EVERY YEAR IN THE UNITED STATES, billions of dollars’ worth of unopened, unexpired prescription drugs are destroyed or tossed in the garbage—at a time when a quarter of the U.S. population says it can’t afford prescribed medicines and sometimes goes without. Many states have set up donation and reuse programs through pharmacies, charitable clinics and hospitals, but such programs have done little to solve the big problem of wasting perfectly good, desperately needed medications.

Good Shepherd Pharmacy, a nonprofit in Memphis, has been part of an effort to collect unsold medicine from drug manufacturers and wholesalers, with the goal of dispensing it to uninsured and low-income patients. But the initiative has gotten bogged down by the hands-on work it demands from participants, according to Phil Baker, founder and CEO of Good Shepherd. “There’s a lot of paperwork and phone calls,” he says. So his pharmacy, along with Lipscomb University’s College of Pharmacy in Nashville and the University of Memphis, recently announced the first steps in an effort to track prescription waste more easily and link needy patients with prescription drugs. The backbone of this global network is blockchain.

Blockchain technology may evoke crypto-currencies and overhyped Silicon Valley startups, but at its root, blockchain is a way to share information securely by also sharing the responsibility for keeping it safe. For Baker and his partners, for instance, the technology would facilitate the tracking of unused medications. Rather than having a central administrator manually verify every time a drug changes hands, participants will share that role. They’ll record and store data about donated medications on a shared electronic ledger and verify their authenticity by tracing a medication back to where it was manufactured and forward to where it’s needed. “This is an example of how blockchain can help save lives,” Baker says.

For the better part of a decade, blockchain has been hailed as a technology that will change how almost everything—information, goods, money—gets created, distributed and consumed. Experiments are taking place across the landscape of American business, and that includes hospitals and research laboratories. Indeed, plans for blockchain in health care outpace those of any other sector, according to a recent Stanford Graduate School of Business study.

The challenge will be to find the right fit, which means identifying problems that can be solved by a technology that can streamline and secure the movement of data. Electronic health records (EHRs) have been an early target. They’re now the lingua franca of health care, and patient medical data has taken root in the records of insurance companies, hospitals and the offices of physicians and other providers. But not all of these records are accessible to everyone who might need them. In the city of Boston alone, 26 EHR systems are used by more than a dozen hospitals, with patient data often dispersed across multiple platforms—making it nearly impossible to consolidate every patient’s individual encounters into an accessible, comprehensive health record.

Blockchain, at least in theory, could provide the infrastructure for a decentralized EHR system that would allow selective access to that data and let it be updated safely and securely. “Blockchain has unique qualities that could provide a lattice work needed to transform interoperability and the future of health care,” says Mutaz Shegewi, research director for IT transformation strategies at IDC Health Insights near Boston.

Yet even as blockchain pilot programs and trials move forward, the technology appears to be less of a quick fix than a long-term experiment, with successes and failures that outline its potential and limitations. The task ahead will be to separate help from hype. “There are two major questions,” says Tim K. Mackey, an associate professor in the department of anesthesiology at the University of California, San Diego School of Medicine and director of the Global Health Policy Institute, a UCSD affiliate. “How is blockchain an appropriate fit for the challenges we face in health care?” he says. “And how does technology measure up in terms of cost and efficiency?”


TO UNDERSTAND HOW BLOCKCHAIN works, consider how a company traditionally keeps track of its business. For every transaction, buyer and seller maintain a record of what is bought and sold—a process that was once practiced in handwritten ledger books, but which now almost always happens digitally. Yet each participant’s ledger remains separate and isolated from all of the others, and a lack of transparency across different companies’ systems can lead to discrepancies, disputes and fraud. Intermediaries—lawyers, accountants, banks and government regulators—are needed to resolve problems and keep goods and information flowing.

Blockchain takes a different approach. It uses a form of record-keeping that participants agree to share: a “distributed ledger.” In blockchain, each network member, known as a node, can add information—a block—to the shared ledger in real time, as well as read and review the blocks others have added. Each node is assigned a kind of password, a private digital key that verifies the user’s identity. Each block also has a unique identifier called a hash, which is determined via a complex mathematical process that is very difficult for outsiders to decode—one reason blockchain technology is considered so secure.

