Optimizing health system supply chain performance

When the COVID-19 pandemic began, many health systems, despite their efforts to quickly adapt, soon began running out of essential supplies such as gloves, gowns, and N95 masks. This shortage—combined with unpredictable patient volumes and, more recently, rising inflation—has highlighted the importance of a well-performing, strategic supply chain.

Taking the pandemic into account, health system executives’ views of the supply chain function have evolved. In a McKinsey survey of US health system executives and supply chain executives, about two-thirds of respondents indicated that the pandemic has improved their perception of the supply chain function’s impact within their health system. 1 McKinsey conducted an online survey on health system supply chain excellence in December 2021 with 121 hospital executives. Respondents were screened to include only those who were an active full-time CFO, COO, chief medical officer (CMO), or VP or director of the supply chain function for hospitals with more than 200 beds. In the words of one executive, “supply chain is now viewed as less transactional and more strategic; we recognize just how essential it is to the day-to-day functioning of the health system.” Notwithstanding, nearly three-quarters of survey respondents say that the supply chain stands to assume an even more strategic role.

In light of continued financial challenges wrought by the pandemic, the incomplete return of patient volumes, and a potential economic slowdown—among other stressors—health systems are pursuing opportunities to improve fiscal responsibility and drive bottom-line savings. Because the supply chain function oversees most of a health system’s external spend, 2 This number consists of non-labor spend, including supplies, pharmaceuticals, and medical and nonmedical services purchased from outside vendors (for example, utilities). which accounts for up to 40 percent of total costs, it is a clear choice for investment aimed at optimizing performance. In our experience, a high-performing supply chain function can boost resilience, enhance care, increase satisfaction among physicians, reduce supply spend by up to 10 percent, and better position health systems to achieve their growth ambitions.

Targeted actions support supply chain improvement

As survey respondents determined the elements they viewed as critical to a high-performing supply chain function, three themes emerged: clinical engagement, goal setting, and data and analytics (Exhibit 1).

Create a clinician-directed supply chain function

Our survey found that respondents who reported that their supply chain organizations performed well consistently identified strong engagement with executives and frontline clinicians during and between contracting cycles as imperative. In high-performing organizations, clinicians play an integral role in supply chain initiatives: They provide input on supplier selection and contracting strategies, including their financial impact; they support compliance with contract terms (for example, by committing to give a supplier a negotiated share of business); they manage the use of supplies; and they otherwise contribute to achieving financial, quality, or other goals.

In the same survey, health system executives identified that a lack of clinician engagement in supply decisions and an unwillingness to adjust supply preferences are the biggest barriers to better supply chain performance. Typical shortfalls include the following:

  • engaging clinicians informally rather than convening a formal committee with clear roles and responsibilities and thoughtful representation across facilities and specialties
  • accepting decisions made by clinicians without question rather than collaborating as partners—including engaging in productive debate—to identify and pursue best practices
  • taking an initiative-based approach focused only on contracting rather than a holistic category-based approach inclusive of the full set of contracting and utilization opportunities
  • underinvesting in personnel on the ground in hospitals who can develop relationships to support implementation of performance improvements, identify new savings opportunities, and provide a formal feedback loop to the supply chain function

Our experience suggests that health systems should explore three specific actions to materially improve clinical engagement:

Ensure sponsorship from senior clinical leaders. Engage the chief medical officer (CMO), chief clinical officer (CCO), chief nursing officer, and service line chairs as visible and active sponsors of clinical supply chain efforts. Leaders can accelerate progress and enable best-in-class performance by offering clinical guidance, building clinician confidence in supply chain efforts, making tough decisions, and holding other clinicians accountable for changes in behavior.

Formalize cross-functional, specialty-focused teams to evaluate strategies for each category. Formal committees comprising clinicians and supply chain leaders should be responsible for all contracting and utilization initiatives. Optimally, one accountable and influential physician—for example, a service line chair or high-volume surgeon—will chair each committee. The absence of such leadership can result in extended delays, fewer savings, or stalled initiatives. Although many health systems have a clinical engagement structure, they may lack critical elements, including clear decision rights, accountable physician champions, sufficient representation from across the system, and engagement throughout the full life cycle of the supply initiative (from opportunity indentification and sourcing to implementation and compliance).

Invest in an on-the-ground supply chain team. Supply chain initiatives cannot be driven solely from corporate or market headquarters. It is often most effective to have in-person discussions between supply chain colleagues and clinicians about product choices, procedure costs, and compliance with contracts. Supply organizations may consider filling this role with supply chain professionals who have clinical backgrounds and a threefold mission: support supply chain initiative implementation, identify local opportunities for improvement, and develop relationships with physician and facility leadership to better understand and meet their needs over time.

Almost all major health system supply chains have a yearly savings target to improve efficiency; however, this target is rarely set with input from other functional and clinical areas.

Jointly set goals across facilities and functions

Almost all major health system supply chains have a yearly savings target to improve efficiency; however, this target is rarely set with input from other functional and clinical areas. This lack of goal sharing can lead to misaligned incentives between the supply chain function and other stakeholders, siloed decision making, resistance to supply chain initiatives, and the perception that the supply chain function is focused solely on cost savings rather than broader organizational goals. Health system executives may consider three actions to help improve alignment, foster collaboration, and promote a culture of fiscal responsibility:

Institute joint savings targets. Shared savings targets between the supply chain function and its partners—specific functions, service lines, and facilities—help ensure that the organization is unified in its mission to find and implement savings opportunities. Such targets also reinforce the notion that all stakeholders are accountable for doing so. Based on our experience, savings targets can be effectively shared by supply chain, the CMO or CCO, service-line leaders, and regional or facility operations leaders.

Provide incentives for reaching targets. Supply chain initiatives may require meaningful changes in behavior by some clinicians, including shifting away from their suppliers of choice to clinically similar suppliers used by their peers. To assist this change, systems may consider providing incentives for reaching targets. These incentives can be financial or nonfinancial and may include a commitment to reinvest a percentage of savings in things prioritized by physicians, such as equipment, conference attendance, or publications.

Ensure frequent and transparent reporting. In our experience, once targets are established, tracking performance and ensuring that stakeholders have access to up-to-date information on their progress is critical to fostering a sense of accountability. Ensure that dashboards display the high-level metrics that matter most (for example, savings and contract compliance for medical implants). Then, provide additional details—down to the facility, surgeon, or supply level—to inform the actions leaders can take.

