"Health 2.0" vs. Health Insurers: The Looming Clash

Last Updated Aug 6, 2008 7:38 AM EDT

Two items I recently stumbled across together highlight a looming clash between the sort of data-enabled "personal medicine" often touted as "Health 2.0" and dystopian fears that insurers' growing access to patients' digital medical information will increasingly restrict coverage -- or at least make it considerably more expensive.

First, the dystopia. Earlier this week, the Washington Post revealed that health insurers can now obtain a sort of health "credit report" on individuals thanks to the vast store of digitized drug-prescription data now held by "pharmacy benefit managers" like ExpressScripts. Drug-use information, of course, is highly useful to insurers as a reliable proxy for an individual's health; as the story notes, if your data records show you've been on the highest dose of a cholesterol-lowering statin for 18 months, that signals you have an almost intractable cholesterol problem and face an elevated risk of heart attack or stroke.

(This WaPo story also happens to expose the fundamental silliness of "privacy concerns" raised by critics of e-prescription services, who recently got a hearing over at the WSJ Health Blog. In most cases, drug data is digitized and stored the moment a patient hands over her doctor's prescription form; it matters not at all whether the doctor initially sends the prescription in digital form, except that e-prescribing seems highly likely to cut down on prescription errors. Barn door: open; horse: gone.)

In any event, the use of these drug reports clearly work against the interests of individuals with prescription-drug histories, as they'll likely have to pay higher premiums for individual insurance -- if a health plan will offer them a policy at all, that is. In this sense, these medical credit histories represent one more blow to "risk pooling," the idea that healthy people pay insurance premiums to cover the costs of those who happen to get sick. Insurers, of course, find it much more profitable to risk-adjust policies so that people who are likely to get sick pay more, forcing such people to bear more of the cost of their medical problems. The downside is that this ultimately gives insurers every incentive to cover only healthy people and to restrict or deny coverage to the sick.

On the other side of the spectrum, meanwhile, Matthew Holt of the Health Care Blog notes "little footsteps" toward the portability of personal medical data that would allow doctors to maintain a much more comprehensive view of their patients' health. "We keep waiting for that day when data can flow and then services can be overlayed on top," he writes. "Then consumers can get more efficient services from their physicians."

The problem isn't that Matt is right and critics of the prescription-drug record are wrong, or vice versa. The fact is that more widespread use and dissemination of patient data is a double-edged sword, one that seems likely to benefit patients in some ways while disadvantaging them in others. And so long as that's true, the adoption of new healthcare IT products is likely to be a stop-and-go proposition at best.

The fundamental problems are twofold. First, patients don't have enough control over their own data, a subject the WaPo article addresses briefly -- although it will likely require government intervention to actually make any sort of meaningful control possible. Second, and more important, patients and their doctors are never going to be able to exploit the emerging medical-data universe while health insurers' business models are built on forcing sick people -- or even those more likely to become sick -- to pay more or do without coverage altogether.
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    David Hamilton is the assistant managing editor of CNET News. He has been writing and editing business and tech coverage for about two decades -- the majority of that at the Wall Street Journal in both Tokyo and San Francisco. He is a two-time winner of the Overseas Press Club award and has written for numerous magazines and blogs, including Slate, Science, VentureBeat, CBS Interactive's BNET, California Lawyer and the New Republic.