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Current Challenges in the Healthcare System

$1 Trillion of Wasteful Healthcare Spending

By Aditya Raj

Healthcare Spending

  • $6 Trillion: National Healthcare Spending (NHS) by 2027
  • $1.2 Trillion: of wasteful NHS
  • 10% of the GDP of most developed countries

National health spending in the USA is in the trillions and increasing at a rate of five to six percent each year. At this rate, it will reach around 6 trillion in 2027, which is roughly 20% of the GDP. If we compare with Europe, almost 10% of the GDP of most developed nations goes into healthcare spending. It is this wasteful healthcare spending that holds tremendous saving potential and a business opportunity worth billions, if not trillions.

There is vast value that needs to be captured and that's why we bring your attention to these problems, that is 20% (1.2 Trillion) of the National Healthcare Spending (NHS) out of 6 trillion, is wasteful spending. The waste lies in the failure of care delivery, failure of care coordination, low value care, fraud and abuse, and administrative complexities.

Let's talk about the current challenges in detail. We have divided them into three different verticals: healthcare fraud, healthcare inefficiencies and healthcare data privacy. When we talk about fraud we are referring to the medical billing fraud, drug counterfeit, clinical trial, misreporting, illegal referrals, consumer deception fraud. When we talk about inefficiencies we are talking about unnecessary admin cost, data interoperability, duplication of efforts, drug price variance. When we are talking about data privacy, we are referring to cyber security, data ownership, monetisation and digital identity management.

These are some of the challenges where Digital Ledger Technology (DLT)/blockchain can help to solve the key issues like interoperability - once we have every data transactions on the blockchain, everyone will be speaking the same language so they can interoperate. Data integrity - because of the immutability part, nobody can tamper with the data so the integrity of data is preserved. Security - inbuilt because every transaction is cryptographically hashed and there is a public private key mechanism. Reduced maintenance cost - because of the removal of intermediaries, and smart contracts will reduce a lot of CAPEX and OPEX.

Drug Authenticity

  • 30% of the drugs are counterfeit
  • $200 Billion of waste every year
  • Fragmented supply chain infrastructure
  • Multiple intermediaries
  • No trust

Problem: 30% of the drugs are fake and that leads to 200 billion dollars of waste every year according to the World Health Organisation. Billions of dollars each year are spent in sales and large sums of money are spent on anti-counterfeit measures. This is majorly due to huge gaps in pharmaceutical supply chains such as fragmented and opaque supply chain infrastructure, multiple intermediaries, making it difficult to trace the origin & different companies adopting different systems, leading to multiple solutions.

Solution: So what can we do about it? For the traceability part - if you remember blockchain is immutable. It has all the record time stamped on an immutable ledger so you can do the audit trail and know the history of where the drug is coming from. Aspects of being secure, traceable and immutable allows for drug authenticity and prevents people from counterfeiting or faking it.

This is a really nice use case where blockchain can truly help in traceability and knowing the provenance of any product. Blockchain can greatly limit the impact of drug counterfeit in the global market by revolutionising supply chains.

Clinical Trial

  • 85% of the clinical trial fails to meet enrolment timelines
  • 50% of pharma market research companies enrol one or no patient
  • 20% of cancer clinical trials fail because of inadequate patient recruitment
  • $1-2 Billion: cost of developing one drug

Problem: It is worth mentioning that when researchers examined how many patients were aware of ongoing and available clinical trials, they found that a mere 16% of patients were actually aware of relevant clinical trial options during the time they were considering treatment options. That means approximately 85% of the patients had no idea that any valuable clinical trial were in operation or that they could have benefited from a treatment that the trials offered.

To think that so much money and time is spent on developing a drug and almost none is spent on finding patients for clinical trial is astounding and the public should be made more aware of it.

Solution: So how will blockchain revolutionise clinical trials? It will be able to directly increase the quantity and quality of patients recruited for clinical trial in a number of ways. This type of distributed ledger could allow individual patients to store their medical data anonymously thereby making it visible to trial recruiters, who can then reach out to the patients if their data qualifies for the clinical trial.

It could also streamline the communication between doctors and patients during the trial. Blockchain has the tools to provide smart contracts that endorse transparency and traceability over clinical trial sequences, which can provide financial incentive for patient participation and data sharing.

Health Record Management

  • 86% of the mistakes in healthcare are administrative
  • 80% of medical errors are due to miscommunication
  • 75% of health data breaches in the past 7 years were due to hacking
  • 400000 deaths per year to medical errors.

Problem: In the healthcare sector there are an astonishing 30 billion transactions every year. Out of those 15 billion are faxes. These old methods of transacting and data transfer are widespread and cost $250 billion every year - – a problem that could be fully addressed with digitisation and blockchain. By putting data and transacting data on a chain so that you can remove most of those outdated transactions and in turn reduce costs.

It is a chilling, yet often overlooked reality that annual mortality statistics show that 400 000 people die every year because of medical error mistakes. We are talking about the administrative mistakes. 75% of health data breaches in the last seven years were due to hacking. These kinds of administrative errors that are causing 400 000 deaths every year make it the number 3 killer after cancer and heart disease in USA. This is absurd.

Solution: These kinds of data breaches and administrative errors are easy to remove or mitigate with blockchain because blockchain can automate processes and remove intermediaries. This prevents manual data entry or administrative mistakes and resolves the data breach problem with access control – as blockchain provides access based on authorisation and a cryptographically secure public private key. We can also boost it with IoT and AI so that people can really take informed and intelligent decisions and some of the processes can be made intelligent and automated with the help of the trio/triad: IoT, blockchain & AI.


Blockchain is seen as the silver bullet that can solve any problem in any business. But when we talk about the healthcare sector and see the wasteful spending of more than $1 Trillion, blockchain becomes the silver bullet that can help save a large chunk of that $1T and create a lot of value for the healthcare sector, as well as opportunities for new businesses to capture the market. Blockchain technology can efficiently solve several problems plaguing the healthcare industry today. Blockchain can enable novel healthcare solutions acting as a trust mediator. It can enable novel business models that may lead to a new dynamic among various healthcare stakeholders like patients and providers. In this case blockchain will act as an incentive machine.

Blockchain is the horizontal innovation that will swipe all the siloed verticals of the industry and transform the whole industry for the better. I like the analogy of blockchain and the train. Blockchain is the locomotive going down the tracks, either you can jump in front of the train or you can jump on board. The choice is yours and why not jump on board by joining the Blockstart Programme.


  • SMES from Agrofood, Healthcare & Logistics
  • Vouchers worth €60000+ available now

It's a free training programme to increase awareness and understanding of how blockchain technologies will impact your sector and business.

The programme is tailored to each participant's needs. You can select from a wide range of options - including training sessions, workshops, and webinars - and discover the potential impact of blockchain with the support of the Blockstart partners and our network of transnational experts!

So, if some of the use cases have triggered your thoughts and made you realise the potential of Blockchain for your company then do not waste any further time and apply to our FREE TRAINING PROGRAMME and we will take it from there.

See you in the Blockstart Programme.

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