Privacy Concerns Clash with Financial Incentives in Connected Healthcare Market

Personal data has the potential to radically transform the healthcare industry by providing health innovators with a wealth of information with which to build new drugs, treatment solutions and devices. However, consumers remain wary of the potential privacy violations that gathering such data entails. 
Market research firm Parks Associates published a new report that analyzes the adoption and impact of internet-enabled fitness and medical devices. The report shows that consumers’ willingness to share personal data when incentivized by a health insurance discount was mitigated by privacy concerns. Jennifer Kent, director of research quality and product development at Parks Associates, said in a press release, “monetary rewards are generally considered among the strongest incentives to generate consumer response, but the majority of connected health consumers are not ready to share their data in exchange for discounts on services or products at this time.”

Willingness to share personal data varies by device

The report states that individuals’ willingness to share their personal health data is dependent on the medical or fitness device they are using. According to the firm, 42 percent of digital pedometer users would be willing to share that health data, whereas only 35 percent of individuals would be willing to share data from a smart watch. Sleep-quality monitor owners were the least comfortable sharing personal medical data, with only 26 percent of respondents expressing a willingness to share. These statistics suggest that users are more protective of data they perceive as intimate.
Furthermore, as Park said, “more consumers are willing to share data to troubleshoot device problems, suggesting benefits that ensure owners get the full advantages of their products could be more enticing.” Consumers, it seems, are motivated by a multitude of reasons when it comes to sharing and protecting their personal health data.

Medical device data raises cybersecurity concerns

Consumers’ fears concerning the privacy of their medical data are not unfounded. Earlier this year, Greg Virgin, CEO of security firm RedTack, illustrated to NPR the ease of obtaining stolen personal data on the internet. For instance, he discovered an online dealer selling a pack of 10 Medicare numbers for 22 bitcoins, or approximately $4,700.
According to security firm Symantec (NASDAQ:SYMC), cyber attacks on healthcare companies increased by 72 percent between 2013 and 2014, with personal medical data fetching more money than financial information on the black market. These examples illustrate the severity of privacy concerns when it comes to medical device data.
However, there are also enormous benefits to be had from making this information available to medical device, biotech and pharmaceutical companies. Therefore, consumers and healthcare organizations must work to reconcile the costs and benefits of gathering personal health data. For investors, that spells opportunity in areas as diverse as cybersecurity, data and medical devices. As the healthcare industry becomes more interconnected, so too do opportunities for investing.
 
Securities Disclosure: I, Morag McGreevey, hold no direct investment interest in any company mentioned in this article.