Certified Public Accountants
& Business Consultants

Healthcare’s Biggest Distruptor: Blockchain & EHR Interoperability

Contact Our Team

As patients and regulators press for better care at lower costs, the healthcare system appears to be poised to experience a dramatic digital disruption.
October 26, 2017

As patients and regulators press for better care at lower costs, the healthcare system appears to be poised to experience a dramatic digital disruption.

In particular, as the industry moves toward outcome-based reimbursements, the need for a holistic patient picture will become increasingly important. This will require a stronger, more integrated information system to manage and maintain health data.

Blockchain is poised to not only evolve how we do business, but also to solve a particularly pesky problem in healthcare — electronic health record (EHR) interoperability.

Broadly speaking, blockchain is a mechanism that acts as a robust, decentralized list of transactions or a “network ledger.” The technology can be utilized to administer transactions and contracts and maintain a transparent record of it in its entirety.

In other words, it is a simple, secure and decentralized accounting system.

Why is this a potential solution for sharing sensitive health data? The power and promise of blockchain technology is that instead of keeping a ledger on a server in a building, the entire ledger of encrypted data is kept simultaneously by all users on the blockchain network (making it extremely difficult to hack or change).

Other great features of this decentralized ledger technology include data protection, security (through encryption) and standardization. EHR systems could send information packets to the ledger in a standardized format (which would solve the interoperability issue). The figure to the right shows a simple example of a blockchain network.

Blockchain-Network-Figure.pngAs shown in the figure, each user has a complete copy of the ledger. If a user, say User 5, drops out of the network, there is no impact on the integrity of the ledger as complete copies are still maintained and validated across the four remaining users.

In addition to a robust network, blockchain automatically reconciles transactions (or records), as opposed to the very manual process in place today to reconcile records between EHR systems.

To understand how blockchain will automatically validate and reconcile medical record data, we have to dive deeper into the fundamental process of chaining blocks of information together to create a ledger.

Specifically, each block of data (say, fifteen minutes worth of transactions or records) is given a ‘fingerprint’ or a unique code. Each 15-minute block of information would need to be assigned a code that is consistent with its predecessor (which is done through the use of a cryptographic algorithm) thus “chaining” the blocks of information together.

Blockchain would provide the mechanism for EHR systems to not only send packets (or blocks) of information to a decentralized ledger of records of all other EHR systems in the network, but also allows a particular EHR to reference that ledger to pull a continuous log of information about a patient from the network.

Forbes points out that one of the nearest term opportunities to apply blockchain technology to healthcare is to create clinical health data exchanges that “are cryptographically secured and irrevocable.”

In a recent whitepaper, A Case Study for Blockchain in Healthcare, a joint team of researchers from the MIT Media Lab and Beth Israel Deaconess Medical Center successfully tested a prototype deployment of blockchain technology, creating a decentralized ledger of prescribed medications.

Specifically, the prototype network organized “a content access system across separate storage and provider sites” and created an “authentication log” that governs medical record data access and provides a comprehensive record review, according to Harvard Business Review.

Although the application of blockchain technology is in its infancy, early testing of the technology has shown promise.

If the technology is well accepted in the healthcare community, it stands to create a much more transparent and complete log of patient records, while maintaining a higher level of data security and robustness.


Any federal tax advice contained in this communication (including any attachments): (i) is intended for your use only; (ii) is based on the accuracy and completeness of the facts you have provided us; and (iii) may not be relied upon to avoid penalties.

All Healthcare News Healthcare Overview

For more information, please contact: