From Risk to Resilience: Leveraging Blockchain to Safeguard Patient Data and Drive Interoperability

The numbers tell a startling story. Over 42% of the U.S. population is estimated to have had their healthcare records compromised in 2024 alone, exposing critical vulnerabilities within systems meant to protect patient privacy. A staggering 146 million records were impacted in 13 high-profile data breaches, including the largest healthcare breach in history at Change Healthcare, which affected an estimated 100 million individuals.

While the scale of the breaches is enough to concern healthcare professionals, the growing complexity of protecting patient data amid the rapidly evolving digital landscape is overwhelming. Hospitals and health systems are now searching for innovative data security solutions that prioritize safeguards, while still supporting interoperability and quality care delivery.

However, hospitals and health systems that rely on outdated protections risk exploitation. Updating data security and privacy protocols is critical. The healthcare industry is at an inflection point and incremental change will not arm stakeholders for the future. Small bolt-on solutions will burden aging and cumbersome infrastructure. Bold leaps are vital, and it begins with examining current data strategies objectively.

One such leap is considering a decentralized, secure framework through blockchain. For health system executives, an introductory engagement could mean managing provider rosters more efficiently and safely with increased compliance support. For payers, credentialing on the distributed ledger will not only address a significant cost area, but there is an opportunity for early adopters to turn that operational cost into a revenue stream within specific markets.

Blockchain as a framework was initially developed for cryptocurrency transactions but has emerged in healthcare as an effective solution to counter cybersecurity threats and address the urgent need for seamless information exchange. Though it may seem novel, smaller countries like Estonia have been using blockchain as an additional layer of security to support the integrity of health records since 2016.

In the U.S., a few healthcare companies are exploring blockchain applications. Humana, MultiPlan, Optum, Quest Diagnostics, and UnitedHealthcare have formed the Synaptic Health Alliance to explore the use of blockchain technology to modernize provider data management. Health insurer Elevance Health, along with the digital data management company Avaneer Health (of which Elevance Health is a founding member), have also joined forces to reduce operational inefficiencies in the U.S. healthcare system through blockchain implementation.

Increasing Velocity of Change

The velocity of change in healthcare IT has significantly increased in recent years. Supported by government-mandated guidelines, healthcare stakeholders have steadily integrated electronic health records and interoperability requirements into their workflows. As with any industry undergoing sea change, fragmented systems, data siloes, and substandard security practices persist.

Blockchain’s role as an immutable, secure ledger for patient data marks a significant breakthrough, allowing all authorized stakeholders across a network — whether hospitals, payers, or pharmacies — to access patient information efficiently and securely. The resulting accuracy across the care continuum could reduce errors and contribute to a more patient-centric healthcare experience. These capabilities are fueling exponential growth in the healthcare blockchain market, which is currently valued at $3.04 billion and expected to grow to $11.04 billion in 2029 at a CAGR of 38%.

The shift toward blockchain is just as strategic as it is technological. In addition to enabling providers to administer better care, the technology builds trust by creating a tamper-proof record of data interactions across an organization. By enhancing interoperability and providing unparalleled security, blockchain could also play a pivotal role in helping hospitals meet CMS’ interoperability mandates, by addressing key challenges around secure data sharing, patient data management, and system integration.

Leveraging Blockchain to Counter Data Threats

The risks to healthcare data security endure and the stakes are high. The 2020-2025 Federal Health IT Strategic Plan highlights the significant challenge and opportunity in leveraging big data for research, clinical discovery and real-time care.

Decentralization minimizes breach vulnerability by storing each transaction as a tamper-proof “block” on the distributed ledger. Cyber attackers must breach every single block — a task far more daunting than hacking centralized databases — which significantly reduces the risks associated with having centralized repositories vulnerable to single points of failure. Blockchain’s design also offers secure, auditable access, which inherently builds compliance into the process. When providers can confidently share information across different systems and settings in real-time, it removes the need for fragmented operations and disparate EHRs.

A Complex Shift, Not a Quick Fix

The technology has been available for years. Given the growing number of cyber-attacks and the constant battle with disparate date sources and its impact on patient care, why has adoption been slow to grow? As with any large-scale enterprise implementation, enabling blockchain for patient records in the health care setting requires a strong strategy, executive alignment, adherence to change management principles, and flawless execution. This transformation is like constructing a bridge in real time—every step requires meticulous planning, synchronized execution, and the ability to adapt to unforeseen challenges.

Moving from Liability to Transformative Data Management

With complexity of this kind, there is a notable risk management consideration. Many Chief Medical Officers fear personal liability and potential loss of medical licensure if their hospital or health system adopts new technology that exposes the organization to cyberattacks. However, the dated architecture and data strategies of the current system do not consistently and materially keep patient health records safe today. Executives will have to weigh the ongoing threat of bad actors endangering patient outcomes, and the subsequent reputational hit, against the herculean feat of implementation and greater security.

Blockchain, now widely seen as a practical solution rather than an experimental technology, is predicted to gain momentum. The risks associated with outdated data management systems are too great to ignore, and the rewards of adopting blockchain extend far beyond cybersecurity. However, technology adoption is most successful when it’s accompanied by trust. Fortunately, blockchain fosters precisely that — confidence among both providers and the patients they treat. It is time to explore a new way with blockchain technology.