Invest in accurate, actionable data and analytics

Analytics is the backbone of supply chain excellence, yet it remains a critical gap for many health systems. Although a quarter of health system executives and supply chain leaders selected data and analytics capabilities as their number-one investment opportunity (Exhibit 2), organizations outside the hospital’s walls—such as those that supply medical devices, pharmaceuticals, and services—often have better visibility into a health system’s spending and utilization than the system itself does. As a result, the health system may be unable to effectively negotiate or identify savings. One health system COO noted that his organization “still operate[s] primarily on spreadsheets” and that it has “not been transparent at all about costs or the benefits to clinicians or the system overall of various supply chain initiatives.” Based on our experience, this story is all too common.

We recommend exploring four areas for potential investment:

Data cleaning, categorization, and integration. Having clean, categorized supplies data enables proactive identification of opportunities through granular product comparisons. This is especially important for systems that have gone through M&A activity because systems and data nomenclature must be reconciled across the system before savings opportunities can be identified. Furthermore, categorizations provided by third parties may lack important inputs (for example, pricing modifications such as constructs and rebates) that are needed to identify specific savings opportunities.

For example, many health systems have categorization structures that are two or three levels deep. Leaders may be able to see data about knee implants or tibial inserts, but they would benefit from also seeing how a knee joint implant has other medically relevant characteristics, such as the use of ceramic rather than metal materials for some components. These additional data could be helpful for identifying clinically similar products from other suppliers. Going beyond purchasing data to also include physician-level utilization data provides yet another level of transparency into who is using each product. Supply chain and clinical leaders can use this information to identify physicians to pull into supply chain efforts, to support compliance tracking, and to better facilitate change management.

User-friendly, relevant, easily accessible tools. Analytical tools are only useful if they provide relevant insights to their users, which may require individual customization and, for convenience, accessibility on multiple devices. For example, a supplies cost-per-case tool, 3 A supplies cost-per-case tool shows the cost of all supplies (including implants and medical or surgical supplies) used in a given procedure in the operating room. For a given procedure, the average cost per case is shown for individual surgeons and at the facility and system level. Savings goals can then be set (for example, reducing each surgeon’s average cost per case to the median cost or to the 25th percentile), and physicians can use individualized dashboards to get visibility into their own supply choices and costs, alternatives used by their peers, and potential savings from updating their supplies preferences. which shows the cost of all supplies for a given operating-room procedure, should provide the relevant views for physicians so that they can see the supplies they used; the cost compared to supplies used by peers; alternative supply options; and, where possible, quality outcomes.

Dashboards embedded into daily operations. Organizations need to ensure that supply chain tools and reports are being used not only to review results but also to enable decisions. Organizations should ensure ample visibility into key supply chain metrics across all levels of the organization and ensure that conversations focus not just on what has happened but also on what actions can be taken to influence future performance. Further, where possible, analytics tools should be employed to make decisions at the point of action (for example, when buying a medication or deciding which product to use in the operating room) rather than simply reviewed afterward.

Data and analytics talent. Building a robust analytics engine requires an integrated team comprising analysts, data translators, visualization experts, and data engineers, among other roles. Recruitment that focuses on these skills, regardless of previous industry experience, can expand the talent pool and ensure that leading practices are brought into the organization, including from industries such as tech that have invested substantially in developing data and analytics as part of their core businesses.

Engagement from health system executives and clinical leaders in targeted, critical areas will be imperative to continue to improve supply chain performance.

Moving forward

The pandemic has forced health system supply chains to become more resilient and proactive, stretching their limits while elevating their strategic position in the organization. Engagement from health system executives and clinical leaders in targeted, critical areas will be imperative to continue to improve supply chain performance. Coupled with investments in analytical capabilities, health systems have an opportunity to ensure that the supplies they need for effective patient care are being provided in the most fiscally responsible way. As health systems reflect on their pandemic experiences and care needs going forward, now is the time to ensure that the supply chain function is primed to help lead the organization into the future.

Brianne Bowen is an associate partner in McKinsey’s Seattle office, Borja Carol Galceran is an associate partner in the Barcelona office, Sabriya Karim is a consultant in the Toronto office, and William Weinstein is a partner in the Chicago office.

The authors wish to thank Adrian Clark-Randall for his contributions to this article.

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Healthcare 2024: how ai and collaboration will drive supply chain transformation.

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The healthcare industry's digital transformation will have a profound impact on the supply chain in 2024. Adoption of modern technologies, such as cloud computing, will lead to increased automation and efficiency. This will result in improvements in workforce management and a more resilient supply chain, with a focus on accuracy and waste reduction.

According to a  July, 2023 Cloud Market Survey  from GHX, nearly half (45%) of hospitals and health systems have already transitioned to cloud technologies for supply chain management, and many more will do so over the next 24 months. Embracing the cloud will enable healthcare providers to expand supply chain capabilities to support the growing market for non-acute care. It will also facilitate faster, more efficient and secure information exchange with trading partners, surpassing the limitation of current systems. 

The use of modern technologies and tools also means that every digital transaction will become a valuable data point. This data will serve as a foundation for advanced analytics, providing meaningful insights and facilitating data-driven supply chain decisions.

Following are four areas where the healthcare supply chain industry will be transformed this year.

Advanced technologies will make supply chain disruptions more predictable.  The adoption of cloud-based enterprise resource planning (ERP) systems has revolutionized data management, by creating centralized and unified data repositories. This has paved the way for advances in technologies like artificial intelligence and machine learning. With access to vast data sets, these technologies are now able to power intelligent and dynamic inventory management analytics. Supply chain leaders can use them to anticipate and mitigate disruptions by identifying alternatives for backordered products.

AI adoption will continue, driving inefficiencies out of the supply chain.  The healthcare industry is being transformed by technology. With the automation of mundane administrative tasks and the utilization of AI and ML to gain access to real-time industry data and intelligent analytics, healthcare professionals can now prioritize more strategic and innovative work, such as enhancing the patient experience and improving supply chain resilience.

Process automation will expand into new areas of supply chain operations.  As healthcare supply chain leaders look to optimize limited working capital, they’re turning to process automation to streamline their operations. One area where it’s gaining traction is the implantable device supply chain.

