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What is Health Information Exchange (HIE) and how can blockchain transform it?

health information exchange

The healthcare industry serves to be one of the largest enterprises, consuming around 10 % of GDP across the developed nations. Despite radical innovations in medicines, vaccines, drugs, and clinical trials, it needs significant overhauling in sharing health information.

When it comes to data storage and sharing, the conventional systems are slow, vulnerable to attacks, and have a minor role for patients. Even data sharing is challenging to some extent due to variation in standards and data formats. However, we need to focus on few factors in context to healthcare data sharing mechanism:

  • Maintaining privacy and the consequences due to its failure in legal and financial systems.
  • A centralized source in data sharing system and the risks involved in data security.

The failure of central storage may risk the storage of medical records of patients. With an increase in patients’ data from various sources like physicians, wearables, lab reports, the health-information exchange may experience pressure to scale up the infrastructure and support multiple data sources.

While discussing the current scenario, the centralized and cloud-based database of EHR remains unportable. Regardless of controlled access and de-identification, the centralized databases cannot ensure data integrity and security. Looking at these shortcomings, we can build up a new solution using blockchain to share the data. The blockchain-based solution will provide security, reliability, data privacy and redundancy related to the Healthcare Information Exchange system.

The estimated blockchain value in healthcare was around 2.12 billion dollars in 2019. However, this value may reach approximately 3.49 billion dollars by the year 2025, with a CAGR of about 8.7%.

What is Health Information Exchange?

Electronic Health Information Exchange is a system that allows doctors, nurses, health care providers, pharmacists, and patients to access and share the patient’s medical information. This sharing mechanism undergoes greater efficiency and speed, high quality, cost of patient care, and safety.

Despite the conventional methods of storing the data on paper, the electronic health care information helps share the communication between the providers through mails, fax, or patients themselves, without any need to carry the information from appointment to appointment.

Although HIE (Healthcare-care Information Exchange) cannot replace provider and patient communication, it can help track medical records such as patient’s history, current medications, and other information during each visit.

The regular and timely sharing of medical information can improvise decision-making at the time of care and allow the providers to-.

  • Improve diagnosis
  • Reduce duplicate testing
  • Avoid unnecessary medications
  • Prevent readmissions

Electronic health information exchange cannot replace provider-patient communication. Therefore, it can help in improving the completeness of the record. This record may include the patient’s health history, current medications and other information during each visit to healthcare providers.

With the widespread availability of secured healthcare information exchange, the data gets standardized, and the transferred information gets updated in the recipient’s EHR.

Types of Health Information Exchange Apps

1. Direct exchange

This mode enables the primary healthcare providers to directly send the patient’s medical record to another healthcare professional. The medical records may include problems, ongoing medications, lab test reports, discharge records. The entire information sharing takes place in an encrypted and secured manner among the related healthcare professionals.

This information exchange is beneficial to patients and providers due to reduced routine medical procedures, testings and unnecessary visits. This form of information exchange is visible among the care providers who mutually know and trust each other and refer to patients for further treatment. This medium works best while sharing immunization data with public health organizations.

2. Query-based exchange

This form of healthcare information exchange helps to search and find accessible clinical sources on a patient. Healthcare professionals or providers make use of this form, usually in case of emergency or unplanned care.

3. Consumer Mediated Exchange

When it comes to accessing health information, the patients can manage their health care, similar to managing their finances through online banking. Patients can actively participate in healthcare by coordinating –

  • providers or professionals to monitor any health issue
  • identifying and rectifying any incorrect information
  • making changes to correct billing details

As the technology continues to evolve, the adoption of healthcare information exchange has tremendously increased, realizing patient care benefits worldwide. According to the researchers at NYeC, admission, discharge, and transfer notifications displayed a 95% rise in healthcare information exchange utilization with query-based data exchange by 102 percent.

Challenges associated with Healthcare Information Exchange

Data privacy and security are the essential objectives in healthcare information exchange. Therefore, many healthcare units need to follow the regulations to maintain the security for the easy flow of data. Below are some of the significant challenges associated with HIE.

