Andrey Sergeenkov


Healthcare and Blockchain — Of Smart Contracts, Insurance, and Supply Chain; with a Hint of AI

Healthcare and Blockchain — Of Smart Contracts, Insurance, and Supply Chain; with a Hint of AI

Blockchain, the running engine behind most cryptocurrencies, is an adaptable technology with the potential to revolutionize almost every major industry. It was designed initially for managing transactions and maintaining consensus via a decentralized public ledger, all while avoiding the need for intermediaries. In the end, blockchain was much more; a highly scalable technology that could store and transfer data securely without the need for third parties, offering new ways for industries to manage and review data.

To this came smart contracts, programmable if/then statements that could be implemented in the blockchain network. This made it possible to calculate and execute decisions with stored data quickly and efficiently without the need for human processing.

Many projects have been founded to explore how this technology can be used to improve services. One major industry that stands to benefit from Blockchain is healthcare. Hospital records, insurance claims, medical verifications, and the medical supply chain all have the potential to be improved drastically with blockchain systems.

This article will examine how blockchain can make the healthcare industry more efficient, safe, and secure.

Records and Insurance Claims

Effective communication between hospitals and insurance providers is key to delivering timely responses to filed claims. Today, hospitals must comply with certain legalities regarding the handling of patient documents. Ensuring patient confidentiality can make it difficult for insurance providers to get the documents needed when making claim decisions.

This can cause lengthy processing times and claim denial that leave both patients and hospitals billions in debt annually. Some have cited this as a major reason for the rising cost in healthcare.

Blockchain can help ease this line of communication. The cryptographic technology behind blockchain can provide the needed security to transfer patient data files to insurance providers. Future development might even bring integrated blockchain ledgers between hospitals and insurers into use that allow both parties to update case files in real time.

Smart Contracts

Smart contracts can then be employed by insurers to assess data — replacing the largely paper-driven systems used today. These integrated systems diminish the likelihood of human error while providing a more stable and efficient way for managing claims. They also provide digital certificates that establish ownership which lowers the risk for potential counterfeiting.

Smart contracts can be coded to meet a large variety of conditions, providing the needed flexibility to compete with the current legacy systems used by insurers today.

Medical Verifications and the Medical Supply Chain

Another use-case for blockchain is its ability to provide verification.

The medical supply chain is a large industry within the healthcare sector. Blockchain can work to improve its transparency and efficiency — making it safer, more stable, and cost effective. The medical supply chain includes not only the shipment of medications worldwide, but also fragile equipment and testing kits. These costly items require specialized shipping and easy tracking.

Blockchain Ledger

As with healthcare, the medical supply chain can use blockchain’s distributed ledger to better track and record shipment data. Integrated systems would make it possible for different entities to record shipment progress at different posts along the way, starting from the place of manufacture, to the storage warehouses, transit, and finally, the point of delivery.

Better tracking would help to ensure that shipments make it to their delivery locations successfully. If products are found to be missing or damaged, the undisputable blockchain records would help to identify the point in the process in which mismanagement occurred.

Users at home awaiting medications could log in to access portals that would show the exact whereabouts of the product, following every location it passes along the way. This would give medical providers and patients ease of mind knowing that their purchases have come from a verified point of origin and are making their way safely to the point of delivery.

Certain open-source cryptocurrency projects, like the Ethereum network, have also been utilized for similar purposes. Products, such as medicine, can be issued a verification signature via the Ethereum blockchain network. Customers can cross-reference the verification to ensure that their purchase is not faulty or fake.

Some Projects that utilize Blockchain verification:

  1. Midas Caps — a company creating nutritional tablet-capsules for health, sports, and everyday life activities
  2. Insure Network — want to create a new insurance marketplace in a decentralized fashion intending to reduce costs in verification, networking processes, and provision of transparency
  3. Baikalika — will use blockchain technologies for verification of authenticity and shipping control for drinking water from Baikal
  4. CheckitsReal — an app which allows people instantly validate the authenticity of products by their mobile devices
  5. ECOS — aim to control traffic and life-threatening products using blockchain with a distributed database

Blockchain and AI

Blockchain’s smart contracts, in cooperation with AI technology, can be used to improve transport safety in the medical supply chain. Temperature regulations and other specialized conditions can be programmed as smart contracts. Failure to meet satisfying conditions of the contract would alert AI machines to account for faulty conditions. For example, lab kits requiring cool temperatures could be regulated via smart contracts — fluctuations in temperature could trigger AI driven devices that would regulate the temperature as needed.

One project that is working to create blockchain/AI driven solutions is IOTA. This cryptocurrency project is also making it possible for AI devices to pay themselves in real time for their energy consumption.


Blockchain is an adaptable and versatile technology that has far-reaching implications. What was designed to provide a secure and decentralized monetary system, has provided a technology which can greatly improve efficiency via an indisputable ledger and origin certificates.

With its smart contracts, Blockchain has all the resources necessary for helping to mitigate insurance claim processes and internal data systems at hospitals and clinics. This ever-expanding technology can also be used to give greater transparency to the supply chain network helping to ensure authenticity and safety while preserving cost.

Blockchain technology requires more development before it can be employed to overtake existing legacy systems, but the outlined use-cases serve as proof that the required investment is worth the payoff.

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