What are smart contracts and their benefits?

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Smart contracts are computer programs that are stored on a blockchain and that execute automatically when certain conditions are met, these contracts allow to automate the execution of an agreement between the parties, without the need of intermediaries or bureaucratic processes, which brings transparency, security and efficiency.

Smart contracts can be applied in various fields, such as finance, law, logistics or health. In this last sector, smart contracts can offer multiple benefits, such as the following:

  • Facilitate the access and exchange of medical data among patients, health professionals and insurance entities, respecting the privacy and informed consent of users.
  • Streamline the billing and payment processes between health service providers and insurance companies, reducing administrative costs and avoiding fraud or errors.
  • Improve the management of medical supplies, such as drugs or equipment, by tracking their origin, quality, expiration and distribution, ensuring their traceability and authenticity.
  • Promote research and innovation in the field of health, facilitating collaboration among the different actors involved, such as universities, research centers, pharmaceutical companies or non-governmental organizations.
  • Encourage prevention and health promotion, by creating reward or gamification programs that stimulate users to adopt healthy habits or to comply with their treatments.

However, smart contracts also present some limitations or challenges that must be taken into account, such as the following:

  • The lack of a specific legal regulation that defines the legal framework applicable to smart contracts and that resolves possible disputes or conflicts that may arise between the parties.
  • The need to have an adequate technological infrastructure that guarantees the optimal functioning of the blockchain and that avoids possible technical failures or cyberattacks that compromise the security or availability of data.
  • The difficulty of adapting smart contracts to changing or unforeseen situations that may affect the fulfillment of the agreed conditions or the satisfaction of the needs of the parties.
  • The resistance to change or the lack of trust that some actors in the health sector may have towards adopting a disruptive technology that modifies their roles or their business models.

Concluding smart contracts are a tool with great potential to improve the health sector, but they require greater technological, legal and social maturity to take full advantage of their benefits.