How Blockchain Can Cut Health Care Waste and Reduce Fraud, in Foreign Affairs

“Every year, some $455 billion of the world’s health care spending is lost to fraud,” write Harvard Medical School’s John G. Meara, Salim Afshar, Alex Peters, and Brian M. Till in Foreign Affairs. However, they argue, blockchain technology—which underpins Bitcoin and other cryptocurrencies—could cut waste, reduce fraud, and bring better care to billions by “allowing donors to track money, goods, and treatment in real time.”

The authors find “there are several reasons why fraud and waste are rife in the global health sector. Donors tend to send money to ministries of health and other organizations in large tranches . . . . This creates surpluses and easy targets for graft. What’s more, supply chains in low- and middle-income countries are often weak and opaque . . . . The cost of identifying the breakdowns in supply chains often outstrips the value of the goods that are lost.”  

By creating secure digital records of transactions, blockchain has helped multinational corporations better manage supply chains, and the authors envision aid groups using “the technology to oversee medical supplies as they travel from factory to patient.

Among its benefits, “blockchain could eventually help document how, when, and where every dollar of aid is used,” “make ministries of health more efficient,” and “limit opportunities for graft and lift much of the administrative burden faced by civil servants.”

The authors conclude, “In 2016, the world’s spending on health care approached $8 trillion, or around 10 percent of global GDP. That figure should reach around $18 trillion by 2040. Translating this investment into health and prosperity will require ending fraud and transcending the barriers to accessible, equitable funding. Blockchain offers a way to start.”

The essay is now available at ForeignAffairs.com. This link bypasses the paywall on ForeignAffairs.com for one month following the release date. We encourage journalists to share with their audiences.

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