A promising trend for the upcoming year is the collaboration between trading partners to extend automation from procurement to invoicing and payment. Currently, a significant amount of human effort is still dedicated to those tasks, but technology offers a solution. We’ll see a greater adoption of automated solutions in the coming year, particularly in invoice and payment processes for all areas of supply spend.

Human experts will remain critical to decision-making.  AI's popularity is on the rise in healthcare organizations that prioritize connectivity and implement data lakes to manage clinical, supply chain and cost data. It's important, however, to note that AI isn’t meant to replace clinical or supply chain decision-making, but rather to assist decision-makers in identifying usage patterns and potential opportunities.

Consider the analogy of baggage screening technology in airport security. While these tools are designed to alert TSA agents to potential risks and threats, the agents are responsible for interpreting and acting upon the information. They’re empowered to make critical decisions because of their expertise and experience. This same principle applies to healthcare. By utilizing AI, companies can quickly analyze large volumes of data, and discover valuable insights. Without the input of a human expert, such as a clinician or supply chain professional, the information gathered by AI would hold less value. When combined with human expertise, AI becomes a powerful tool that enhances decision-making instead of replacing it.

The healthcare supply chain has undergone years of digital transformation, but the road ahead promises more waves of change. This year, we can expect to see supply chain leaders turn toward advanced technologies such as AI and ML to drive automation into the healthcare supply chain and increase efficiency, lower costs and enhance the quality of patient care.

Kristin Motter is strategic sourcing and value analysis consultant with GHX .

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The Implementation of Risk and Business Continuity Management Systems in Healthcare Supply Chain in Times of Crisis

  • Adriana Galoutzi 4 ,
  • Panos T. Chountalas   ORCID: orcid.org/0000-0003-3538-5791 5 &
  • Giannis T. Tsoulfas   ORCID: orcid.org/0000-0003-4538-9016 6  
  • Conference paper
  • First Online: 14 February 2024

Part of the Springer Proceedings in Business and Economics book series (SPBE)

This chapter aims to highlight the importance of combining risk and business continuity standardized management systems in the supply chain. For this purpose, a case study is presented of a Greek company active in logistics and dealing with the sale and distribution of medical devices. The company has been certified according to ISO 22301 standard for business continuity and at the same time implements the ISO 31000 standard for risk management. Specifically, this chapter presents how the combined implementation of the standards mentioned above helped the company successfully handle the two most significant crises in the modern history of Greek companies (i.e., the imposition of capital controls and the COVID-19 pandemic). The findings of this chapter show that although these two crises could not have been predicted in time, the existing business continuity plan—previously developed as a result of business impact analysis and risk assessment—helped the company survive and come out more robust in the face of competition.

  • Risk management
  • Business continuity
  • Healthcare supply chain

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Galoutzi, A., Chountalas, P.T., Tsoulfas, G.T. (2024). The Implementation of Risk and Business Continuity Management Systems in Healthcare Supply Chain in Times of Crisis. In: Sakas, D.P., Nasiopoulos, D.K., Taratuhina, Y. (eds) Computational and Strategic Business Modelling. IC-BIM 2021. Springer Proceedings in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-031-41371-1_32

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Blockchain in Health Care Innovation: Literature Review and Case Study From a Business Ecosystem Perspective

Shuchih ernest chang.

1 Graduate Institute of Technology Management, National Chung Hsing University, Taichung, Taiwan

YiChian Chen

Blockchain technology is leveraging its innovative potential in various sectors and its transformation of business-related processes has drawn much attention. Topics of research interest have focused on medical and health care applications, while research implications have generally concluded in system design, literature reviews, and case studies. However, a general overview and knowledge about the impact on the health care ecosystem is limited.

This paper explores a potential paradigm shift and ecosystem evolution in health care utilizing blockchain technology.

A literature review with a case study on a pioneering initiative was conducted. With a systematic life cycle analysis, this study sheds light on the evolutionary development of blockchain in health care scenarios and its interactive relationship among stakeholders.

Four stages—birth, expansion, leadership, and self-renewal or death—in the life cycle of the business ecosystem were explored to elucidate the evolving trajectories of blockchain-based health care implementation. Focused impacts on the traditional health care industry are highlighted within each stage to further support the potential health care paradigm shift in the future.

Conclusions

This paper enriches the existing body of literature in this field by illustrating the potential of blockchain in fulfilling stakeholders’ needs and elucidating the phenomenon of coevolution within the health care ecosystem. Blockchain not only catalyzes the interactions among players but also facilitates the formation of the ecosystem life cycle. The collaborative network linked by blockchain may play a critical role on value creation, transfer, and sharing among the health care community. Future efforts may focus on empirical or case studies to validate the proposed evolution of the health care ecosystem.

Introduction

In the last decade, blockchain technology has gained growing attention from both academia and practitioners in a range of industries, including banking, insurance, trade, and medicine. Blockchain has potential in various industries, including in financial applications, supply chains [ 1 ], the insurance industry [ 2 ], and even medical health care records [ 3 - 5 ]. Through maintaining an immutable, tamper-proof, consecutive list of transactional data in a distributed network, blockchain has created several disruptions in incumbent business processes with its unique features. Having a promising capability to improve information flow, sharing, and transmission among participating nodes (ie, partners in the real system), blockchain is expected to transform legacy operations with innovative service delivery and ownership transfer [ 6 ]. Blockchain adoption and pioneer pilots in different sectors have shown its power in transforming traditional working paradigms.

Blockchain, as a kind of distributed ledger technology, enables data storage, sharing, and verification under a distributed peer-to-peer network [ 7 ]. Participating nodes (ie, entities) may cooperatively maintain the common shared ledger by contributing efforts to data verification via cryptography. Blockchain can be viewed as a consecutive list of transactions that are chronologically appended to the previous ones. Updates of any part need to be verified and then recorded on the chain. This process is achieved by participating nodes’ contributions to solving the cryptographical puzzle, which in turn increases the difficulty of malicious tampering and alterations. In this sense, all transactions are visible and immutable for all parties, thus providing audit trails and data integrity. In addition, its affiliated technology, smart contracts, can be deployed on blockchain-based platforms to activate or enforce specific desired processes. Smart contracts are computer protocols that aim to execute terms of a contract or agreements [ 8 ]. In real practice, smart contracts can be coded with computer languages to interact with one another and be triggered by events in the real world [ 9 ]. These attributes, when deployed on blockchain system, may facilitate business logic and process automation.

