Emerging Technologies

How blockchain can improve data security in healthcare

Blockchain-powered data storage could significantly improve the security of healthcare data.

Blockchain-powered data storage could significantly improve the security of healthcare data. Image: Getty Images/iStockphoto

Scott Doughman
Chief Business Officer, Seal Storage Technology
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  • While technology is advancing healthcare access and treatment, the risk of data breaches and compromised patient data is also rising.
  • Healthcare data breaches can have far-reaching consequences including patient data exposure, identify theft and millions of lost dollars.
  • Blockchain-powered data storage can enhance the security of healthcare data, and minimize the risks linked to cybersecurity breaches.

Significant advancements in healthcare have emerged in the last decade – from telehealth, to COVID-19 tracking, to online scheduling tools that make accessing healthcare easier than ever.

While these technologies are advancing healthcare access and equality, a major risk is escalating: data breaches and compromised patient data.

Healthcare data breaches are a global concern, with far-reaching consequences that extend well beyond the headlines. Patient information exposure, privacy compromise, identity theft, fraud, lawsuits and millions of lost dollars are just some of the alarming ramifications.

Amidst this growing challenge, the need for more secure, verifiable, and compliant healthcare records becomes increasingly critical, not only for healthcare providers but also for the patients they serve.


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Why use blockchain for healthcare data security?

Patient data, medical records, insurance claims and treatment plans must be better secured than they are currently and, fortunately, a solution is emerging in the form of blockchain-powered data storage.

By utilizing blockchain-powered storage, healthcare providers can now significantly enhance the privacy and integrity of medical data, minimizing the risks associated with unauthorized access and breach.

Blockchain architecture uniquely provides three benefits that enable a new level of security for healthcare:

  • Blockchain is decentralized and by distributing data across a decentralized network, healthcare organizations greatly reduce the risk of data loss by removing a single point of failure.
  • Data secured by blockchain is protected by cryptographic algorithms that provide a mathematical certainty that the data cannot be breached.
  • Blockchain accounts for any and all data access, making it tamper-proof.

Blockchain ensures verifiability, traceability, and complete immutability of data records. Data integrity must be a cornerstone of cloud storage and blockchain technology guarantees that.

High costs of a healthcare data breach

The healthcare industry maintained its position as the most expensive sector for cost of data breach for the 13th consecutive year, according to the 2023 Cost of a Data Breach report by IBM.

While the number of attacks has remained steady, the rise in hacker sophistication in the healthcare sector has made breaches harder to prevent and more damaging, compelling organizations to prioritize and rethink cybersecurity efforts.

The IBM report underscores the urgency for the healthcare industry to address cybersecurity comprehensively and proactively as it continues to face evolving threats every year.

This is why the use of blockchain-based data storage is imperative for healthcare. Sensitive medical data, diagnostic images, patient records and all confidential information must be perfectly protected.

Decentralized storage not only enhances security but also contributes to substantial cost savings, as data breaches can be extremely costly due to the inevitable financial and reputational damages.

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Decentralized storage can eliminate those costs by preventing data breaches in the first place. Additionally, large healthcare data sets can be stored inexpensively compared to traditional storage, making decentralized storage a cost-effective option to store healthcare data.

Given the sensitivity of healthcare data, it is incumbent on service providers to demonstrate a level of operational excellence through compliance standards such as SOC 2 and HIPAA. SOC2 sets a broad operational control standard, while HIPAA specifically targets the healthcare sector.

These standards are primarily focused on establishing measures to recognize and counter risks related to factors like data availability, privacy, confidentiality and security. Blockchain storage, with its risk mitigation controls, offers healthcare data custodians a reliable solution.

Healthcare data breaches: a wake-up call

Hospital and clinic operator HCA Healthcare, one of the largest healthcare providers in the United States, experienced one of the most significant healthcare data breaches in history this year. Given that it impacted 11 million patients in 19 states, the breach served as a reminder for healthcare providers to reassess their cybersecurity measures.

The breach was attributed to a theft from an external storage location used for email message formatting, exposing sensitive patient information such as names, addresses, contact details and appointment dates. In the wake of this breach, HCA Healthcare dealt with five court cases from affected patients in multiple locations.

Another example comes from a data tampering breach that occurred over seven years. Jelly Bean, a communications firm that hosted a site containing Florida children’s health insurance data, failed to patch website vulnerabilities, exposing more than 500,000 applications and sensitive patient data.

The US Department of Justice has emphasized the need for government contractors to uphold data protection responsibilities, signalling its intent to hold companies and management accountable for cybersecurity breaches.

These incidents underscore the importance of robust data security measures for healthcare providers, urging them to reassess their cybersecurity strategies to safeguard patient data.

Rising patient concerns about data security

The rising frequency of healthcare data breaches in 2023 has also led to heightened patient concerns around the security of their medical records. Indeed, a recent survey found that an overwhelming 95% worry about the potential theft or online leaks of their sensitive health data.

The large volume of reported data breaches in the healthcare sector has contributed to these concerns, with more than 41 million healthcare records being reported as breached in the first half of the year. Patients are increasingly distrustful of healthcare providers managing their data, heightening the need for better data handling and privacy.

Trust is a core element of blockchain technology, making it a solution to address these concerns. Blockchain's immutability provides a secure environment for patient data, relieving concerns and restoring trust.

It is crucial for the healthcare industry to employ safer methods of securing data. New data collection technologies are proliferating at a rate never seen before, contributing substantially to the explosion in data volume globally.

What may have worked in the past, is no longer effective today, and certainly will not work in the future. Examples like Snark Health in Kenya, AID:Tech in Tanzania and Mediconnect in Uganda showcase blockchain's potential to enhance healthcare delivery, reduce fraud and improve transparency.

Patient trust, data integrity, verifiability and accountability are imperative, and blockchain technology can meaningfully support these essential elements to help guarantee a safer future for healthcare.

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