Who should profit from the sale of patient data?

Patients’ medical data constitute a cornerstone of the big data economy. A multi-billion dollar industry operates by collecting, merging, analyzing and packaging patient data and selling it to the highest bidder. Data buyers range from health policy researchers to pharmaceutical companies and marketing corporations. While this industry has been quietly operating and accumulating profits for many years, patient advocacy groups have recently turned their attention to it. They argue that patients should own their medical records and therefore should be entitled to a fair share of the profits created through the sale of their data.

Data stewardship, not ownership

With one exception, every U.S. state either recognizes medical providers as the owners of medical data or do not have any laws to confer specific ownership or property right to medical records. Only New Hampshire explicitly grants ownership of data to patients. Regardless of state law, I believe that we must abandon the discussion of data ownership and instead focus on data stewardship. The ownership of data, whether granted to patients or to providers, will have dangerous unintended consequences.

Patients’ ownership of data implies that they would have a right to change their medical data as they wish. For example, an individual could edit the results of a blood test to show lower levels of cholesterol when applying for a life insurance policy, or refuse the Centers for Disease Control (CDC) access to medical records and undermine the agency’s efforts to predict and manage the outbreak of viral diseases. On the other hand, providers’ ownership of data implies that they can destroy data without notifying patients or refuse to share them with oversight agencies if a malpractice lawsuit is brought against them.

A model of data stewardship alleviates these concerns. Once a party takes the stewardship of data, they have to act according to a set of rules which guarantee the benefits of all other parties. Despite some notable exceptions such as the Apple Health Application in which patients will be in charge of storing and sharing of their medical records, medical providers are designated as de facto stewards of patients’ medical data in the U.S. healthcare system. This aligns with the long term vision of policymakers who authorized billions of dollars to incentives medical providers to adopt Electronic Health Records (EHR) systems so that they could collect, store, and share patients’ medical data in electronic format.

Data management is an expensive and risky business

The major challenge of the data stewardship model is the fair compensation of the steward. It is very expensive to store digital data: The costs of implementing an EHR system at a hospital network can exceed 1 billion dollars. Providers not only have to pay for upfront technology implementation, but also continuously invest in maintaining their systems and ensuring their security. Additionally, they bear the risks of potential privacy breaches which are extremely common in the healthcare sector and have significant financial and organizational consequences for health care providers.

Healthcare providers, or any other agency, will not invest in building and maintaining technology platforms for collecting and maintain medical data unless they have adequate economic incentives to do so. To recoup these costs, medical providers should either charge patients directly for their data management services, or be allowed to monetize such data. A system in which patients are neither willing to pay providers for keeping their data nor willing to allow the providers to monetize their data cannot succeed financially.

Sharing profits IMposes Extra Costs, privacy risk

Sharing of profits with patients has many challenges. First, although patient data constitute the raw material necessary for data mining, it has very limited value before processing. It is the aggregation, merging, and analyses of such data that creates value. For example, the hospitalization history of a patient on its own provides limited information. However, when such data are merged with the patient’s family history and compared to similar data of a large group of patients, one can infer the chance of re-admission for the patient, which will be of significant medical and financial value. In other words, the value of patient data emerges only after significant processing. This makes it very difficult to assess the fair value of any single patient’s data.

Second, even if one could successfully assess the fair value of patients’ data, distributing the fair share of profits to patients would require a sophisticated tracking and accounting system far more complicated than that of the Internal Revenue Service (IRS). The cost of implementing this system will significantly eat into profits and further reduce the amount that patients receive. More importantly, such a system would be a significant threat to patients’ privacy because it will require identification of patients in order to make financial transactions with them.

A NeW Model For DATA Sharing

An overwhelming majority of patients are willing to share their medical data with patients, doctors, researchers and even pharmaceutical companies. That is why in almost all of the health information exchange organizations in the U.S., most patients consent to sharing of their medical records. The indirect benefits that patients receive from sharing of their records, such as access to newly developed life-saving drugs or targeted marketing, could easily surpass the small financial benefits that they could receive from the sale of their data. The benefits of disclosing health information are not necessarily medical or economic: Once individuals are given the choice, pure altruistic motives will be strong enough for a majority of them to freely disclose their information.

There is potential for private businesses to build platforms that enhance the value of patient data and share the additional profits directly with patients. A good example is a platform for sharing patient data for research on Alzheimer’s disease. It is the nation’s most expensive disease, affecting over 5 million Americans each year, and yet still has no cure. Despite notable efforts, such as the Alzheimer’s Associations’ Trialmatch program, it is very difficult to find qualified patients to enroll in clinical trials.

A system in which interested individuals could share their detailed and identified medical records with Alzheimer’s researchers and pharmaceutical companies would both benefit society and save lives. The system could analyze data and alert patients if they qualify for a clinical trial, which would reduce the time and cost required to complete the trial. It could also diagnose the patient’s disease early or even find a treatment. Moreover, such system could easily financially reward patients for their data which are otherwise difficult to access. Policymakers should consider the long-term benefits of patients and refrain from imposing expensive regulations that could potentially slow down research and development activities in the healthcare sector.