Healthcare Industry Insights

Healthcare Rallies for Blockchain: Q&A with Dr. Nicky Hekster

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In this new Q&A series we discuss the findings reported in the IBMs Executive Report on Blockchain in Healthcare. The IBM Institute for Business Value’s (IBV) latest study on how blockchain is applicable to the healthcare industry, surveyed 200 healthcare executives in 16 countries, who shared that surprisingly 16% of healthcare institutions – ‘Trailblazers’ – expect to have a commercial block chain solution at scale in 2017. The report has been published with great success and support from the industry. We have asked a range of experts for their thoughts on this exciting and developing area.

Here we hear from Dr. Nicky Hekster of IBM Watson Health. Nicky is a highly experienced healthcare and life science professional with a technical background and experience in various segments, including healthcare, academia and business.

Q. In your experience what type of organisations are interested and ready for the implementation of blockchain, and what is it about these organisations which differentiates and motivates them? What, if anything is holding them back?

A. Patients, and in general, citizens, are anxious when it comes to sharing their social and health data. They do not trust governments, payers, hospitals or general practitioners when it comes to the exchange and recording of their data. They need to be assured of their privacy. Security measures should be in place and must be transparent to them. In addition, with the advent of sensors and smart devices, exchanging citizen or patient recorded data, including identity, biometric and genetic data, will encounter a similar sentiment of reluctance from patients. A blockchain network, together with smart contracts, would solve the issues. The patient can see who has consulted, modified or otherwise accessed his/her data.

Pharmaceutical companies are certainly ready. When examining the entire supply chain (from pharmaceutical manufactures, shipment, distributors, hospitals, prescribing doctors, pharmacies, points of sale down and customers) a wide range of inconsistent methods of passing information and transactions are being used. The need to develop a single undisputable ledger of truth is needed. Documentation is different among various parties in the supply chain, information is being lost and unauthorised handling of goods in the chain occurs. A high number of errors and inconsistent exchange of information occurs. There are no standard rules governing the passing of transactions, verification of actors within the supply chain, nor the transaction tracking that is passed up the chain to suppliers from the end point of sale. Blockchain could certainly solve these shortcomings.

There are four prevailing themes which will be the main motivators here: it would save time, it removes costs, and it reduces risk and increases trust. The constituents of a healthcare network would be certainly motivated by these. For a hospital, claims management is error-prone and the interaction with payers is difficult and time consuming. Blockchain would reduce transaction times from days and months to instantaneous. A patient or hospital would be less sensitive to tampering and fraudulent use of data because of cybercrime. Through shared processes and recordkeeping, the whole of the healthcare ecosystem would increase trust.

The top frictions or challenges identified by the survey were ‘imperfect information’, ‘information risks’, ‘inaccessible information’ and ‘inaccessible marketplaces’[Imperfect information: Decision making impeded by inaccurate, misleading or incomplete information. Information risks: Risk of technology breaches and tampering that are difficult to plan for. Inaccessible information: Shortage of information because of standards issues or shortage of scalable computing power and storage. Inaccessible marketplaces: Assets that are underutilised or unmonetisable and do not contribute to revenue growth]

Q. Could you provide an example of an organization that currently struggles with one of these frictions and any other frictions under their current business model?

A. Collaborating hospitals/Electronic Health Records (EHRs) are suffering from imperfect information. A fully interoperable health ecosystem has yet to be realised largely due to antiquated, unsecured and opaque information exchanges. Even within a single hospital. Value-based payments and delivery system reforms, both of which require fluid data transmission, are driving interoperability and integration efforts through a coordinated use of standards. To this end, the Clinical Affinity Domains (CADs), set-up around IHE infrastructures can benefit from the security, trust and smarter contracts enclosed in blockchains. The goal of interoperable EHRs is to enable disparate healthcare systems to exchange and use clinical information, under a standard set of guidelines, designed to coordinate patient care and reimbursements. Blockchain technology may provide the solution to connect – not exchange – large amounts of information on disparate networks to a common infrastructure, to create an integrated solution for existing health IT interoperability. It allows all stakeholders to share a single version of the truth about a patient’s healthcare information. Multiple providers, in multiple sites, could access an uncorrupted, secure and universal patient record, avoiding redundant tests, procedures or prescriptions. Payers, with the right permissions, could have access to relevant information to process claims rapidly and with more precision. Patients would have transparency into the entire continuum of care. Importantly, blockchain technology would not be centralising health information in healthcare exchanges, but instead, decentralizing the system in a securely and interoperable way.

