SummaryHealthcare is a vitally important field in the industry and evolving day by day in the aspect of technology, services, computing, and management. Its potential significance can be increased by incorporating Internet of Things (IoT) technology to make it smart in the aspect of automating activities, which is then further reformed in the healthcare domain with the help of blockchain technology. Blockchain technology provides many features to IoT‐based healthcare domain applications such as restructuring by securing traditional practices, data management, data sharing, patient remote monitoring, and drug analysis. In this study, a systematic literature review has been carried out in which a total of 52 studies were selected to conduct systematic literature review from databases PubMed, IEEE Access, and Scopus; the study includes IoT technology and blockchain integration in healthcare domain‐related application areas. This study also includes taxonomy that mentions the aspects and areas in healthcare domain incorporating the traditional system with the integration of IoT and blockchain to provide transparency, security, privacy, and immutability. This study also includes the incorporation of related sensors, platforms of blockchain, the objective focus of selected studies, and future directions by incorporating IoT and blockchain in healthcare domain. This study will help researchers who want to work with IoT and blockchain technology integration in healthcare domain.