When a member of the blockchain network makes any transaction—a manufacturer, say, ships a product to a distributor, and receives payment—other members are notified electronically. If they confirm the transaction, a new block is created, which includes a hash. Each time another block is added, its new hash is automatically applied to all previous blocks, linking them—the “chain” in blockchain.

If someone goes back and attempts to change data in a prior block—to fix an inaccurate payment, for example—the hash value of that block will change and won’t match those of successive blocks. Those data have fallen out of the chain, and making the chain whole again requires all members seeing and approving the change—and updating the hashes in all subsequent blocks.

This transparent process helps ensure trust among members of the blockchain network, allowing it to operate as a single “source of truth” for authorized participants, says Mutaz Shegewi. The encryption and node systems also keep data remarkably safe from intrusions by unauthorized outsiders.

Blockchain originated in 2008 as a tool to power Bitcoin, the first unregulated cryptocurrency, a form of electronic cash that can be created and exchanged without the involvement of any government or financial institution. Now, a decade later, there are well over 2,000 cryptocurrencies, all of which depend on some version of a blockchain network. For a currency—a kind of shared truth, which fundamentally depends on no counterfeit blocks entering the system—the technology has been an ideal fit. But in the years since blockchain’s introduction, innovators in many other fields have also seized upon the technology as a way to make other kinds of transactions more transparent and more secure.

In 2016 the Office of the National Coordinator for Health Information Technology, part of the U.S. Department of Health and Human Services, challenged researchers and health care organizations to explore how blockchain could be used in their fields. The research team of Noah Zimmerman, director of the Center for Biomedical Blockchain Research at the Icahn School of Medicine at Mount Sinai in New York City, recently published a “landscape map” that counts 159 current blockchain projects in health care, roughly three times the number just two years earlier. In Zimmerman’s opinion, “many of those efforts are still half baked or overly optimistic, with a disconnect between what blockchain technology could enable and our most pressing problems in health care.” Fewer than one in six companies on his list has a functioning prototype, and even fewer have launched a product. Yet despite the shaky foundations, Zimmerman believes their collective impact will someday be profound.

SOME BLOCKCHAIN IDEAS ARE already in motion, demonstrations of what John Bass, founder and CEO of a blockchain startup in Nashville (Hashed Health), calls “low-hanging fruit” that demonstrate how the technology can deliver real value.

For the past two years, for example, U.S.-based Spiritus Partners has worked on a pilot project with National Health Services Scotland and other participants to test how blockchain might be used to track medical devices. “We’re interested in whether a device is safe at the point of care—in an acute care setting, outpatient facility, or at home, or as an implant,” says Susan Ramonat, CEO of Spiritus Partners.

The pilot demonstrated how a blockchain system could provide a useful record of medical devices as they pass through a chain of custody during their lifespans. With tagging, tracking and scanning technologies, the simulation showed how those who used the device could produce a traceable, certifiable update on its service history and condition. Spiritus is now creating a consortium of providers, medical device manufacturers and third-party service providers to launch a more ambitious demonstration in the United States by mid-2020, says Ramonat.

Other medical resources depend on constant input and updating from many sources. Consider the lists of providers covered under various health insurance plans—directories that patients can consult on the plans’ websites when they’re looking for a new doctor. The provider information, maintained separately by each health plan, is often wrong or outdated, and coordinating input from insurers, physicians and other participants is time-consuming and expensive, racking up an estimated annual cost of $2.1 billion, according to statistics from the Council for Affordable Quality Health Care. So seven major health care companies, working together in what they call the Synaptic Health Alliance, are experimenting with blockchain to make provider data more accurate, while reducing administrative burdens.

In a 2018 white paper, the group described a blockchain that lets any alliance member input, validate, update and audit provider data within the network. In a recent trial in Texas the results were promising, and the Alliance is moving toward full deployment in the state, says Kyle Culver, a Synaptic Health Alliance co-founder and director of emerging technologies at Humana, an alliance member.

Health organizations must also validate the credentials of physicians and other providers, and there’s no easy way to collaborate on maintaining those records. Last year, the Professional Credentials Exchange, known as ProCredEx, in partnership with Hashed Health, announced a collaboration testing blockchain to streamline this process and build a faster, more secure exchange, says Anthony Begando, ProCredEx CEO, who expects to release early results of the project next year.


