12/10/2021 | Digital Innovation

Protecting health data

Jonas Lundquist, CEO at the blockchain platform Haidrun of Stockholm, guves his views on how digital healthcare ecosystems can increase the security of sensitive medical information.

In the past decade alone, more than 200 million patient records have been exposed to data breaches in the healthcare ecosystem. Confidential health information, genetic data and financial details have all been stolen. While breaches to sensitive patient data tent to hit the headlines, the security of pharmaceutical research and supply chain data is also a major challenge.

Another problem is the sheer volume of paper in health administration. According to Deloitte – a single healthcare provider will file in the region of 20,000 paper form annually. And surprisingly, more than half of the 30 billion healthcare transactions performed every year will still be via fa, with more than half arriving with the doctor late. Of the others, more than half will contain either insufficient or incorrect detail.

While there have been numerous attempts at digital transformation within healthcare, a new generation of private blockchain has the potential to provide a new model for information exchanges, bringing widespread implications for all stakeholders. Blockchain will connect fragmented systems and generate better patient care and more reliable pharmaceutical supply chains.

Private blockchain technology can help to identify, track and secure all types of patient-related data, as well as monitoring pharmaceutical products to prevent fake products from entering the supply chain. As well as providing trust and transparency, blockchain is also suited to patient tracking and claims processing due to its property of chronological data storage. Medical events are stored in the order they occur and there is no potential for illicitly changing the data at a later stage by accident or for fraudulent purposes. Drug fraud is a mounting problem, and the healthcare industry needs secure, auditable and transparent supply chains. Blockchain is essentially a digital system of recording information that is extremely difficult to alter, cheat or hack, and it is already changing digital world concepts such as ownership, privacy, uncertainty and collaboration. It is disrupting sectors as differentiated as financial markets, content distribution, supply chain management, distribution of humanitarian aid and even the way we vote in elections. We will now witness its potential in opening a new way of making the healthcare industry more secure as organisations face increasing threats to the integrity of their data resources

Although first-generation public blockchains had limitations of privacy, scale and interoperability, we now know that private blockchain is a secure and reliable way of storing data about other types of transactions.

These platforms simplify data handling, which has the benefit of significantly reducing friction in the system while reducing operational costs. It can also eliminate suspicious and duplicate transactions by chronologically logging each one in real time. Once verified, using an advanced consensus algorithm, and then cryptographically sealed into data blocks, the transaction or record is “immutable”. The user then verifies the authenticity of data transactions or events. This mean, for example, that no entity involved between a drug company and the retailer can alter the data to include counterfeit drugs, while the movement of drugs between the companies and medical facilities can be tracked in near real-time through the data stored on the blockchain.

Public and private platforms – the differences

Although the mechanics of blockchain are complex, the concept is simple: to decentralise data storage so that it cannot be owned, controlled or manipulated by a central actor. Blockchains come in three flavours – private, public and hybrid – with private blockchain technology rapidly gaining interest for enterprise applications in healthcare and other sectors. This is because private blockchain is a type of database or ledger where a single authority or organisation ultimately retains control. And although this raises the question as to whether they are aligned to the original core concepts of the technology, this is of less importance than the fact that blockchain technology delivers a distributes database that provides a single time-stamped version of the truth.

Blockchain uses mathematical and cryptographical techniques to provide trust and security – rather than through third parties – and relies on a transparent user structure to confirm all is well. While private blockchains adhere to the original principles and offer all the distributed benefits, they retain some of the characteristics of more centralised networks. This provides the control to improve privacy and curt the illicit activities often associated with public blockchains.

No one can enter this type of network without proper authentication, making them more suited to enterprises due to factors such as performance, accountability and cost. The private blockchain platform can be run and operated by the enterprise or as a service called Blockchain as a Service (BaaS) and are usually set up for reasons of privacy, where it does not suit an enterprise to allow every participant full access to the entire contents of the database. Private platforms focus on organisations in which the blockchain empowers the business rather than the individual users. In contrast, public blockchains are fully decentralised where, in additions to the distributed database, there is also no single entity in overall control. They typically involve their own cryptocurrency and anyone can download the software, view the ledger and interact with them. Public blockchains attempt to preserve an individual user’s anonymity and treat all users equally. Hybrid blockchains are a mixture of the two.

Private blockchains are the preferred option for many enterprises when it comes to safeguarding sensitive information, especially as they will also need to demonstrate full accountability – often via external audits – on the running and operation of their systems. Private blockchains provide a higher degree of regulation, determined and set by the administrators in line with industry regulatory codes. Importantly private blockchains do not need to use cryptocurrencies or native tokens for the network. Any association with cryptocurrencies, good or bad, is not part of the private solution. All of which means that less energy, fewer resources and participants are required to run the private blockchain, resulting in reduced costs on a far more predictable scale.

Blockchain for beginners

It is a list of recorded actions – or blocks – linked by cryptography as a transparent transaction ledger for bitcoin. It was invented in 2008 by someone called Satoshi Nakamoto about whom nothing is known. What is known is that it is a dramatically changing the information management ecosystems involving the key players if supplier, intermediary, and customer in ways a simple shared database cannot, thanks to its unique assets of decentralisation (no-one takes control), transparency (everyone has access), consistency (it is unalterable), authenticity (all operations are verified and come from sources using their own private keys). Added to that, it is able to issue “smart-contracts” via inbuilt payment triggering functions.


Jonas Lundquist

CEO Haidrun

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