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Disrupting Government Healthcare with Blockchain


The healthcare industry has witnessed a surge of innovation in the past few years, fueled by advances in information technologies such as cloud, mobility, and data analytics. However, with the advent of blockchain, there has been a sudden surge of new and disruptive ideas promising generational transformation of how business is conducted in the healthcare industry. Although there is a lot of hype, blockchain has some interesting and practical applications that need to be carefully studied and evaluated. This paper will focus on the practical applicability of blockchain to government healthcare, addressing both strengths and weaknesses and how the adoption of blockchain can achieve process efficiencies, risk mitigation, and cost reductions in the long-term.

What is Blockchain?

Designed to eliminate centralized trust-based authorities, blockchain is a decentralized network that empowers a participant to conduct a secure transaction in confidence–replacing trust with enforced consensus and verification. Participants utilize Public Key Infrastructure (PKI) encryption to securely execute a transaction, which is then verified or proofed by other nodes in the network. That the transaction is then added as an immutable block into the blockchain and stored in a distributed ledger. A consensus-driven, “single source of truth” replicated in each node of the blockchain shields it from security attacks that seek to change or alter data. The decentralized and immutable nature of blockchain is its core strength, ensuring security integrity and achieving process efficiencies.

Blockchain's Vulnerability

Blockchain ensures the integrity of transactional data through cryptography techniques such as Public Key Infrastructure (PKI). Each participant or user is in possession of a visible public key and a secret private key, which are used in conjunction to asymmetrically encrypt a peer-to-peer transaction that can only be decrypted by the receiving user. However, there is a catch, participants have to have to secure access to their private keys otherwise the blockchain is no longer secure.  For example, the theft of bitcoins reported in the media recently was possible because the attacker managed to gain access to those private keys and conveniently transfer the bitcoins to the attacker’s account. Bitcoin is only one application of a public blockchain for conducting financial transactions.

Public vs Private Blockchains

Public blockchain, also known as unpermissioned blockchain, permits participation and visibility to all transactions in the network and is more pertinent to use cases such as digital currencies. It promotes anonymity, uses considerable computing resources, and consumes significant amounts of time to complete transactions–all undesirable characteristics for an enterprise or established industry. Private blockchains, also known as permissioned blockchains, limit participants and have a predefined set of validators verifying each transaction before it is added to the immutable block. Private blockchains also require and enforce participants to be appropriately permissioned to perform transactions and access data. As a result, private blockchains are better performing and still achieve efficiencies that could redefine how we conduct digital business in nearly every industry–including healthcare.

Key benefits of blockchain relevant to federal agencies include:

  1. A reduced risk profile because of the distributed ledger model that by design is immutable and  incorruptible;

  2. Increased efficiencies with the elimination of centralized databases and the accompanying management burden; and

  3. Decreased long-term operational and management costs as there is a shared responsibility across the participants in the blockchain.

Three Ways to Disrupt Government Healthcare With Private Blockchain

Below are potential federal use cases for increasing innovation in federal healthcare with blockchain:

1. Own Your EHR and Decide Who Has Access

Envision patients having the ability to be in complete possession of their electronic health records (EHR) and retaining the power to dynamically grant and revoke access to providers. Protected health information (PHI) is currently stored in siloed databases managed by each provider and is just one data breach away from compromising health privacy and the identities of countless patients. Although it would not be feasible to put the entire EHR of a patient in a blockchain (it would put a huge burden on storage), the metadata of a patient’s EHR along with access control permissions could be stored and transacted through blockchain. This limits access to patient health information, which would be securely shared with privileged providers.

2. Secure Information Exchange Within a MAC Consortium

Information exchange within a consortium of Medical Administrative Contractors (MACs) and the Center for Medicare and Medicaid Service (CMS), such as strongly structured claims data, could be securely shared and processed through a permissioned private blockchain. It reduces the security risk profile to CMS and improves efficiency by no longer having a single datastore.

3. Quality-Based Payment Models

As alternative payment models take off, quality measures can be codified and a point-based transaction process through blockchain can be implemented. This could be further enhanced with smart contracts that express scoring algorithms, automatically executing transactions (according to the criteria for awarding and deducing provider points). This approach could significantly reduce the workload burden.


Blockchain holds a lot of promise but is not a panacea to solve all the technical and security issues that we face. It’s critical to understand the technology at a deeper level so it can be applied in the most successful way. Amidst the seamlessly never-ending hype, it is important that agencies collaborate with the private sector to jointly experiment, prototype, measure, and learn through practice. This approach would ensure agencies are building blockchain applications for the right use cases, therefore, maximizing their investment.

As federal agencies gain a better understanding of blockchain and start to conceptualize potential use cases, they are bound to encounter many questions and challenges, such as:

  1. What new security controls should we define and consider for blockchain applications?

  2. How do we estimate the cost to build, operate, and maintain a blockchain application?

  3. How do we determine and rationalize the investment in blockchain?

At EGT Labs, the R&D arm of EGlobalTech, we are researching and conceptualizing answers to these questions, while also prototyping use cases that can be built using permissioned blockchain platforms such as Hyperledger Fabric and IBM Blockchain. Our focus is on federal use cases around secure data sharing and identity management.

Contact us at to find out how you can leverage blockchain at your agency! 

Copyright 2018 | EGlobalTech | All rights reserved.


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