Recent publications, including technical reports, research articles [ 10 , 11 ], and consulting papers [ 12 ], have addressed blockchain’s potential to reshape the complex operations in the field of health care. Blockchain applications in the realm of health care may be promising; however, the compositions and interactions among major health care stakeholders, such as patients, care service providers, pharmacies, funders and insurers, medical device suppliers, and research organizations, are rather complex (see Figure 1 ). Extant research topics on how these stakeholders may achieve benefits by the use of blockchain technology have been addressed from the perspective of a single industry. Comprehensive discussions on the development and potential evolution of blockchain-based health care have been discussed less. It is noted that activities and interactions among stakeholders may have crossed a variety of industries. As Moore [ 13 ] has suggested, a careful systematic approach to business strategy needs to consider firms in the scope of a larger ecosystem rather than a member of a single industry. To better elucidate the evolution of a health care ecosystem utilizing blockchain innovation, stakeholders must address cooperative and competitive issues when attempting to deliver tangible and intangible values to meet customer needs.

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Typical health care ecosystem.

Through unique distributed schemes and immutable shared ledgers, blockchain allows better transparency, security, privacy, traceability, and trust-free environment among players [ 14 ]. This implies that blockchain connects not only individual siloed databases via decentralized governance but also the ecosystem surrounding health care stakeholders. However, this may lead to more complex supply-and-demand relationships and interactions among actors who operate their businesses in an original centralized manner. Therefore, this study attempts to shed light on driving inertia from a business ecosystem perspective rather than through a traditional supply chain vision. Moore [ 15 ] defined the business ecosystem as an economic community loosely connected by a group of interacting organizations and individuals who share common values and who coevolve with one another. Researchers also extended this argument by addressing cross-industry collaboration rather than disparate interactions among directly connected counterparties [ 16 , 17 ]. This concept provides broader visions when blockchain interplays, connects, and disintermediates the dynamic relationships among connected medical communities, service providers, and end customers.

However, there is very limited research on blockchain-based health care ecosystems in the extant literature. Previous research efforts on blockchain mainly focused on technological potential [ 18 ], individual applications [ 19 ], medical record accessibility [ 20 ], and general influence. Others discussed the proof-of-concept of system design [ 21 , 22 ], adoption attitudes [ 23 ], governance, challenges, and opportunities in future research [ 24 - 26 ]. Few extant articles in the literature have addressed dynamic relationships among medical stakeholders with an overview of the blockchain ecosystem. Therefore, this research aims to investigate how blockchain can lead to a coevolving health care ecosystem by collating overviews of potential evolutions of blockchain-enabled health care applications from recent literature from a perspective of the business ecosystem. In this study, we address two research questions:

  • Research question 1: What kind of potential effects from recent innovations and applications make use of blockchain in the health care industry?
  • Research question 2: How do health care stakeholders participate, interact, and evolve in the blockchain-based ecosystem and how do they collaboratively contribute to a potential paradigm shift?

To shed light on blockchain’s influence on value creation and capture of medical stakeholders, we examine and address these research questions from a perspective of the business ecosystem, with an aim to contribute to the body of knowledge in health care.

Existing Service Process and Blockchain Roles

Traditionally, medical information is located at disconnected databases in clinics, labs, or medical institutions. Aggregating health data from disparate sources and gaining a holistic view of patient treatment history have been difficult and costly. As blockchain can store transaction logs among participants, better transparency and completeness of treatment history could be achieved. Blockchain may drive the digital transformation of legacy information sharing [ 27 ]. Traditional paper-based processes and manual processing could be reduced and better interoperability among disconnected health systems is feasible. In addition, traditional medical supply chains have suffered from poor traceability and invisible provenance. Blockchain may provide solutions to improve transparency and real-time monitoring from manufacturing to delivery. Other focused areas also include secure identity management [ 28 ], audit and governance, and facilitation for medical research (see Figure 2 ).

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Blockchain’s role in improving the health care service system. AR: augmented reality; EHR: electronic health record; EMR: electronic medical record; IoT: internet of things.

Literature Review

To answer research question 1, we conducted a literature survey to find the current state and potential of blockchain applications in the health care field. Other than using a systematic approach, we focused on specific applications that may be enabled by blockchain to transform the interaction and manipulation of a health care ecosystem. Some review articles in the recently published literature were also selected to help understand the potential evolution among health care stakeholders.

Figure 3 illustrates the search and review process of the focused literature. We searched for blockchain studies in medical and health care fields and conducted subsequent article screening and identification; abstract and text reviewing were conducted to select focused literature. The numbers in the flowchart boxes in Figure 3 denote articles that were available after the respective procedural steps. From the ecosystem perspective, the literature selection and extraction criteria paid attention to the capabilities that relevant studies highlight and that elucidate essential ingredients for constructing blockchain-based ecosystem partnerships. Some review articles were added to give a general overview of blockchain-based health care studies. Sampled articles were extracted from the filtered corpus to highlight focused topics, such as data management, information sharing, access control, security, and privacy.

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The procedural framework for the focused literature review. MEDLINE: Medical Literature Analysis and Retrieval System Online.

In this study, recent blockchain-based health care projects were examined to shed light on the disruption to health care practice. The case study, a qualitative method, refers to a systematic analysis of a specific target from a wide perspective and enables comprehension throughout the exploration process [ 29 ]. Applying this approach, researchers suggested that consideration of research objectives, contexts, and representativeness needs to be stressed [ 30 , 31 ], followed by inclusion of selection protocols suggested by previous literature articles, secondary resources from news archives, consulting reports, company websites, and academic articles [ 32 ]. Case study results were then collated to answer research question 2 and to elucidate the understanding of cooperative and competitive strategies and operational business schemes in the health care context. We selected the IBM blockchain–health care initiative [ 33 ] as the body of the target case and combined the concept of the business ecosystem with the health care context to analyze the interactions, cooperative or competitive, among species (ie, ecosystem members). Furthermore, major players’ roles and influences in the blockchain-based health care ecosystem were analyzed to give research implications.

