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Most of our attention in the digital privacy debate has been focused on web advertising, social media, and mobile devices. Which is appropriate — but this actually undersells the scope of both the challenge and the opportunity. So far, the internet has revolutionized media, search, social, finance, entertainment, and e-commerce.
Information technology, however, is now poised to revolutionize many sectors of the economy that have not yet fully exploited the internet and other digital tools. As data collection, creation, and analysis become a more important part of other industries — such as health care and transportation — privacy questions and policy challenges will only multiply.
Health care is perhaps the starkest example of an industry starved for innovation. Health care spending in the US is pushing past 18 percent of gross domestic product and will likely top 20 percent in the next five years. Yet this industry, which makes up one-fifth of the economy, is among the least productive.
Figure 1 shows the vast productivity divergence between industries that make intensive use of information technologies and those that do not. By this rough measure, the digital industries are eight times more innovative than health care.
Fortunately, health care is on the cusp of an information revolution. First, smartphones and other wearable devices will make medicine more personal and cost-effective. Second, based in part on the data collected by these devices, Big Data and artificial intelligence will revolutionize health research. Third, our new understanding of the human body as a complex information network, embodied in genomics and proteomics, for example, is finally turning biology into an information science. And fourth, building on the foundation of these advances, the business of health care is ripe for transformation, making insurance, diagnostics, delivery, prevention, and maintenance look far more like the modern digital economy than the industrial-era industry it still is today.
Health is just one example showing how boosting the information intensity of the economy is central to fostering long-term economic growth.
At the same time, health data are especially sensitive. If we want to harvest this immense data opportunity, consumers are going to have to be able to trust the system. Today’s health privacy law, HIPAA, imposes a number of practices that (1) utterly frustrate both consumers and providers but (2) offer relatively few privacy-protecting benefits to compensate for the hassles and inefficiencies. Fortunately, the very digital tools that are creating so much new data can also make health more private and more user-friendly. It doesn’t have to be a paradox. With a thoughtful update of our privacy laws, we probably can improve both.
Admittedly, it will be difficult to include an update of health privacy into a new digital privacy law. But as policymakers consider a new privacy architecture for the digital age, they should be thinking about how we might also improve data usage in health and other older industries, which need more data intensity, not less.
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