  1. Difficulty in matching health records

    When exchanging health information, it is challenging to check patients with their precise health records due to similar names, birth year and locations.

  2. Lack of standards and variations in rules

    There exists a necessity of adhering to specific standards of Electronic Health Records while exchanging information digitally. Most providers cannot comply with state regulations to exchange patients’ health information with other states’ providers.

  3. High Cost

    HIE includes the costs of purchase, implementation, participation in local or state healthcare units, and vendors’ transaction charges.

  4. Summary document

    Some HIE organizations comprise only a summary document. It could not give detailed information for further treatment of patients.

  5. Patient Consent

    Patients authority and permission are significant challenges in exchanging health information on different platforms. There is always a legal threat if the information is shared without the patient’s consent.

These are some of the persisting challenges that have to overcome through – a technology that can record digital events and create immutable and distributable information with security against fraudulent cases.

Why choose blockchain technology to develop HIE systems?

Some of the blockchain features can be very effective in improving healthcare information exchange systems. They are as stated below:

  • The decentralized nature and distributed ledger system of blockchain remove the need for a central authority. Therefore, blockchain can control patients’ records, verify the clinical tests, and update medical credentials and security to the medical supply chain.
  • Blockchain-enabled HIE can understand the interoperability and integration steps for different health IT systems. It will reduce the cost of current intermediaries and improve efficiency in the flow of information.
  • Blockchain prevents intermediation in the data sharing process. It will protect the data and be very useful while managing insurance claims, PHI, and other medical records.

With the scope of blockchain in healthcare being explored and experimented with by many companies, blockchain has been approved to be an irreplaceable healthcare platform tool.

Right from medications, enhanced payment options, and patient health history decentralization, blockchain can fortify healthcare information exchange governance most securely.

The HIE allows care providers to hit two targets at a time –

  • Maintaining the privacy of public health records.
  • Engaging the patients to take in-charge of their medical records.

Following are the key improvements in terms of security introduced by blockchain:

  • Adequate protection with public/private key access.
  • Enhanced data integrity through a distributed ledger.
  • Allowing seamless integration of internal systems with APIs.
  • Improved electronic prescriptions with decentralized, trust-based, secured information exchange.

Blockchain to overcome Healthcare Information Exchange Pain Points

Blockchain technology is not an elixir for data standardization or integration. Still, it provides a trustful distributed framework to magnify healthcare information exchange across various users and stakeholders.

Due to the multiple shortcomings of healthcare information exchange, a blockchain-based system ensures a more secure, efficient, and disintermediated flow of information exchange. Some of the pain points of HIE and their solutions using blockchain are mentioned below.

Pain Point 1: Building a secure network needs healthcare information exchange to act as an intermediary for point-point sharing and keep a paper record of exchanged data.

Blockchain Solution: Removes the need for an intermediary as all users have access to a distributed ledger for conducting secure information exchange, irrespective of brokered trust.

Pain Point 2: The synchronization of multiple patient identifiers gives rise to the Master Patient Index challenges while securing patient privacy.

Blockchain Solution: The distributed framework enables the use of public and private digital identifiers. Cryptography makes them more secure and authentic patient digital identifiers.

Pain Point 3: High cost per transaction with low volume channels minimize the business case for centralized systems.

Blockchain Solution: Disintermediation reduces the cost factor, and real-time operation makes the system more efficient.

Pain Point 4: -Variation in data standards affects interoperability as the records become incompatible in the system.

Blockchain Solution: Data sharing enables real-time updates throughout the network. Therefore, records remain compatible without affecting interoperability.

Pain Point 5: Healthcare information exchange incorporates very few integrated records sources, thereby providing limited access to population health data.

Blockchain Solution: Distributed ledger allows secure access to patient longitudinal health information.

Pain Point 6: Inconsistency in protocols prevents the proper health organization from accessing the correct patient data at the right time.

Blockchain Solution: The blockchain-based Smart contracts build consistency and regulations-based methods with consent to access the patient information for selected health organizations.