Business Ecosystem Perspective

This study analyzed the potential evolutionary path of blockchain-based health care innovation from a business ecosystem perspective. Moore [ 13 ] proposed the life cycle of a business ecosystem and divided it into four stages: birth, expansion, leadership, and self-renewal or death. We identified four major development stages within which health care stakeholders interact with each other and evolve chronologically with their roles and cooperative and competitive challenges. Iansiti and Levien [ 34 , 35 ] extended Moore’s concepts by defining the roles of actors and argued that these roles were formed by large, loosely connected networks of entities. They further classified three categories of the actors’ roles as keystone, dominator, and niche player. The business ecosystem is comprised of diverse participants across various industries. The overall health of the ecosystem depends on the positive interactions and operations among stakeholders.

Birth: Pioneering

During this stage, entrepreneurs focus on the value creation or proposition that meets customers’ needs. The product or service needs to be presented in its best form to draw potential customers’ attention and effectively deliver its value. Leaders in the ecosystem aggregate suitable suppliers to take part in the environment and attempt to incorporate business partners’ capabilities to optimize the value package to customers.

The ecosystem grows and expands its territories. The business ecosystem faces competition to increase market share against its rivals. Firms may devote a large number of endeavors to marketing activities for increasing sales. Meanwhile, to improve overall performance, issues regarding large-scale adoption and distribution are stressed. In this stage, while incomplete ecosystems are likely to be expelled from competition, superior ones may integrate community members to complete sound supply chains, thus achieving ecosystem stability. Required conditions in the expansion stage include value-oriented business concepts and the corresponding potential to broaden scalability.

Leadership: Authority

Following the expansion, the leader or integrator needs to guide the direction of investment and technology standards. As innovation is a crucial factor for evolving ecosystems, stakeholders may find their positions and revenue models through the leader’s guidance. While the bargaining power of suppliers increases during this stage, the system integrator needs to enhance the supply chain management with alternative options to assure the stability of production and distribution. How firms constantly create values to maintain their importance in the ecosystem is critical to the overall health and continued improvement of the ecosystem.

Self-Renewal or Death

This stage occurs when firms face external threats, for example, changes in regulations or the rise of new ecosystems and innovations such as emerging technologies. Original business communities may undergo different levels of change and fluctuation. The altered environment may challenge the survival of original members. How leaders detect the potential changes and new incoming elements and threats, thereby correspondingly reacting to these alterations, may decide the future outcome of the ecosystem. When facing obsolescence, either self-renewal by incorporating new innovative ideas or stepping toward death depends on the capabilities to enable system transformations.

Reviewed Literature

The pursuit of building a sustainable and healthy ecosystem is essential for participating stakeholders. When the requirements for building a health care ecosystem are considered, we found issues that are being addressed by extant research studies. We selected a number of articles to elucidate the recent research foci. Table 1 summarizes several related articles regarding blockchain in health care; these articles were published in academically rigorous peer-reviewed scientific journals. Focused topics in the blockchain–health care ecosystem are briefly collated in the following sections.

Overview of blockchain-based health care applications in the research literature.

Decentralized Storage and Medical Data Management

Centralization of health data from disparate sources has long been a major pain point for further medical usage. Generally, disconnected data sources could be utilized to increase the integration and aggregation of medical data. Based on the distributed nature of blockchain, researchers have stressed that there are data storage and management issues in clinical trials [ 22 ], insurance [ 2 ], and personal health scenarios [ 36 ].

Information Sharing and Identity Management

Based on the immutable and distributed features of blockchain, a common shared ledger may facilitate health information exchange (HIE). Some proof-of-concept studies have covered the potential and major contributions to these topics; for example, Ali et al [ 37 ] focused on remote health monitoring, Hau et al [ 23 ] surveyed stakeholders’ attitudes, and Esmaeilzadeh and Mirzaei [ 18 ] conducted an experimental study to understand patients’ perceptions of various exchange mechanisms. In addition, while several researchers conducted literature reviews to shed light on potential strengths and limitations of blockchain applications [ 38 , 39 ], others reviewed potential identity management solutions [ 28 ] and developed evaluation frameworks for assessing performance of blockchain initiatives [ 40 ].

Access Control, Security, and Privacy

As access control and authentication are major security requirements for managing health care and medical data, researchers have proposed some blockchain-based prototypes to provide solutions to current health systems [ 41 , 42 ]. Digitization of electronic medical records (EMRs) may introduce cyberattack risks on data security and privacy when stakeholders, such as providers, payers, and researchers, attempt to interact with patient data. Blockchain-enabled solutions may maintain patient-sensitive data through a friendly approach [ 43 - 45 ].

Case Study of the IBM Blockchain–Health Care Initiative

On January 24, 2019, IBM announced its collaborative blockchain initiative with major health care players, including Aetna (acquired by pharmacy and health plan provider CVS Health), Anthem (health plan provider), Health Care Service Corporation (the largest customer-owned health insurance provider in the United States), and PNC Bank [ 46 ]. IBM has been searching for new opportunities by leveraging the potential of blockchain and attempting to build up a special networked health care ecosystem. In the last few months, health organizations, health care providers, start-ups, and technology companies joined in this initiative to grow the Health Utility Network, of which Cigna and Sentara Healthcare are participants. The aim is to drive digital transformation by providing better transparency and interoperability. Participants may reap benefits from building, sharing, and deploying solutions to incumbent challenges in the health care context. Major issues and potential blockchain use cases are enumerated as follows:

