Changing Healthcare insurance sector with Blockchain and smart contracts

06 February 2022
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Looking back at the rich history of the healthcare industry, we can find a series of technological breakthroughs to improve patient outcomes and improve access to services. One of the most recent disruptions of Blockchain technology in the healthcare sector is the revamping of the insurance sector.

Blockchain is a disturbed ledger system that records the transactions and stores data on a ledger that is immutable and transparent. Once the block is filled with data, a new block is created and the data is stored in chronological order.

Here’s a survey of blockchain and its adoption across various industries:



Image Source: Blockchain adoption is accelerating across the globe, says Deloitte (

Blockchain technology can be implemented on a private or public network. Here are a few benefits of using Blockchain technology in your business:

1. Accessibility

2. Immutability

3. Security

4. Transparency

Blockchain in the healthcare insurance sector

Indian healthcare ecosystem

The health insurance sector in India collected health insurance premiums worth INR 516 billion in 2020. The health insurance sector in India consists of several stakeholders such as insurance companies, beneficiaries, provide hospitals, intermediaries, InsureTechs, start-ups, and the government. These stakeholders interact through a complex network of interdependent and paper/data-sensitive workflows.

The network of stakeholders is very complex and consists of the intensive workflows of data. Although many stakeholders are utilizing many innovative technologies the process is yet to become seamless. Though technology has helped India’s health insurance system and reduced the workflow burden and the entire ecosystem transformed from manual to digital.

With the help of Blockchain technology, one can enable the seamless exchange of information and improve trust between various stakeholders through a participative approach. A need for traceability and tamper-proof makes it important to set up a network that can be trusted.

Here are a few stats highlighting the future of health insurance in India:

  • Around 61 percent of pharma companies are already embracing innovative technologies like Artificial Intelligence, with Blockchain implementation in their pipeline.
  • By enabling complete visibility and transparency throughout the pharma supply chain, Blockchain helps in drug tracking and eliminating falsified medication, helping pharma companies reduce revenue loss up to $43 billion annually, according to a report by BIR Research
  • Health insurance in India is the second-largest contributing use to the Indian insurance industry.
  • The health insurance segment has witnessed an increase in its share of the gross written premium (GWP) within the general insurance industry, rising from approximately 10% in FY05 to approximately 27% in FY20.9 (ibid.).

Health Insurance Management through Smart contracts

A smart contract is an agreement that is self-enforced as a code and is managed by Blockchain technology. A smart contract is:



Image Source: Smart Contracts. One of the crowning achievements of the… | by BlockstreetHQ Team | Blockstreet HQ | Medium

Smart contracts in healthcare insurance are a boon for the industry. Traditionally insurance organizations rely on trusted intermediaries to execute the transactions. But with the involvement of a third party, the process becomes slower and expensive taking months to be processed.

The following image depicts the advantages of smart contracts:



Image source: Blockchain smart contract benefits with laptop Vector Image (

With the help of smart contracts, human interference can be reduced. Smart contracts help mitigate the risk of manipulation caused by the mediators and also increase transparency.

Smart contracts are stored on the Blockchain so that both parties can see logged transactions. An additional advantage of using smart contracts is that they speed up claim processing, reducing administrative costs for the organizations.

Fraud Detection using Blockchain

According to a report by PWC, insurance companies lose around 8.5 percent of their revenue to fraud. These frauds occur due to gaps in the insurance industry. Gaps such as:

  • Maintaining an insurance company’s database to record the blocked service increases the cost and effort for the organization.
  • Because the data is stored in silos, the information is not visible to the other organizations.
  • Data stored in a central database becomes a single point of failure.

The total cost of insurance fraud in the healthcare insurance in the United States is estimated to be more than $40B a year, according to a report by the FBI. The complexity in the modern insurance industry creates various gaps of invisibility that can be exploited to perpetrate fraud.

This also creates opportunities for the criminals to make multiple claims across different insurers for a single loss.

Image Source: Improve detection of online frauds using decentralized Identity Management - Wipro

Blockchain enables better communication and coordination between insurers to combat fraud. On the distributed ledger, insurers could record permanent transactions with granular access controls to protect data security.

Agent rating system through Blockchain technology

At the time, there is no system in the insurance industry that helps to track an agent after the fraudulent conduct. No mechanism is available to know the performance and history of the agent and to decide which agent should sell which policy.

The need of the hour is a shared database based on Blockchain technology which is immutable and shared with all the participants.

Blockchain technology can simplify the process by allowing for greater trust between the insurers and the person insured, increasing transparency in the complete process. The claim process can be started immediately with the death of the insured person, helping to lift the pressure off the deceased person’s family.

Moving forward

Digital ledgers such as Blockchain can help the insurance industry to automate its outdated processes and save billions of hours of paperwork each year. Blockchain technology in finance and insurance can als0 help to increase communication that allows for easy collaboration between patients and doctors. We are well aware of the fact that the insurance ecosystem contains millions of stakeholders. From insurers to healthcare providers to patients, some players are involved in the industry, making it easier to get bogged down by money and time-wasting inefficiency stemming from billions of forms.

Develop your next blockchain technology in healthcare with Debut Infotech.

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Debut Infotech A Top-Rated Web, Mobile, & Blockchain App Development Company

Debut Infotech is a global mobile app and digital product development company that leverages Blockchain, IoT, AI, and other cutting-edge technologies to help SMEs, startups, and global enterprises harness the incredible power of modern digital products to drive their online businesses to unwavering new heights. 

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