To be more precise, blockchain is a technology that shares, maintain immutable records and stores transaction records. It relies on cryptographic techniques to allow interaction (storage, exchange and viewing information) across the network. It gives a picture of how the blockchain functions as a technology.

How to develop a Health Information Exchange App on Blockchain?

For the organizations looking to develop blockchain solutions in healthcare information exchange, this four-step process will simplify the complex questions revolving in your mind. The following four processes will give a correct understanding of the blockchain framework.

Developing an HIE app on blockchain includes the following stages:

Step 1: Initiation

When looking to opt for blockchain projects, make sure whether the technology suits your objectives. Blockchain can work wonders if the following four conditions are met.

  • When multiple parties are involved in transactions, that changes the shared information.
  • When parties need to trust the validity of transactions.
  • When intermediaries are not efficient or trustworthy.
  • When high-end security is required to protect system integrity.

Step 2: Design

Once you have decided to initiate blockchain, the next step is to design the use cases. While planning and designing, you need to focus on two prime factors.

  • Verify and authenticate information
    Verifying patients’ digital identity, genetics data, and prescription history will give their medical records precise ownership. This feature will allow the consent and revoke provider access to their medical information. However, the providers will issue the prescriptions on the blockchain.
  • Transfer value
    Organizations can adapt the technology for transferring the values associated with intellectual property rights or cryptocurrencies.
  • Strengthening
    The system gets ultimately strengthened through applications like smart contracts. It can help find out when to transfer the information, exchange value, or trigger events. It serves to develop more applications on blockchain technology in the health care sector, comprising prior-authorizations and auto-claim processing.

Step 3: Implementation

Health care organizations may look up for the criteria to implement blockchain solutions. Depending upon the necessity, it is essential to decide the type of blockchain(public, private, consortium), platform (Stellar, Hyperledger, Ripple, etc.) and consensus protocols before implementing the solution.

Blockchain-powered solutions are for specific transactional data events, which need to be shared across a network, especially where transparency and collaboration are mission-critical.

Let’s dive deep into the blockchain interoperability mechanism. Being aware of all the factors necessary for blockchain functioning, such as

  • Ubiquitous network infrastructure.
  • Verifiable Identity and Authentication.
  • Authority of EHR accessibility.

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How does Blockchain work in Health Information Exchange?

Blockchain in the Health Information Exchange system works in the following manner.

blockchain in hie

Step 1: Make use of the Public hash key to replace the patient’s identity.

Hash represents a unique numeric value. This hash is used to replace the patient’s identity. When a hash replaces a user’s identity, attackers cannot decode the identity and the protected health information (PHI). Due to de-identification, the data regarding the patient’s name, address, financial information and security number gets removed.

Step 2: Make the information to be HIPAA compliant.

It is always essential to make the information compliance-ready before saving it on the blockchain. HIPPA (Health Insurance Portability and Accountability Act) compliance protects the patient data. According to HIPPA’s privacy rules, the involved members can access and disclose only deidentifiable data.

Step 3: Store information on the blockchain and transactions get executed with Unique Identifier

When health organizations or care providers provide service to patients, the patient’s entire data gets saved with a public key on the blockchain. The patient’s data may include gender, age, date of birth, diagnosis, care plan, treatment procedure, etc. The information provided by health vendors, care providers, or insurance companies gets stored on the blockchain in the form of transactions by triggering smart contracts. If any healthcare provider needs to access a patient’s public data, the information gets displayed only after matching the transaction ID.

Step 4: Healthcare organizations generate a query to the blockchain

Healthcare institutions or organizations can create and submit the queries through APIs. At this stage, non-identifiable information such as age, gender, etc., becomes accessible through smart contracts.

Step 5: Patient shares the public /private key with Healthcare Units

The public keys of patients are directly linked to the blockchain data. When the patients share the public or private keys with healthcare units, their information becomes visible.

When it comes to information storage, blockchain as a transaction layer can store the data in two ways:

  • On-chain – Here, the information is stored directly on the blockchain. For example, hash codes, transactional information, audit records and the metadata about the off-chain storage.
  • Off-chain – Here, the information is stored with links on the blockchain. These links act as pointers to the information stored separately like conventional databases.

