The relationship between Blockchain and value-based healthcare

Posted on: December 6, 2017 by Herman van den Tempel

In this blog, I describe two applications of blockchain technology in healthcare as a practical embodiment of the value-based healthcare (VBHC) concept, which provides great benefits to both the patient and the healthcare provider.

What are the interfaces between VBH and Blockchain?

The main feature of VBHC is that it is not the output but the outcome of a treatment that matters. In other words, the goal of VBHC is not to minimize costs but to maximize “value”, defined as patient outcomes divided by costs (Porter 2006). This positions the patient's importance to the forefront.

This fundamentally different approach means that patient data and the ability to share this across healthcare providers and people becomes extremely important. Without the systems in place, the patient is the one who is able to share and allow the sharing of his own information. He manages the applications in the field of identification, gives permission for data exchange and data exchange coordination. Blockchain seems to cater to all these challenges.

What is Blockchain?

Blockchain is mostly known as bitcoin's underlying technology, but how does it actually work? There are many definitions in circulation, the following of which appeals: "Blockchain is a specific database technology that leads to a distributed autonomous ledger system[1]". Blockchain works as a digital ledger, to which all parties involved can access and see all transactions. Each block of information is therefore completely transparent for each participant if it goes from Lot A to Party B. Additionally, there may always be a number of elements applicable to blockchain technology[2]:

  • Transactions between parties are signed using cryptography (public / private keys).
  • After completion, the transactions are broadcast in a peer to peer network to be verified and agreed by a set of nodes as part of this network.
  • One or more transactions are placed in a "block"; this block is added to the blockchain with a cryptographic algorithm to ensure integrity.

Application 1; Blockchain strengthens the autonomy of the healthcare consumer

The autonomy of the citizen as a healthcare user is enhanced by the use of blockchain technology. By securing healthcare in the blockchain, a personal health environment is created, in which a healthcare user authorizes a healthcare provider to participate in the request for care. Also, the healthcare user determines which parties have insight into his / her blockchain, which ensures improved privacy protection. This functionality increases the quality of delivered care.

When there are several healthcare providers: because the information in the blockchain together forms a log of received care, a healthcare provider can tailor his offer to the overall situation of the patient.

The main distinction with the traditional patient records is:

  • Better reliability and availability in a distributed network compared to centralized databases
  • A transaction driven model instead of an information driven model
  • Better security because no participant has all the information
  • Empowerment of the patient as real owner of its data
  • No need of a trusted third party as custodian of health-related data

Application 2; Blockchain as a facilitator for healthcare administration and finance

Blockchain is characteristically based on a transactional model. This model is very suitable for facilitating and recording the healthcare provider's declaration to the health insurer and then the payment by the insurer to the healthcare provider. First of all, the administrative burden is alleviated: after registration and authorization of participation in the blockchain, a declaration becomes as simple as scanning a QR code and a confirmation from the healthcare user. An additional benefit is that registration of care has a real-time character, which allows delivery and compensation to follow each other more quickly. Also, blockchain reduces the need for control: because data is captured by authorized participants and can no longer be manipulated, fraud sensitivity is drastically reduced and control is hardly required.

A number of experiments have been conducted in the Netherlands with the use of blockchain in healthcare. The Netherlands Care Institute developed a blockchain-app for the elderly in which their caregivers and care consumers can communicate information[3].

Blockchain as enabler for value-based healthcare?

Value-based healthcare is interesting as a concept but comes to life if it is based on concrete cases. The use of blockchain technology can allow the patient to manage their own healthcare information and therefore bring VBHC to life.

Blockchain offers the ability to deal with applications in the field of identification, data exchange, and data exchange coordination fundamentally. It is undoubtfully an enabler of value-based healthcare, obtaining its potential benefits by being used as a medium as it does in other sectors. However, its applications are limited in this issue due to the existence of other challenges that must be overcome in terms of the interoperability of clinical information that is being used through blockchain. The healthcare sector is on the right track but should invest more time and resources in experimenting with specific applications.

[1] Kaptijn, B., Bergman, P., Gort, S. Whitepaper blockchain. ICTU, 2016

[2] Grigorik, I., Minimum Viable Block Chain, 2014.


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About Herman van den Tempel
Director Healthcare
Herman has a master in Space Law (university of Leiden) and International Relations (University of Amsterdam) and has worked for several satellite companies in Belgium, France and Turkey before he joined Atos.Within Atos he always worked in the Public Sector (Market) and was responsible for Aerospace & Defense, Public Safety and Healthcare.