  • Provenance and traceability of pharmaceutical supply chain: fake and counterfeit drugs could be troublesome and dangerous issues as drug provenance is difficult to track in a cross-border setting. A large number of handovers from manufacturers, shippers, distributors, retailers, and pharmacies may cause inaccuracies and disputes in medical delivery operations. Counterfeit drugs with improper ingredients and dosages may jeopardize the health of patients and even cause legal disputes among manufacturers, suppliers, and customers. With immutable, tamper-proof, and trackable characteristics, blockchain may provide solutions to authenticity and traceability of transferred assets along with auditable and secure transaction records among stakeholders. For example, in a private drug blockchain, drug registration by pharmaceutical companies may grant a higher level of trustworthiness and authentic proof. Also, these companies, acting as dominators, could assign the roles of the actors; some of them may have the rights for registration while others may conduct verification of transactions. The provenance of drugs can be assured via verification processes with related manufacturing or identity information when appended on-chain, making it easy to be tracked.
  • Data management during clinical trials: when clinical trials are implemented, numerous data are produced by different devices via the operation of medical staff. How these data are stored, transmitted, shared, and utilized for medical therapy or operations is critical to existing manual systems. Errors and fraud during clinical trials operations could be generated via malicious alterations or unintentional mistakes. Typical flaws could occur when trial procedures are inaccurately designed by biased intentions from actors or inconsistent records and responses from patients’ evolutionary medical reports. Blockchain in this case could provide proof-of-existence for any form of documentation. The information needs to be verified via the consent of the participating nodes and not under a single entity’s control. Modifying or changing information would be cryptographically difficult to conduct among a majority of network players, thus making documentation highly trusted.
  • EMR and electronic health record (EHR) management: where patient or medical records are concerned, a challenge is that individual medical data are not easily accessed by different medical institutions or clinics. While the medical information is stored disparately in various databases or systems, it is difficult to deliver proper medication and care service in a personalized context. Sensitive data can also hinder the transmission efficiency among medical organizations. How to access, share, and utilize a holistic medical treatment history in a secure way remains a challenging issue in centralized EMR systems. However, with the help of distributed ledger technology, blockchain may have potential regarding the manipulation and access control of such EHR and EMR systems. Blockchain platforms can be combined with existing EHR and EMR systems, either in the cloud computing environment or otherwise, through the use of Oracle and data gateways. Patients can share their medical records, with or without permission, to registered users or stakeholders on a medical blockchain. Patients may decide the level of information disclosure through smart contract settings to specific users, thus receiving rewards from the blockchain system, accordingly. As described above, blockchain could facilitate the sharing and management of EHRs and EMRs among supply and demand entities. Related data analysis and rewards from sharing could potentially promote the participation of the medical community and, consequently, leverage a network effect.

In health care, major inefficiencies can arise from clinical operations, administrative processing, and frictions among disparate systems. These pain points have decreased the overall performance and have led to poor customer experiences in regard to incumbent medical and health care systems and services. The act of incorporating major players through blockchain-based systems and services in health care may help to develop a healthy, open-networked, and collaborative ecosystem. The blockchain-enabled collaboration aims to address the aforementioned challenges by pursuing reduced administrative error, mitigated system frictions, streamlined claims and payment transactions, and efficient information exchange. Iansiti and Levien expanded Moore’s ecosystem view and proposed the strategies that firms might adopt to position themselves in the business ecosystem. The strategic roles include keystone, niche player, and physical dominator. The keystone in the business ecosystem provides a platform to which niche players add value and build offerings. Niche players account for the bulk proportion of the ecosystem and are responsible for value creation and innovation. The physical dominator directly controls the majority of a network via horizontal or vertical integration. In an IBM blockchain ecosystem, the major players’ roles and corresponding functions are shown in Table 2 and are summarized as follows:

Major players’ roles and influences in a blockchain-based health care ecosystem.

  • IBM: keystone—blockchain platform provider and coordinator.
  • Aetna of CVS: niche player—improves data accuracy and optimization of health care system operation.
  • Anthem: niche player—medical information exchange.
  • Health Care Service Corporation: physical dominator—reduces information fragmentation and improves claims procedures and health care system connection.
  • PNC Bank: niche player—facilitates payment transactions and supports medical finance.

Embracing of blockchain technology is not the privilege of this initiative only. Competitors making similar efforts, such as Change Healthcare, Hashed Health, Guardtime, Gem, and SimplyVital Health, have also teamed up to launch a blockchain pilot—Intelligent Healthcare Network with Blockchain Processes—in the realm of health care. Other competing projects with a more-or-less different focus have also led to consortia competition. Prominent examples include Synaptic Health Alliance, targeting provider directories and data reconciliation, and ProCredEx, focusing on storage and sharing of medical credentials. PNC Bank, acting as a partner of interdisciplinary alliance, stands in a public position and contributes its edge to facilitate transactions among patients, payers, and providers in both domestic and cross-border contexts.

Business Ecosystem With Evolutionary Life Cycle

Blockchain, as an emerging technological innovation, has provided opportunities for incumbent health care stakeholders. As for the IBM case, a collaboration of health care partners has resulted in a new ecosystem. Its potential evolutionary stages have formed a business ecosystem lens; these stages are summarized in Table 3 .

The evolutionary path of a blockchain–health care ecosystem: the IBM case.

At the birth stage, the IBM blockchain–health care pilot faces consortia competitions from other allies. Even though the focused markets might be slightly different from pilot to pilot, similar efforts and common objectives for driving digital transformation in the health care industry are the same. IBM, as a recognized leading enterprise blockchain provider, possesses an advantageous edge against competitors. When entering into the expansion stage, the key focus is to bring new innovations to market to increase the market share. This could be carried out by optimizing platform functionality, absorbing complementary health care members, and addressing the changing demands for customers. In addition, to outperform rival ecosystems, it is essential to build up technical or industrial standards in terms of competitive strategy [ 47 ]. During the leadership stage, the leading ecosystem may focus on future prospects for followers. This could be implemented by compelling suppliers and customers to complete sound visions; for example, integration with other disruptive technologies, such as machine learning, artificial intelligence, mobile and ubiquitous health, wearables, and internet of things (IoT). Inversely, to prevent pressure from increased bargaining power, actions such as using backward integration, searching multiple suppliers, increasing profile, and conducting market education are needed. At the last stage, the blockchain–health care ecosystem may step toward self-renewal or death . This may depend highly on capabilities that the existing ecosystem may possess; it can either innovate or be replaced with alternative ecosystems or paradigms.

Comparative Analysis of the Existing System and the Future Ecosystem

Blockchain applications in the health sector have been receiving increased attention and prospects. We have summarized the current health care service pain points and highlighted the potential of blockchain in reshaping traditional practice and operations. Researchers have conducted literature reviews to report on the current challenges [ 48 , 49 ]. The major issues with the corresponding potential effects of blockchain are listed in Table 4 .

Health care service pain points and the potential effects of blockchain in the health care ecosystem.

