Is There a Place for Crypto in Healthcare?

Cryptocurrency has become ubiquitous in many industries, but it remains notably absent in the healthcare field.

Its volatility, tax regulations, and lack of consumer demand are huge barriers to its adoption in the healthcare setting, making it a poor choice — at least for now — when compared to paying with credit cards. 

Cryptocurrency Versus Blockchain

Many people use the terms “crypto” and “blockchain” interchangeably, but they’re not quite the same thing.

Blockchain is a form of technology that keeps data secure, while cryptocurrency is a type of online payment system that uses blockchain technology for each transaction. 

Blockchain itself looks promising for the healthcare industry. It creates a historical, linear record of transactions that no one can erase or edit without deleting the entire chain.

Because the technology makes it hard for hackers to tamper with data, it could offer a more secure way of storing patients’ medical charts, payment records, and other personal information. 

All cryptocurrency is based on blockchain. It’s a form of digital currency that doesn’t rely on a central authority for maintenance, meaning no banks or governments uphold it.

As a decentralized system, the database of cryptocurrency transactions is public. Crypto functions more like an investment than a legal tender. 

Why Health Care Doesn’t Use Crypto

If cryptocurrency is based on such a secure technology, why do hospitals stick to credit cards?

Low Demand for Accepting Crypto

Currently, only 426 health professionals in the world have a cryptocurrency ATM or accept crypto as a form of in-house payment. That’s partly because so few people use it. 

This situation is a type of positive feedback loop where, because so few people use cryptocurrency, businesses are less likely to offer it as a form of payment.

With few businesses offering it as a payment option, people are less incentivized to use cryptocurrency, exacerbating the issue. 

A 2022 Pew Research Report found that only 16% of Americans had invested in cryptocurrency, and nearly half of them reported the investment did worse than they expected.

Some countries outlawed cryptocurrency use altogether. China, Qatar, and Saudi Arabia impose absolute bans, while several African nations strictly prohibit its use for specific transactions.

It’s simply easier — and less of a legal issue in many places — to only accept cash, checks, or online bank transfers. 

Complicated Taxes

Cryptocurrency technically isn’t legal tender in the United States. From a tax perspective, the U.S. government treats cryptocurrency more like real estate or gold than it does money. 

If you buy or sell crypto, you have to report it to the Internal Revenue Service. Healthcare providers would have to follow this same rule. 

It would be more difficult for the accounting department to keep track of numerous crypto transactions — and conversions to government-issued money — than it is to use credit cards and cash.

Up to 80% of healthcare billing already contains errors, so making the billing department more complicated would likely lead to even more errors and lower patient satisfaction. 

Changing Values

The value of cryptocurrency is constantly in flux. Its exchange rates with other types of currencies can vary minute by minute.

For example, Bitcoin’s value in September 2020 was $10,837, but it was worth $61,837 in October 2021.

That might be great for investing, but it makes it very hard for a hospital to bill people. 

Imagine a hospital that charges people in Bitcoin. You might owe the Bitcoin equivalent of $10,000 on the day of your surgery. However, if you wait a few weeks and the value of Bitcoin plummets, now, you might only owe $10.

Or, vice versa — maybe the hospital sent you a very reasonable bill, but the next day the value of Bitcoin increased. Suddenly, you’re saddled with a six-figure bill for a routine visit. 

Therefore, it’s easiest to price services in dollars. But even setting prices in dollars and allowing people to pay the Bitcoin equivalent circles back to the original problem. 

For example, a hospital might send someone a $10,000 bill. The patient pays $10,000 worth of Bitcoin.

The hospital accepts the Bitcoin and tries to exchange it for dollars the next day but discovers that the value of Bitcoin has been halved in the meantime.

Now, the hospital can only receive $5,000 even though the patient paid in full. 

Constantly switching between currencies — one of which fluctuates constantly — is a logistical challenge. 

Will Crypto Find a Place in Health Care?

Unless the nature of crypto or health care changes drastically, it’s unlikely that a volatile currency mainly used as an investment will ever take off in the health care setting.

Doing so would be the equivalent of bartering goods or property in exchange for treatment.

Overall, online bill payment works well, and hospitals and clinics will presumably keep using this system for the foreseeable future.