IF MOST BLOCKCHAIN PROJECTS aren’t visible to health care consumers, Nebula Genomics in Boston could emerge as a notable exception. The company, which provides genome sequencing services, was co-founded by George Church, a professor of genetics at Harvard Medical School and a giant in the field of genomics. Nebula has touted its mission of using genetic data to advance biomedical research. While other direct-to-consumer DNA-testing companies have stated similar goals, several have also been criticized for selling data to drugmakers without their customers’ knowledge or permission, a practice that led the U.S. Federal Trade Commission to open a probe into how those firms handle patient information.

Nebula promises a much greater degree of control for its genetic donors, and part of the company’s solution will use blockchain technology. The Nebula website will provide a marketplace that allows researchers to promote their projects and seek research subjects. Blockchain should enable customers to see which projects are requesting their data and authorize or deny access. Those who do choose to participate will be compensated with digital Nebula “tokens,” which are already being used to reward users for completing surveys, referring friends and uploading data. The tokens can be redeemed to defray the cost of personal genome sequencing—Nebula offers whole genome sequencing that can be paid for in this way—and once the research blockchain is in place, tokens will help users buy additional tests and more in-depth interpretation of personal DNA data, says Dennis Grishin, co-founder and chief scientific officer of Nebula.

And consumers in the Arizona Care Network, one of the largest accountable care organizations in the country, also will soon be able to take advantage of blockchain information sharing. ACN has adopted a mobile app called Care.Wallet that will allow its physicians to check on patients’ benefits details and eligibility and enable patients and providers to share administrative and financial data.

About 10% of ACN’s 300,000 members have type 2 diabetes. A version of Care.Wallet initially being offered to these patients in two Arizona counties is the first blockchain-enabled diabetes care network. The app offers patients information about diabetes, helps them coordinate care and offers a host of resources. “Blockchain is enabling organizations like ours to have direct interaction with patients, insurers and providers, automatically synchronizing shared information and updating everyone on the chain in real time,” says David Hanekom, CEO of ACN.

IDC HEALTH INSIGHTS PREDICTS that blockchain adoption in health care will increase eightfold by 2022. Yet for now, it remains a technology in its infancy, and one recent survey of health care organizations found that only 6% were building blockchain programs and just 3% had pilot programs underway. Nearly two in five weren’t doing anything at all.

One issue is money. “Because most blockchain solutions have never matured beyond pilot projects, it’s hard to answer the question of what the actual costs are of developing and implementing such a system,” says Tim Mackey at the UCSD School of Medicine. Despite blockchain’s reputation for security, there are worries about when problems do happen. The technology’s defining characteristic—a lack of centralized control—means that when a problem occurs, there’s no single entity that can shut down a network. And a security issue with one blockchain node, unlikely as it may be, can affect all of the others. “Health care institutions will need strong vulnerability management programs and shared security standards,” says Mitch Parker, executive director of information security and compliance at Indiana University Health. “We really need to address these things before we start broadly implementing the technology,” he says.

In addition, perhaps the greatest hope for blockchain—that it could solve the many problems of EHRs while giving patients more control over them—may be further off than the pioneers had hoped. Pilot projects have been slow to roll out, impeded by technical challenges and regulatory obstacles. “Blockchain was initially viewed as a possible way to start over and rebuild EHRs,” says Parker. “But we’re finding that’s not possible right now, and instead we’re implementing blockchain as a way to augment the systems we already have.”

Another hurdle is that blockchain can’t yet support the speed and volume requirements of EHRs. At Beth Israel Deaconess Medical Center in Boston, for example, hundreds of patient record transactions are processed per second—whereas blockchain systems, because of their decentralized architecture, can currently handle just seven transactions per second, says Manu Tandon, chief information officer for the center.

Still, for blockchain pioneers such as Phil Baker at Good Shepherd Pharmacy in Memphis, the technology is already making a difference. The network has taken its first steps toward using blockchain to re-dispense oral doses of chemotherapy drugs for cancer, a month’s supply of which can cost more than $30,000. Its proof-of-concept project expanded inventory collection beyond traditional sources, such as pharmaceutical companies, to include individuals, who are the largest potential source of unused medication. Now any of these donors can contribute unused cancer drugs, and patients can register to request them. So far, the consortium has collected a stockpile of medicine worth more than $2.2 million that it is distributing through partner pharmacies in Tennessee, Georgia, Iowa and Texas.

Those donations and more to come, distributed through a widening network, provide an early demonstration of how blockchain can be put to work: solving problems that once seemed intractable, and saving money and lives along the way.