Blockchain Impacts and the Changing Paradigm on the Health Care Ecosystem

This study collated blockchain-related literature in the health care industry. While many research efforts highlighted the potential effects of blockchain from a viewpoint of a single firm or industry, we attempted to shed light on its power from a more holistic manner, which focuses on the inclusive health care ecosystem. This changing and evolving paradigm may go through complicated cooperative and competitive challenges with the participating stakeholders. Therefore, from the illustrative case—the IBM blockchain–health care initiative—we elucidated and discussed the potential impacts and complex interactions during the lifecycle of component species or players. Five critical issues, when coevolving with blockchain adoption, are discussed to provide implications for researchers and practitioners.

Health Information Exchange With Interoperability and Integrity

HIE has long been a critical issue when data interoperability is considered; only with an effective information exchange scheme could the true value of health care information be unleashed [ 50 ]. Recently, a proliferation of publications and pilots have addressed the issue of medical records and health records. A decentralized scheme using a commonly shared ledger for information sharing offers innovators opportunities to disrupt traditional practice [ 51 ]. Health care data has granted blockchain-enabled applications great penetration points into the health care industry. Blockchain-enabled health care information exchange may unleash the power of blockchain to reduce frictions among siloed databases as well the costs from intermediaries [ 12 ]. To facilitate information exchange among disparate data systems across individual organizations, the transmission protocols or standards need to be addressed to provide data integrity. In so doing, an important part is the integration of transmission protocols, which mitigates effects of potential missing information and avoids incompatible situations. In addition, blockchain’s distributed framework may support cross-system health information usage. However, due to current technological limitations in designing blockchain applications, limited block size could become an issue for extended scalability. Therefore, only critical transactions will be appended on-chain and supporting data access schemes will be necessary for data manipulation. While blockchain could allow interoperability among health systems, incentives for individual stakeholders may become essential when creating beneficial models and supporting sustainable ecosystems are considered. In this regard, blockchain may unlock the true value of interoperability and achieve a higher level of disintermediation.

Digital Identity Management

Traditional identity management has been subject to the limitations of a centralized mechanism, such as security, privacy, and scalability. Centralized identity management is vulnerable to malicious attacks and alterations, thus being prone to theft, counterfeit, and fraud risks [ 28 ]. In addition, credentials required to request registration or access to health care services are also prone to misuse or to causing privacy disclosure. Distributed identity management may provide solutions to these limitations with its capabilities of ensuring data integrity and information sharing across different health care systems if deployed on an immutable and distributed network. The distributed model may also solve the duplicate and multi-version identity issues in health care use cases. Due to these features, identity owners may have full control of their unique digital identities and, in turn, enjoy benefits as the stakeholders in a valuable health care ecosystem. This implies that users have become the owners of their health data without the intermediation supported by traditional identity management systems. A higher degree of freedom to access, release, or share medical records has become possible. The blockchain-enabled digital identity is also useful for managing health care supply chain activities, such as the ownership transfer of specific assets. After all, as health care data are normally sensitive and confidential in nature, blockchain identity may leverage its characteristics to grant better security and privacy by reducing manual intervention and operational failures.

Health Care Supply Chain Management

Blockchain’s immutable and tamper-proof attributes have granted disruptive innovation to supply chain management. In a health care ecosystem, records of goods, such as drugs, and service flows could be recorded on-chain to provide better logistics visibility and timeliness. The integration of blockchain and medical IoT devices may be the next evolution of blockchain technology in the realm of supply chain management. A large amount of medical data generated by medical devices may be stored across different stakeholder systems. With the aid of blockchain, patient-generated data can be stored off-chain but accessed with permissions preset by blockchain-based smart contracts. In this regard, HIE can become more streamlined without intermediation. Another blockchain use case is for the drug or pharmaceutical supply chain. Typical pain points may occur during handovers across stakeholders. Blockchain provides better transparency on supply chain activities and players may have better control over product and service flows. Moreover, primary concerns also come from the provenance of drug supply. Serious fake and counterfeit drugs have prevailed due to poor authentication and traceability from manufacturing and shipping to delivery. The movement of drugs could be recorded on blockchain to provide better real-time monitoring as well as to cease the distribution of fake drugs. This implies that trackable footprints verified by participating players can help secure drug supply chains.

Medical Research and Data Exploitation

Medical records have long been managed with a centralized approach. However, the disconnected health systems that exist across different clinics or health organizations may hinder further usage of EHRs and EMRs for medical researchers [ 51 ]. A considerable number of medical records are stored in paper-based documents or in electronic health systems with poor interoperability. Poor efficiency in health care information exchange and rising costs of administrative processing have locked the true value of medical information. In traditional circumstances, researchers may have difficulties in acquiring patient data and medical records. This phenomenon may result from where and how questions. To address data sharing and exploitation among parties and research institutes, researchers have proposed a privacy-preserving model [ 52 , 53 ] and an incentive mechanism [ 54 ] during the course of data collection, sharing, and collaborative exploitation. With a shared health care ledger system, researchers may reap benefits from the blockchain-changing paradigm. They may access related data by checking smart contract conditions if the use is permitted by patients. Patients could get rewards or credits from the contributions or payments from researchers by granting different levels of permission, which are coded and stored by smart contracts on blockchain, to release specific data. In sum, blockchain may give control of data access to patients, and researchers could pay for access. In this regard, the traditional pain points for collecting patient data could be resolved in order to facilitate research conduct. Data reconciliation during research design and clinical trials may become easier with a shared medical ledger, thus improving health care and medical treatment.

Automation of Financial Transactions and Insurance Procedures

A lack of trust between health care stakeholders may affect the overall performance of financial transactions in the health care industry, for example, impedance in promoting alternative payment models between payers and providers. When the current reimbursement models and claim procedures were examined, we found hindrances on processing efficiency, transparency, and visibility among ecosystem members. For example, in current insurance fields, multiple middlemen and intermediaries exist throughout the procedures of health insurance policies. In addition, shared information could help insurers seek out better providers and provide verification on the fact if providers meet obligations and contractual terms. Smart contracts may replace efforts on drafting complex and value-based paper contracts and may automate the process of execution of terms or agreements. Through the aid of smart contracts, entities may set up logical process flows when preset conditions regarding health care activities are met. The deployment of smart contracts on decentralized immutable ledger systems could also make payment and claims records visible and render postaudit and review. In this sense, the paramount manipulation on data exchanges and payment transfer between insurers and their stakeholders could become easier and less expensive.