For example, blockchain cannot store abstract data like MRI, X-ray images. Therefore, such type of data exhibits the need for links to separate locations.

When the medical information is directly stored, the blockchain ensures security and readability to permissioned access parties. Simultaneously, ample data file storage also hampers the block processing speeds and exhibits the challenges to scale up the system.

What to consider while building blockchain solutions for Healthcare Information Exchange?

Despite the various healthcare sector opportunities, it requires many factors to consider while building a blockchain solution. The technical, economic and behavioral challenges need to address before adopting blockchain in various organizations. Here are the technical constraints to consider :

1. Data Standardization

Apart from permissioned and permissionless access, it is important to consider the size of information stored on the blockchain. The free form submission of data like doctor notes can affect the transaction size and the blockchain’s performance. The blockchain can operate efficiently with some medical history, demographic details and codes to access the services.

It is always crucial for the organization to align with the framework before defining the data, size, and format to be submitted. This strategy will assist in standardizing the incorrect data and monitor the performance of blockchain. Data can also be condensed by concatenating and deconcatenating the stored information through APIs and then broadcasting. Even the blockchain has privacy with restricted access to registered organizations.

2. Adoption and Incentives for Participation

Technically, nodes must supply the computing power for generating the blocks right after completing a transaction. Two levels of incentives are to be taken care of for the successful functioning of any blockchain.

In the case of permissioned blockchains, participation is governed through financial incentives or an approach to blockchain data exchange while processing transactions.

For permissionless blockchain, monetary incentives like cryptocurrency uprises individuals for delivering their computational power.

Besides these technical considerations, organizations should support adopting the technology in a shared network. Most organizations are at the forefront of testing the technology to verify, monitor medical claims and records internally. These overall tech-needs are possible by implementing blockchain as the increase in users’ number will enhance the shared network’s efficiency.

3. Balancing transaction volume and available computing power

Permissionless blockchain enables broad access and utilizes maximum computing power. Apart from these benefits, permissionless blockchain is prone to face transaction volume constraints, prohibiting speedy processing time.

On the other hand, the case is reverse in terms of permissioned blockchain. However, it is essential to look up to balancing the scalability constraints while implementing blockchain.

4. Cost of Operation

Health and government sectors invest a tremendous amount of money in developing conventional information systems to manage the data exchange, troubleshoot activities, update field parameters, and back-up measures. Implementing blockchain as an open-source technology with distributed nature can reduce the cost of these subsequent operations.

The configuring parameters in blockchain remove the necessity of frequent update and troubleshoot schemes as the records are immutable and stored across all participants. It is unpredictable to define the organization’s operation cost, as it depends on the utility of computing power through volume and size of transactions.


A blockchain-based solution in Healthcare Information Exchange ensures trusted views of patients’ health, develops new insights, and supports the evolution towards value-based care. Due to enhanced transparency, security and easy access to information, blockchain can garner transformative changes for adequate safety, quality of vaccines, medicinal drugs, testing and treatment procedures.

Capitalizing on this technology will have widespread implications for stakeholders in healthcare ecosystems. However, the tremendous transformative changes with the nationwide blockchain network can connect fragmented HIE(Health-care Information Exchange) systems and generate insights for better health outcomes.

If you are looking to develop a health information exchange system on the blockchain, you can discuss your requirement with our blockchain experts and get started.

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Author’s Bio

Akash Takyar
Akash Takyar
CEO LeewayHertz
Akash Takyar is the founder and CEO of LeewayHertz. With a proven track record of conceptualizing and architecting 100+ user-centric and scalable solutions for startups and enterprises, he brings a deep understanding of both technical and user experience aspects.
Akash's ability to build enterprise-grade technology solutions has garnered the trust of over 30 Fortune 500 companies, including Siemens, 3M, P&G, and Hershey's. Akash is an early adopter of new technology, a passionate technology enthusiast, and an investor in AI and IoT startups.

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