This article presents a novel hardware-assisted distributed ledger-based solution for simultaneous device and data security in smart healthcare. This article presents a novel architecture that integrates PUF, blockchain, and Tangle for Security-by-Design (SbD) of healthcare cyber–physical systems (H-CPSs). Healthcare systems around the world have undergone massive technological transformation and have seen growing adoption with the advancement of Internet-of-Medical Things (IoMT). The technological transformation of healthcare systems to telemedicine, e-health, connected health, and remote health is being made possible with the sophisticated integration of IoMT with machine learning, big data, artificial intelligence (AI), and other technologies. As healthcare systems are becoming more accessible and advanced, security and privacy have become pivotal for the smooth integration and functioning of various systems in H-CPSs. In this work, we present a novel approach that integrates PUF with IOTA Tangle and blockchain and works by storing the PUF keys of a patient’s Body Area Network (BAN) inside blockchain to access, store, and share globally. Each patient has a network of smart wearables and a gateway to obtain the physiological sensor data securely. To facilitate communication among various stakeholders in healthcare systems, IOTA Tangle’s Masked Authentication Messaging (MAM) communication protocol has been used, which securely enables patients to communicate, share, and store data on Tangle. The MAM channel works in the restricted mode in the proposed architecture, which can be accessed using the patient’s gateway PUF key. Furthermore, the successful verification of PUF enables patients to securely send and share physiological sensor data from various wearable and implantable medical devices embedded with PUF. Finally, healthcare system entities like physicians, hospital admin networks, and remote monitoring systems can securely establish communication with patients using MAM and retrieve the patient’s BAN PUF keys from the blockchain securely. Our experimental analysis shows that the proposed approach successfully integrates three security primitives, PUF, blockchain, and Tangle, providing decentralized access control and security in H-CPS with minimal energy requirements, data storage, and response time.