The origin of Data Economics as an applied science is closely linked to health care; the first commercial applications of the Lydion Engine were to package administrative health data into Lydion data assets and use those Lydions as a component of shared answers to adjudicate pharmaceutical contracts for a high-risk, high-cost therapy. Members of our team went on to publish research on Lydion applications in health care contracting for various scenarios: oncology drugs, in EU hospitals with GDPR requirements, and paired with financial instruments to hedge longevity risk.
As we built out these applications, we learned more about the fraught state of data in the health care world, and were perplexed that the most prolific data generators—patients and clinicians—are somehow cut out of the data value chain, while enormous financial rewards accrue to third-party data harvesters and aggregators. Despite data protection laws that purport to secure health data, such data middlemen are able to accrue vast datasets of extraordinarily personal and, arguably, impossible-to-anonymize data points, including everything from medical billing and insurance information to the most unique sequences of individual DNA and RNA, through data sharing loopholes such as the HIPAA Business Associate Agreements. Their companies are worth billions; a single data license with a pharmaceutical company can yield them millions of dollars in a year. In some cases, these same companies own lab or diagnostic firms that turn around and send patient co-pay bills to collection agencies, even though they would have no business model if it were not for these patients’ data.
Something about this is wrong.
This edition of The Lydion Magazine is highly personal to us, not only because of our philosophical and economic beliefs around data ownership and what the science of data economics can enable, but also because the contributors to this edition have all been there—as patients struggling to get our hands on our own records, as researchers trying to understand why health data is sometimes so limited, and as health care industry leaders frustrated that the pace of innovation seems to stall based on our inefficiencies in gathering data. Any health economist will point out the many market failures and inefficiencies that plague health care delivery systems. A health data economist will point out all of the ways that data could be solving these problems, if only we had the will to flip the system.
The good news is that patients, clinicians, and scientists are waking up. We are increasingly realizing the value of our time, our expertise, our labor, and our data. The 21st Century Cures Act demands that patients can access their data in a digital format and without cost. Despite pushback from EHR companies and hospital groups, this access seems to be moving ahead. In our own conversations with industry executives, coming from organizations that range from hospitals like Kaiser Permanente, Johns Hopkins, and Mayo Clinic to life sciences leaders at Pfizer, Roche, Novartis, and J&J, the questions have become more insightful and pressing: “What is our data worth? How do we capture that value? How do we ensure that data we purchase is valid and accurate? How do we become more patient-centric in how we use data? How do we protect data—ours and that of our patients who trust us?”
These are high-quality questions. In speaking with patient advocacy leaders, the questions are even more urgent, because increasingly-sophisticated patients realize existing data may hold the key to cures, but only if it can be unlocked from data silos and freed from behind hospital walls. They are savvy enough to know that no amount of aggregated claims or EHR data will advance a new drug through FDA approval, and they demand better control and transparency in how their data is used.
We will comment more below, but first, we’ll share voices from the front line.
Jennifer Hinkel - Editor-in-Chief of The Lydion Magazine, and Managing Director of The Data Economics Company
Arka Ray - Managing Director of The Data Economics Company
Ben Bagamery - Senior Engineer at The Data Economics Company and Producer of The Lydion Magazine
