Privacy of Digital Health Information

The widespread adoption and use of digital technologies, both within and outside of healthcare, has generated massive amounts of data on individual health that is controlled by companies. The promise of these data for improving human welfare is immense but unfettered corporate access to health information imperils personal privacy. This conflict raises fundamental questions about whether and how societies can harness the value of healthcare digitization, including big data applications and artificial intelligence, while still preserving privacy. This chapter surveys the economic and policy landscape on health data privacy in the rapidly evolving digital age. It first identifies the potential tradeoffs inherent in health privacy regulation, by examining the range of individual and social costs and benefits associated with increasing or decreasing the flow of individual health information. It then presents theoretical economic arguments for different regulatory approaches to protecting health privacy and draws insights from the empirical economics literature on the impact of health privacy rules.