Blockchain technology is finding its way into every industry. Healthcare is no exception. According to a recent report by Deloitte, “blockchain technology has the potential to transform health care, placing the patient at the center of the health care ecosystem and increasing the security, privacy, and interoperability of health data.” Some of the proposed applications include truly patient-centric health records, provider licensure and credentialing,  supply chain management in conjunction with predictive analytics and more accurate tracking capabilities, among many others. A recent whitepaper addresses “Innovative Blockchain Uses in Health Care” and an overview of blockchain technology. Just recently, Humana, MultiPlan, Optum, Quest Diagnostics and UnitedHealthcare announced a pilot program that will apply blockchain technology to improve data quality and reduce administrative costs around provider data management. 

Many types of blockchains exist, including public and private blockchains. At its core, a blockchain is a distributed ledger for recording transaction data. The ledger is replicated to multiple nodes across a network resulting in a decentralized network. Many applications rely on smart contracts, which are self-executing computer code, stored on the blockchain, and cause actions to be triggered upon the occurrence of certain conditions programmed into the smart contract code. A good white paper on smart contracts has been published by the Chamber of Digital Commerce.

As these use cases become implemented, a host of new legal issues will result. Given the decentralized, distributed nature of blockchain, HIPPA issues will need to be carefully considered. One of the benefits of many blockchains is that the transaction data is replicated to multiple nodes. This can create issues for protected information. This suggests that some form of private blockchain may be better suited for patient health records, perhaps combined with separating and encrypting personal health information.

The  use of smart contracts will also create interesting legal issues. Structuring these contracts in a way to ensure enforceability will be key. International law and jurisdictional issues will come into play in many cases.

As with any new technology or new application of existing technology, patents will play a role. There has been a surge in patent filings for blockchain-related technology. For an overview on patentable aspects of blockchain technology please see our recent papers on Patent Strategies for Cryptocurrencies and Blockchain Technology and Drafting Effective Blockchain Patents.

These are just a few of the legal issues that will arise as blockchain applications are rolled out in the healthcare industry. As with many new technologies, particularly as applied to regulated industries, new legal issues are sure to arise. Check back for updates on blockchain-related healthcare issues.