Limitations

In this study, we conducted a literature review to investigate the potential impacts of blockchain-based health care innovations. Along with selected pilot cases, we discussed the positions and promises that blockchain may bring to the health care ecosystem. While researchers and practitioners have high hopes, challenges will be faced before the large-scale adoption of blockchain due to limitations from technical health care service operations and regulatory concerns. Confined by the level of blockchain maturity in various health care subsectors, different use cases and clinical trials need more support from empirical work to report on its real performance. We collated extant research efforts and attempted to shed light on a potential paradigm shift in the future health care ecosystem. Such an endeavor may be subject to uncertainties from the changing environment, technology limitations, or emerging innovations.

This study aims to answer questions on the evolution and development of blockchain technology in health care research and on how stakeholders coevolve in this environment. From the perspective of the business ecosystem, we identified research articles about blockchain-enabled health care and we covered prototype designs and leading pilot cases in recent years. The evolutionary trajectory and interactions among major health care stakeholders may potentially formulate the blockchain-based health care ecosystem. Key players have presented their roles and interacted with one another to go through the life cycle of the business ecosystem. We illustrated their potential and the phenomenon of coevolution within the health care ecosystem. It is noted that while the literature in this field has proliferated recently, mostly regarding proof-of-concept studies, framework propositions, and trial pilots, a careful consideration on embracing such technology still needs to address technical limitations, privacy, mindset, and legal concerns. Our perspective and analysis show that large-scale adoption would need long-term support from health care stakeholders. Future research may devote more efforts to building up evaluation models to provide practical implications for practitioners. Whether feasible business models may sustainably survive in such an ecosystem needs attention from scholars. With a better understanding of how stakeholders coevolve within the ecosystem, players may reap their benefits in a more efficient manner to propel a potential blockchain–health care paradigm shift.

Acknowledgments

This research was supported by the Ministry of Science and Technology, Taiwan, under contract numbers MOST-106-2221-E-005-053-MY3 and MOST-109-2221-E-005-043.

Abbreviations

Conflicts of Interest: None declared.

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  12. Enablers of resilience in the healthcare supply chain: A case study of

    A case study on medical supplies supply chains using MCDA and unsupervised machine learning showed redundancy, collaboration, and robustness as critical indicators for a resilient supply chain ...

  13. PDF Healthcare Supply Chains: a Case Study of Hospital- Vendor

    HEALTHCARE SUPPLY CHAINS: A CASE STUDY OF HOSPITAL-VENDOR COLLABORATIVE PRACTICES Aristides Matopoulos* *School of Engineering & Applied Science, Engineering Systems & Management Group, Aston University, Aston Triangle, Birmingham, B4 7ET, UK, Email: [email protected] Liana Michailidou

  14. Enablers of resilience in the healthcare supply chain: A case study of

    A case study on the medical supplies' supply chains is presented. A rank reversal proximity index MCDM method ranks criteria to assist with decision making. The proximity index will reduce the chances of the rank reversal phenomenon that results in incorrect rankings from occurring.

  15. Supply Chain Management in Hospital : A Case Study

    Supply Chain Management in Hospital : A Case Study Samuel Toba, M. Tomasini, B. Yang Published 2010 Business, Medicine TLDR An overview of the current issues in supply chain management that today's hospitals face as well as a look at the measures that a case health organization has taken in managing this aspect of their supply chains are provided.

  16. Healthcare 2024: How AI and Collaboration Will Drive Supply Chain

    The healthcare industry's digital transformation will have a profound impact on the supply chain in 2024. Adoption of modern technologies, such as cloud computing, will lead to increased automation and efficiency. This will result in improvements in workforce management and a more resilient supply chain, with a focus on accuracy and waste ...

  17. A review study of the blockchain-based healthcare supply chain

    A review study of the blockchain-based healthcare supply chain Technological acclimatization in today's healthcare industry is a subject of new inventions. The worldwide Covid-19 epidemic has led to increase in the use of technology for healthcare supply chain, patient data management, and claims settlement.

  18. Digitalization Initiatives of Home Care Medical Supply Chain: A Case

    In order to understand this contemporary phenomenon embedded in a local context, we have conducted an in-depth case study. Based on an enriched model of the digital supply chain developed by Queiroz et al. (2021), this article offers for the first time a deep understanding and digitalization initiatives of the home care medical supply chain.

  19. Managing healthcare supply chain through artificial intelligence (AI

    Developed supplier's CSR capabilities in a pharmaceutical supply chain: Case study: Lack of empirical validation of findings. As this study expands the literature in the healthcare supply chain, we see a growing need to understand how digitalization enables HSC and how these case studies play a role in AI technology adoption.

  20. (PDF) CASE STUDY Technology in healthcare: A case study of healthcare

    . Semi-structured Interviews and on-site observations . Key assumptions for the analysis . Comparison of hospital supply chain process: Manual versus RFID and AGV . Comparison of total...

  21. Healthcare Supply Chain Simulation with Disruption Considerations: A

    In this context, Healthcare Supply Chain Management (HSCM) is a particular case of SCM. In fact, due to the criticality of its flows, the service level among the HSC must be very high, i.e. closed ...

  22. Improving resilience of the healthcare supply chain in a pandemic

    A healthcare supply chain case study during the COVID-19 pandemic is conducted. • Supply chain resilience measures are explored using the resource dependence theory. • Bridging is more effective than buffering to improve medical supplies availability. • Complementing bridging with buffering leads to better risk management. •

  23. 1 Healthcare Supply Chains : a Case Study of Hospital-vendor

    This case study shows that specific and measurable cost reductions exist, in addition to other improvements such as better control over the inventories, and also in reduction of administrative work. The paper discusses the characteristics of healthcare supply chains, and puts particular emphasis on the implementation of VMI/CMI in this sector specific context.

  24. The Implementation of Risk and Business Continuity ...

    This chapter aims to highlight the importance of combining risk and business continuity standardized management systems in the supply chain. For this purpose, a case study is presented of a Greek company active in logistics and dealing with the sale and distribution of medical devices.

  25. Blockchain in Health Care Innovation: Literature Review and Case Study

    A literature review with a case study on a pioneering initiative was conducted. With a systematic life cycle analysis, this study sheds light on the evolutionary development of blockchain in health care scenarios and its interactive relationship among stakeholders. Results