Privacy Reckoning Comes For Healthcare
By Anonymous | March 3, 2019
The health insurance industry (“payors”), compared to other industries, is relatively late to the game in utilizing data science and advanced analytics in its core business. While actuarial science has long been at the heart of pricing and risk management in insurance, not only are actuarial methods years behind the latest advances in applied statistics and data science, but the scope of use of these advanced analytical tools has been limited largely to solely underwriting and risk management.
But times are a-changing. Many leading payors are investing in data science capabilities in applications ranging from the traditional stats-heavy domain of underwriting to a range of other enterprise functions including marketing, care management, member engagement, and beyond. With this larger foray into data science has come requisite concerns with data privacy. ProPublica and NPR teamed up last year to publish the results of an investigation into privacy concerns related to the booming industry of using aggregated personal data in healthcare applications (link); while sometimes speculative and short on details, the report brings up skin-crawling possibilities of how this can go horribly wrong. Given the sensitivity of healthcare generally and the alarming scope of data collection in process, it’s high time for the healthcare industry to take a stand on how they intend to use this data and confront privacy issues top of mind for consumers. Let’s explore a few issues in particular.
Data usage: “Can they do that?”
One issue raised in the article — which would be an issue for any person with a health insurance plan — is how personal will actually be used. There are a number of protections in place that prevent some of the more egregious imagined uses of personal data, the most important being that insurance companies cannot price-discriminate for individual plans (though insurers can charge different prices for different plan tiers in different geographies). Beyond this, however, one could imagine other uses that might raise concerns on the expectations of privacy with data, including: using personal data in group plan pricing (insurance plans fully underwritten by the payor and offered to employers with <500 employees), outreach to individuals that may alert others to personal medical information (consider the infamous Target incident where a father learned of his daughter’s then-unannounced pregnancy through pregnancy-related mailers sent by Target), and individualized pricing that takes into account data collected from social media in a world where laws governing health care pricing are in flux in our current political environment. Data usage is something that payors need to be transparent about with its consumers if payors hope to engender and maintain the already-mercurial trust of its members…and ultimately voters.
Data provenance: “Do I really subscribe to ‘Guns & Ammo’?”
It is demonstrable that payors are making significant investments in personal data, sourced from a cottage industry of providers that aggregate data using a variety of proprietary methods. Given the potential uses laid out above, consider the following: what if major decisions about the healthcare offered to consumers is based on data that is factually incorrect? Data aggregation firms sometimes resort to imputing data for people with missing data points — so that, if all my neighbors subscribe to Guns & Ammo magazine, for instance, it may assume I am also a subscriber. Notwithstanding what my specific hypothetical Guns & Ammo subscription might mean, what is the impact of erroneous data on decisions around important healthcare decisions? How do we protect consumers from being the victim of erroneous decisions based on erroneous data that is out of their control? A standard is required here in order to ensure decisions are not made based on inaccurate data.
Conclusion: Miles to go before we sleep on this issue
IMAGE SOURCES: both are examples of what a ‘personal dossier’ of an individual’s health risk might look like, including personal data. Both come from the main ProPublica article mentioned above (“Health Insurers Are Vacuuming Up Details About You – And It Could Raise Your Rates”, by Marshall Allen, July 17, 2018), found here: https://www.propublica.org/article/health-insurers-are-vacuuming-up-details-about-you-and-it-could-raise-your-rates
Both images are credited to Justin Volz, special to ProPublica