In the constantly evolving realm of healthcare supply chains, Blockchain Technology and Smart Contracts shine as transformative forces. These groundbreaking solutions provide a secure and transparent approach to the complex challenges inherent in healthcare supply chains. They offer the promise of automation, heightened transparency, enhanced efficiency, and reduced service durations. In 2022, the global blockchain technology in healthcare market size surged to $ 1.97 billion, and it’s poised for exponential growth at a compound annual rate of 68.40% from 2023 to 2030. However, despite remarkable strides in treatment methodologies, the efficiency of healthcare supply chain management remains an enduring challenge. Traditional systems often prove time-consuming, lack synergy among stakeholders, and remain susceptible to human errors.
In this blog, we will dive deep into the transformative potential and fundamental principles of blockchain and smart contracts in healthcare supply chain management, gaining insight into their practical applications within the healthcare industry.
Blockchain and Smart Contracts
Blockchain, a distributed ledger technology, offers the foundation for secure, transparent, and tamper-proof transactions. While it’s most commonly associated with cryptocurrencies like Bitcoin and Ethereum, its applicability extends to various domains, including healthcare supply chain management.
The functioning of a blockchain revolves around the creation of a chain composed of individual blocks. Each of these blocks holds a comprehensive record of all prior transactions. These blocks are dispersed across a network of computers, with each computer meticulously scrutinizing the authenticity of every block before granting it access to the chain. This process renders tampering with blockchain data a formidable challenge, as any alterations would necessitate modifying all blocks in the chain.
Growing at a CAGR of 21.2% during the forecast period 2022-2030, the global healthcare smart contracts market size was valued at USD 1.58 billion in 2022 and is projected to reach USD 8.92 billion by 2030. Smart contracts are self-executing contracts residing on a blockchain. Crafted in code, they possess the power to automate a spectrum of tasks, encompassing payments, data sharing, and asset transfers.
Smart contracts operate based on a predefined set of rules dictating when and how a transaction should be carried out. For instance, they can be programmed to automatically disburse payment to a supplier upon the successful delivery of supplies. Moreover, they can initiate a product recall in response to the detection of a safety issue, all without the need for manual intervention. Here are two real-life examples of how smart contracts can benefit healthcare supply chains:
Blood Type Availability: Sometimes, different locations have varying supplies of blood types, making it challenging to get the right blood when needed. Smart contracts can help by providing visibility and automating the process, ensuring that the required blood types are readily available.
Resource Utilization: In healthcare, valuable resources like medical materials and medicines often go to waste because there’s no efficient tracking system. Smart contracts can prevent this waste by creating a system that tracks these resources effectively. Using IoT-based smart contracts, packages are assigned unique keys, and their information is stored on a secure ledger. This system also includes details about the package’s location and the medical facility that owns it, ensuring resources are used efficiently.
The Connection Between Blockchain and Smart Contracts
Blockchain and smart contracts are complementary technologies that orchestrate a more efficient, secure, and transparent healthcare supply chain. Blockchain provides the foundational infrastructure for secure and tamper-proof transactions, while smart contracts automate many of the manual tasks intrinsic to supply chain management.
Evolving Beyond Traditional Transactions
Before the advent of smart contracts, healthcare transactions were entangled in traditional, paper-based methods, manual verifications, and intermediaries such as lawyers and notaries. The introduction of smart contracts revolutionized the transaction landscape by automating and streamlining processes, eliminating intermediaries, and amplifying transparency.
Secure and Efficient Transactions through Smart Contracts-based Blockchain
Enhanced Data Integrity
Blockchain, a distributed ledger, is the bedrock of this revolution. It leverages encryption and immutability to record transactions. Each transaction becomes a link in an unbreakable chain of blocks, akin to an inviolable ledger. Within healthcare supply chains, this translates into meticulous tracking of the journey of medical products, guaranteeing impeccable data integrity and thwarting unauthorized modifications.
Smart Contracts, seamlessly integrated into the Blockchain, introduce a valuable layer of compliance enforcement. Policies pertaining to compliance, security, and privacy are encoded into the system, leading to automated validation of transactions against predefined criteria and unwavering adherence to compliance standards pertaining to the healthcare supply chain industry.
Smart Contracts-based Blockchain is meticulously designed to enhance accountability across all stakeholders. It ensures the supply chain transactions stand out in their transparency, traceability, and comprehensive visibility to all participants within the chain. This heightened accountability bolsters the security and integrity of the system.
Reduced Administrative Overhead
The conventional approach to healthcare supply chain management often involves an overwhelming volume of paperwork and manual record-keeping. Smart Contracts-based Blockchain steps in to streamline the process, resulting in substantial reductions in administrative overhead.
Seamless Data Sharing
Every participant in the system maintains their copy of data or records, ensuring uninterrupted access. This data sharing occurs seamlessly while maintaining compliance, authorization, data privacy, and security standards through Smart Contracts.
Smart Contracts seamlessly integrated into the Blockchain streamline payment processes, ensuring swift and hassle-free payments to suppliers. The restocking procedures in the healthcare supply chains become a well-orchestrated symphony, directed by automation.
Smart Contracts exhibit the capability to automatically trigger specific actions, such as sending notifications or sounding alarms to prompt stakeholders when specific events unfold. This feature introduces real-time responsiveness throughout the system.
Blockchain and smart contracts are poised to revolutionize healthcare supply chain management. At iQuasar, we stand at the intersection of software development and the pressing needs of businesses operating in the healthcare industry. We understand that the healthcare supply chain hinges on precision, efficiency, and unwavering data security. With our deep expertise in software development, we serve as the bridge connecting these cutting-edge technologies to the very heart of your challenges. We are here to navigate the dynamic landscape of secure healthcare supply chain transactions, offering solutions that go beyond mere efficiency.
Connect with iQuasar today to embark on a journey where the power of software development transforms challenges into solutions.