Big Data Could Save Healthcare System $300+ Billion Annually

by Fenwick & West Life Sciences Group

[author: Michael Esquivel]

According to a recent report released by Rock Health, Big Data has the potential to save the healthcare system more than $300 billion per year by improving poorly coordinated care, reducing fraud and abuse, and improving administrative and clinical efficiency. Big Data refers to the insights that organizations—in this case providers, payers, and drug and device development companies—can gain from analysis of growing sources of structured and unstructured data from electronic medical records, sensors, and smart phones. Collecting and analyzing the vast amount of data currently available provides the opportunity to identify trends or patterns to improve quality and lower the cost of care. Big Data applications (apps), for example, could identify leading causes of hospital-acquired infections or readmissions, which could lead to better preventative measures while lowering the cost of care.

Harnessing the power of the tremendous amount of data available also has the potential to improve drug research and development by managing and analyzing the growing pool of public and private genomic information. By leveraging Big Data, companies hope to improve drug development by better identifying drug candidates for targeted therapies and reducing the risk of clinical trial failure. Scientists are already using genomic data to improve their understanding of several different types of cancer.  

Big Data also faces some important adoption challenges and legal concerns. Consumer concerns about privacy and security of personal information remain key issues. Companies using healthcare data to develop apps often need to balance access to relevant information with consumer privacy concerns. Leaders in cancer research have already expressed concerns about how barriers to disclosure of medical information could limit future advances. Federal laws also regulate collection and use of a consumer’s medical data. The Federal Trade Commission (FTC) requires businesses to obtain a consumer’s affirmative consent before collecting and sharing medical information. Furthermore, the Privacy Rule under the Health Insurance Portability and Accountability Act (HIPAA) contains extensive regulations on the use and disclosure of individually identifiable health information. 

The HIPAA Privacy Rule defines individually identifiable health information broadly. The definition includes information that relates to an individual’s past, present or future physical or mental health condition and for which there exists a reasonable basis to believe that the information can be used to identify the individual. A key challenge for data driven apps in healthcare will be distinguishing between identified health information that is tightly regulated and de-identified information, which the Privacy Rule does not restrict. The Privacy Rule, moreover, defines de-identified health information as information that neither identifies nor provides a reasonable basis to identify an individual. Information can be de-identified for the purposes of the Privacy Rule by a safe harbor approach, which requires removing 18 different identifying markers from the information. On top of the expansive definitions, the rule contains several restrictions, as well as exceptions, on how covered entities—defined as health plans, providers and healthcare clearinghouses—use health information.

Congress has also recently enhanced security protections for personal health information. The Health Information Technology for Economic and Clinical Health (HITECH) Act, passed as part of American Recovery and Reinvestment Act of 2009 (ARRA), provides breach notification regulations. Under the HITECH Act, HIPAA-covered entities must promptly notify affected individuals of a breach, as well as the Department of Health and Human Services (HHS) Secretary in certain instances. The HITECH Act contains strict penalties for data breaches, even for breaches caused by third parties.

The insights potentially discoverable through Big Data represent a significant opportunity to transform the delivery of healthcare services and the development of new treatments for serious diseases like cancer. Successfully implementing these solutions will require diligent management of consumer privacy and security concerns. Perhaps most importantly, any app that uses medical data will need to consider privacy and security law compliance issues.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Fenwick & West Life Sciences Group | Attorney Advertising

Written by:

Fenwick & West Life Sciences Group

Fenwick & West Life Sciences Group on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.