Blockchain Can Help Advance Healthcare Data Management Solutions

Rachel Wolfson

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| 5 min read

Advanced data management solutions within the healthcare sector are becoming increasingly important as organizations realize the need to manage, govern, exchange, and analyze both internal and external datasets.

In addition, providing adequate data protection has become a major concern for healthcare companies. According to data from Atlas VPN, 87 million patients in the United States fell victim to data breaches in 2023. This number has more than doubled in comparison to the 37 million patients impacted in 2022.

Blockchain for Data Management

To solve these challenges, organizations have started to combine blockchains with other technologies to create more efficient data management systems.

Amber Hartley, Chief Strategy Officer at BurstIQ – a blockchain-based platform-as-a-service –  told Cryptonews that the healthcare industry has long relied on traditional data management methods that perpetuate data silos, making it difficult to connect information.

“Traditional data management is only designed for internal data,” she said. “It is not designed for the numerous organizations, vendors, partners, applications, and individuals who own, control, trade, and analyze data in multi-sided data ecosystems.”

To address this concern, Hartley explained that BurstIQ has combined blockchain technology with machine learning and privacy-enhanced technology to create “smart data.” Hartley said smart data builds privacy, permissions, history, context, and trust directly into generated data across various sectors.

“Data privacy is no longer bound to the security of the database it lives in, as privacy and security are embedded within the data itself,” she said.

Hartley explained that smart data is stored on BurstIQ’s data management system, LifeGraph, which is currently used by a number of healthcare organizations.

For example, she noted that The Colorado Department of Health Care Policy and Financing – which manages Medicaid data for 1.5 million Coloradans – incorporates LifeGraph within their Medicaid Enterprise Solutions Integration platform.

“This allows for the management of data quality, unification, governance, and security across the agency’s numerous vendors, sub-systems, and partners,” she said.

In regards to the role that blockchain plays, Hartley explained that this allows for efficiencies such as data encryption, self-sovereign identity, and privacy-enhanced technology.

“Blockchain provides the ability for patients to control their identity and data. When coupled with smart consent contracts, it allows a patient to grant access to some or all of their information,” she explained, adding that leveraging blockchain enables secure multi-party computation (MPC). “This means parties can jointly analyze data without revealing their inputs.”

Establishing Trust in a Trustless System

Kurt Nielsen, President of the Board at Partisia Blockchain – a platform that enables advanced MPC for public blockchain networks – told Cryptonews that MPC essentially enables trust in a trustless system.

He explained that Partisia is also designing a data management solution that uses MPC with private patient healthcare data provided by Verida.

“The Partisia blockchain is a privacy preserving computation network which needs access to private data,” he said. “The Verida Wallet and Verida Network provide an on-ramp to provide private user data to the Partisia blockchain, for new types of privacy preserving data processing use cases.”

The Verida Network is the first self-sovereign database network for storing private data.

The Verida Network is decentralized public infrastructure #DePIN providing secure and private database infrastructure for users to own and control their private data.


— Verida 💜 (@Verida_io) January 3, 2024

To put this in perspective, Nielsen explained that patients may eventually use the Verida Wallet to claim their healthcare or fitness activity tracking data from multiple third party systems. Verida CEO Chris Were noted that these types of datasets are stored and encrypted on the Verida Network, meaning information is only accessible by the user.

Nielsen added that a healthcare research organization could then build an application to request and process verified, anonymous healthcare data for research purposes.

“In this case, the research organization would utilize the Partisia blockchain and Verida developer software development kits to build an application that requests private data from a user’s Verida Wallet and submits it to a privacy preserving smart contract on the Partisia blockchain,” he said. “The smart contract would accept the data of many users and produce a research output of valuable data; all obtained with consent, anonymously and with full data privacy.”

Although this solution is still underway, Nielsen shared that Partisia and Verida have been working closely with healthcare organizations to enable better data analysis while preserving privacy around patient data in a regulatory compliant manner.

“With additional regulatory friendly features like Jurisdiction Management that allow for GDPR compliance, and proven use cases, we feel comfortable in users beginning to adopt a new way to share the use of patient data,” Nielsen remarked.

MPC technology may also make it more difficult for hackers to gain unauthorized access to patient data. This is because centralized data storage is removed, as data becomes decentralized across a user base.

According to a Fireblocks blog post, MPC has become one of the primary technologies crypto wallet providers and custodians utilize to secure crypto assets due to its advanced security. However, MPC systems are still hackable, as Fireblocks recently identified a set of vulnerabilities known as “BitForge” that pose a threat to crypto wallets that use MPC technology.

Challenges May Hamper Crypto Adoption

While it’s notable that blockchain technology can create efficiencies for healthcare data management systems, a number of challenges may hamper adoption.

For instance, Nielsen pointed out that organizations may be hesitant to incorporate blockchain due to privacy concerns. “Traditional blockchain networks provide transparency, which may be concerning,” he said.

Given this, Hartley noted that health data should not be stored on public ledgers. Rather, she believes that blockchain for healthcare use cases should be leveraged as part of a broader service stack, providing benefits such as privacy-based capabilities.

Were further mentioned that while the Verida Network uses blockchain technology, it’s not a blockchain itself. “Therefore, user data is not stored on a blockchain network or in a public domain,” he said.

As Hartley remarked, healthcare firms should understand that blockchain alone will not ensure data privacy or regulatory compliance. She explained that when blockchain is combined with other privacy-enhancing technologies, however, it can offer significant advantages with respect to data privacy and security.

“To be considered by healthcare companies, blockchain companies must demonstrate that their technologies can meet the stringent data privacy and security requirements outlined in HIPAA, HITECH, 42 CFR Part 2, and numerous other regulations,” she said.

Unfortunately, Hartley thinks that the fundamental architecture of blockchain implementations makes it very challenging, if not impossible, to meet these standards. Yet she still believes that as technology advances, web3 services such as blockchain will be essential to broader adoption. “Specifically when unifying digital experiences across a person’s health journey,” she said.

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