Value of Personal Health/Medical Data and Potential of the Personal Health/Medical Data Market

Abstract

A full-scale digitization of society is about to begin. Information, along with digital technology, is coming together as the Internet of Things, enhancing efficiency, rationalization and transparency and re-defining relationships. The coming digitalization will provide industry with an opportunity to transform business models and processes and gain competitive advantages. It will also provide a chance for individuals to live richer, more convenient lifestyles. Since information, both personal and industrial, increases in value as accumulated, Big Data has become an invaluable intangible asset. It is therefore important that there exist good quality Big Data in each area. Accordingly, one area that has become of particular interest to industry is personal health/medical information. Medical service is provided only by licensed medical professionals, but related services are expected to possess huge potential. Once enough health/medical information is accumulated as Big Data, individuals’ personal health/medical information can generate customized health/medical advice. At a societal level, it would also contribute to enhancing social welfare and reducing the total medical expenses of a nation. In this research, employing an economic approach, the value of personal health/medical information for individuals is evaluated and the conditions that affect individuals’ interest in receiving customized health/medical advice and willingness to disclose personal health/medical data for customized advice are explored. Since personal data that may include comprehensive medical checkup results and lifestyle information (sleep, meals) is highly sensitive and personal, disclosing such data to an external entity involves risks, including privacy concerns and potential data breaches. Thus, the decision to disclose would be made based on the trade-off between the risks and benefits of receiving customized advice. For the purpose of this research, a survey that includes conjoint analysis is conducted among individuals. Respondents are asked, among others, to what degree the introduction of data protection measures adopted by the entity would alleviate their fear of risk. Those measures include (a) compliance with guidelines stipulated by the government or industry associations, (b) data portability, including a right to request data erasure and (c) the entity's purchase of insurance to provide sufficient financial compensation to data breach victims. The survey results could be a good indication of possible policy agenda in the field of information. For example, the research assumes at least two kinds of constraints that may affect individuals’ decision-making: information asymmetry between the individual and the entity (external constraint); and individuals’ bounded rationality in context of the Economics of Privacy (internal constraint). The outcome would inform future policy for alleviating these constraints. Here is another example. Based on the sensitive nature of the information and possible social welfare contribution, the effective building of health/medical Big Data would be important. A market mechanism solution may need consideration from several aspects, including possible information oligopoly and possible abuse of this superior position. An open Big Data solution that treats Big Data as a public good may also require deliberation from various aspect, including how to incentivize innovation for first movers. The preference of individuals could provide some insight into this policy agenda.