Tokenizing Healthcare Assets: What Healthcare Tokenizing Means and Why It Matters

Whether it’s clinical trial results or patient information, healthcare data is highly sensitive. If it falls into the wrong hands, it will pose a significant risk to the security of every individual. That’s why hospitals and clinics implement strong security measures. Password-protected systems, cloud databases, and role-based access are a few to name.

While these are highly efficient, they do not delete the threat. If someone gains access to the main server, data theft and a security breach will be inevitable. This is where healthcare tokenization steps in! It allows companies to store sensitive information on a highly secure system, preferably a blockchain. 

In recent times, tokenization has gained traction across several industries. Finance was the first to adopt this concept. And now, healthcare is also following the same footsteps. That being said, we have illustrated what tokenization means in healthcare and why it matters. 

What Is Healthcare Tokenization? 

Every healthcare company deals with innumerable sensitive information. These include assets like:

• Electronic health records
• Biometric and genomic data
• IoT and medical device data
• Clinical trial information
• Pharmaceutical IP patents
• Billing and insurance claims

It’s crucial to protect these datasets from falling into the wrong hands. That’s why businesses prefer tokenization. It is a process through which sensitive information gets converted into digital tokens. These do not have any real-world existence. To top it off, they are stored on a distributed ledger technology, like blockchain. As centralized databases are no longer used, the risk of single point failure is greatly reduced. 

With healthcare tokenization, entities can represent:

• Data Ownership
• Usage rights
• Access
• Incentives

Types of Tokens Used in Healthcare

Different types of tokens can be created to mask healthcare information. These have specific purposes to serve. Below, we have explained a few common categories and their usage. 

1. Utility tokens are used to control access to certain services. These can include telemedicine, preventive checkups, and so on.
2. Investments in biotech startups or medical research can be represented using secured tokens.
3. Data tokens are used to represent sensitive patient information. These can be shared securely or monetized as and when needed.
4. Governance tokens allow stakeholders to vote on healthcare decisions in a decentralized system.
5. Incentive tokens can be used to reward participation in clinical trials or adoption of healthy habits. 

Benefits of Healthcare Tokenization

Patient Ownership and Data Control

With healthcare tokenization, patients will have optimal control over their data. They won’t have to rely on any third-party company or individual for record maintenance and protection. This will further help them to:

• Grant or revoke access to their data at any time without seeking permission from others
• Earn rewards after sharing data anonymously for clinical trials and medical research
• Control the visibility of data, along with who can view the information

Enhanced Privacy and Security

The healthcare tokens are deployed on the blockchain. As they are stored on the digital ledger, they become immutable. In other words, they are tamper-proof and can’t be altered. This will help prevent misuse and fraud. Here are a few advantages. 

• The number of false claims will be reduced since all datasets stored on the blockchain can be verified end-to-end.
• Drugs can be traced to their source of origin. This will reduce the chances of poor quality drugs or false transactions.
• Audit trails will help healthcare businesses maintain regulatory compliance. 

Incentivized Healthcare Ecosystems

Companies can leverage healthcare tokenization to reward individuals for their contributions. This incentive-based ecosystem will foster creative thinking, innovation, and healthy habits amongst everyone. 

1. Patients can earn tokens as rewards for participating in wellness or preventive screening programs.
2. Rewards can be given to researchers for collaboration and the sharing of the results.
3. Doctors might get an incentive for providing the best patient care through a holistic approach. 

Doing so will help companies create an engaging healthcare community. It will motivate proactive engagement, not just from doctors but also from patients. 

Data Monetization and Economic Opportunities

Patients can monetize data through tokenization. For example, they can share their genetic profiles or wearable device data with researchers. In return for their contributions, they can receive crypto tokens or NFTs as rewards. 

This will open up new economic opportunities for low and middle-income groups. To top it off, this will also increase the chances of collaboration between patients and healthcare companies. Data that was once siloed will become a valuable asset.

Faster and Transparent Payments

False insurance claims and the complex billing process have troubled the entire healthcare industry. However, tokenization can eliminate these challenges and streamline payments. Here's how.

• Access to historical health records will help insurance companies settle claims faster.
• The absence of intermediaries will ensure patients receive their reimbursements within the shortest possible time.
• False claims and other types of fraudulent transactions can be prevented with the help of blockchain.
• Smart contracts can be leveraged to automate the billing process.

Improved Interoperability

Traditional systems used across the healthcare industry are siloed. This prevents different groups from accessing data seamlessly. That's why healthcare tokenization has gained traction in recent years. It allows clinics, laboratories, insurers, doctors, and other parties to access data remotely.

The use of blockchain ensures complete transparency. To top it off, token-based access allows only those users to view the records who have the correct authorization. It prevents data misuse, errors in clinical trials, and other issues. 

Medical Research Funding and Access

The research field has benefited a lot from healthcare tokenization. Here’s how! 

1. Security tokens can be used to sell fractional ownership of patents.
2. The R&D can be made more liquid by trading IP tokens on decentralized marketplaces.
3. Utility tokens will help raise crowdfunds for clinical trials. 

Real-World Use Cases of Healthcare Tokenization

With healthcare tokenization becoming a necessity, it’s time you understand its implementation in the real world. So, below we have illustrated a few ways in which this concept can be used to streamline operations. 

1. Marketplaces can be designed to allow patients to sell their health data. This will help them earn tokens by giving access to sensitive information anonymously.
2. Incentives in the form of crypto tokens will boost trial participation. Patients can be rewarded for attending check-ins or reporting symptoms.
3. Investors can buy security tokens representing fractional ownership. Assets may include hospital shares, biotech parents, and diagnostic labs.
4. Healthcare tokens improve tracking along the supply chain. Users will know where the drugs are coming from. The authenticity of pharma products can be verified easily. 

Challenges to Expect in Healthcare Tokenization

• Classifying tokens for security and utility purposes lacks clarity. This can raise disputes amongst the stakeholders.
• Managing compliance with the local laws and global regulations will become complex. That’s because there is no standardized protocol for using blockchain-based tokens.
• Data shared in the form of tokens isn’t completely anonymous. It will raise privacy concerns amongst patients.
• Managing consents from patients will require a special system. This can incur heavy costs, especially for small-scale hospitals and clinics.
• Technical integrations will be challenging. Connecting a blockchain-based app with a legacy system won’t be easy.
• Users need to be trained properly about decentralization, token-based access, blockchain-based, and so on. This will automatically prevent immediate implementation. 

Future of Tokenization in Healthcare

There’s no doubt that healthcare tokenization has paved the way for a secure, stable, and efficient ecosystem. So, with discoveries, we can expect the process to evolve further. Here’s what the future looks like! 

1. It will help companies create patient-centric service models. Users can convert their sensitive information into tokens. To top it off, they can decide who can view the information and when.
2. Tokenization will enable a granular access control system. Users can specify what type of information they want to publicize. This will prevent the dependency on broad-scale access.

3. Researchers and healthcare providers can leverage tokenized information to offer personalized patient care.

   

Conclusion

Healthcare tokenization has a huge role to play in the upcoming years. This will change the way data is managed and stored. Control will shift towards users, allowing them to decide who can access the information. Given its growing importance, we at Web 3.0 India will help you with your token development project. Our experts are proficient in creating utility, governance, and security tokens on popular blockchain networks. To top it off, we also adhere to the industry regulations. So, do not wait anymore and explore the opportunities that tokenization has for the health industry.