.