Another potential obstacle is the buy in and participation of all stakeholders. Regulators, blockchain tech providers, established consortia, government agencies, pharma, med device cos, patients are all of importance. However, it is not clear who should take the initiative, which is a problem.

Q. Based on your experience, what kind of new or underutilised markets or customer segments or geographies could blockchains help providers and payers access? And how?

A. As we have seen in Estonia, it was the government that initiated a nation-wide blockchain implementation, in support of their eHealth plans. What do we learn from this case? In a situation where the expenditures of a country are increasing solely for demographic reasons, the more extensive and systemic implementation of eHealth solutions allows for several improvements. Benefits include a system which is more flexible, increasing the health and well-being of people by exercising more efficient preventive measures, improving the awareness of citizens and saving costs. In addition, countries where no effective infrastructure is in place to underpin the health of the citizens, blockchain technology might be a good and relatively cheap option to start with. Think of the developing and underdeveloped geographies here.

Q. How can providers and payers begin to make measurable progress in achieving the anticipated benefits of blockchains?

A. They should start with a small Proof of Technology, but at the same time make it sustainable so that it does not fade away over time. They should pick the right technology partner that has track-record experience with blockchain technology, and at the same time is a subject matter expert in healthcare. This partner should be able to develop a sound business case, since blockchain technology is not the end goal, but a means of saving costs, gaining trust, making healthcare more secure, efficient, effective and value-based. That is the real aim. Some of these features are difficult to measure but will reveal themselves over time.

Q. Which use-cases should organizations focus on tackling first when implementing blockchains?

A. Determining if a given medical expense or event is covered by a member’s insurance policy or pre-authorisation can be a slow process. Multiple stakeholders are involved (consumer, provider, payer) and the amount covered can vary based on the payer-provider relationship (in-network versus out-of network). Timing is often critical, based on the nature of the patient’s medical issue, and pre-authorisation must persist through the full revenue cycle, ending with payment to the provider. Blockchain will speed pre-authorisation and enable timely treatment of the patient as well as accurate payment to the provider. The goal will be real-time determination of benefits, with the blockchain ledger shared among the stakeholders. This use case is enticing since it has to do with money flow, reimbursements and is close to the blockchain use cases in the financial world.

Q. Who do organizations view as trusted partners to overcome the barriers to blockchain adoption?

A. They tend to have to look at the forerunners that made a lot of noise in FinTech. Ethereum is an example. They have some reservations when it comes to start-ups, because engaging with those puts a substantial risk on the table. IBM is considered as a serious partner.

For blockchain to fulfill its potential, it must be based on open technology standards to assure the compatibility and interoperability of systems. IBM is committed to helping make blockchain real for business, and will put the same force behind its efforts that it did in working to mainstream Linux, Eclipse, Java, Spark, and other open source technologies. It will leverage its cloud and, for example, zSystems technology to make this work.

Only with openness will blockchain be widely adopted and flourish with innovation. To help developers quickly begin exploring the use of blockchain in the enterprise, IBM has made nearly 44,000 lines of code available to the Linux Foundation’s open source Hyperledger Project. This will help developers easily build secure distributed ledgers that can be used to exchange most anything of value. IBM also made a range of announcements spanning technology and business consulting to rapidly advance the use of distributed ledger technology across multiple industries, among them Healthcare.

Dr. Nicky Hekster can be reached on

Look out for our next Q&A where we hear from more SMEs on their thoughts on blockchain in Healthcare.

Visit IBM Watson Health Booth #1809 at HIMSS17  (Feb 19-23, 2017) to learn more about blockchain technology for the healthcare industry and meet IBM experts on it.

To learn more about IBM’s presence at HIMSS17 click here:  

Join us in the conversation at:

IBM Healthcare Twitter: @IBMHealthcare and #IBMHealthcare

IBM Watson Health Twitter: @IBMWatsonHealth and #WatsonHealth

EMEA Technical Presales at IBM Watson Health

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