A Guide to Data Privacy in Healthcare: Compliance and Best Practices

Healthcare is a very personal experience. In order to receive the best care, individuals must share the most intimate details about themselves. For this reason, trust between patients and healthcare providers is crucial. Data privacy plays a key role in protecting this bond.

In this article, we will explore the importance of safeguarding patient information in healthcare, outlining the main challenges faced in this essential sector. We will also offer some best practices for ensuring data privacy and security in healthcare to protect patients and maintain the integrity of healthcare systems. 

What Is Data Privacy in Healthcare?

In the healthcare industry, data privacy consists of the policies and practices used to protect sensitive patient information from unauthorized access and provide patients with control over how their data is used. The goal is to keep personal or sensitive medical information confidential, ensuring it’s private between patients and their healthcare providers. Ultimately, this helps maintain patient trust and confidence. 

Regulatory and Legal Considerations in Healthcare

Facts privacy and security in healthcare are heavily regulated due to their importance in protecting patients. Three of the most significant frameworks are the Health Insurance Portability and Accountability Act (HIPAA) and My Health My Data Act (MHMDA) in the U.S. and The General Data Protection Regulation (GDPR) in the EU. Additionally, some regions have their own privacy laws, which further impact healthcare data protection. 

HIPAA, MHMDA, and GDPR Compliance

Although HIPAA, MHMDA, and GDPR all aim to protect data security and privacy in healthcare, they have many differences that set them apart:

Staying up to date with these requirements is an essential aspect of data privacy, as failure to do so can lead to severe fines and reputational damage.

The Importance of Data Privacy and Security in Healthcare

Data privacy and security are imperative in healthcare as they underline the level of trust between a patient and their practitioner. This affects all aspects of the healthcare industry. When a patient feels they can trust their healthcare provider, they’re more likely to seek treatment and accept medical advice. As a result, this increases people’s overall health and reduces strain on health organizations. 

Beyond establishing trust, however, there are several reasons why data privacy is so essential in healthcare.

Enables Better, More Personalized Care

When health-relevant patient data is collected, stored, and shared in a secure way, healthcare professionals can access accurate and up-to-date medical information when and where they need it. This allows practitioners to collaborate more across departments, improving coordination and continuity of care. With a more complete picture of a patient’s medical history, healthcare workers can make better informed decisions and tailor treatments to individual needs. In turn, patients receive earlier interventions, more accurate diagnoses, and better overall health outcomes.  

Protects Against Cybersecurity Threats

Healthcare companies inevitably accumulate large amounts of sensitive patient data, but this makes them a prime target for cybercriminals. Medical records contain deeply personal information, from prescriptions to financial and identifying features, which can be exploited for identity theft or even blackmail. Data privacy measures mitigate this risk by limiting the amount of data retained, ensuring only necessary details are stored, and identifying vulnerable data stores with audits. 

Additionally, strong data privacy frameworks promote measures to safeguard this information, such as encryption and access controls. In doing so, they not only protect the patient from harm but preserve the organization’s reputation and integrity. If patient information were to be compromised, the organization would face legal consequences and diminished public confidence. 

Ensures Compliance With Legal and Ethical Standards

Regulations such as HIPAA, the GDPR, and Washington’s MHMDA set strict guidelines on how patient data should be handled. The aim of these data privacy laws is to ensure patient rights are respected. In particular, MHMDA bridges the gap between health specific laws such as HIPAA, and more general privacy regulations like the GDPR. It expands protections to a wider range of health data, including that collected outside of healthcare settings.

Though they can be a challenge to keep on top of, it’s essential that healthcare providers comply with these regulations to maintain ethical standards and avoid legal penalties. Failure to do so can result in fines, lawsuits, and even criminal charges. For instance, HIPAA violations can carry penalties of up to $1.5 million per year, whereas GDPR fines can reach 4% of global annual turnover. 

Reduces Administrative Errors

Secure access to accurate, up-to-date patient data, as a result of strong privacy practices, reduces the risk of administrative errors such as incorrect diagnoses, misinformed treatment plans, or wrong prescriptions. Crucially, privacy laws like HIPAA also grant patients the right to request corrections to their medical records if they believe information is inaccurate or incomplete, further improving data accuracy across systems and minimising the risk of error. Thus, data protection in healthcare leads to fewer adverse health outcomes or unnecessary procedures. 

Key Challenges in Healthcare Data Privacy

Healthcare providers have always had a duty to protect any sensitive information entrusted to them by their patients; however, this responsibility is now greatly exacerbated by the rise of digital systems. While technological advances offer greater efficiency and accessibility, they also introduce a myriad of new challenges to data privacy. Healthcare organizations must ensure patient consent is properly managed and prevent unauthorized sharing whilst navigating evolving regulations. 

Evolving Data Privacy Risks

The rapid adoption of online systems and digital health records, while largely beneficial, has unfortunately increased the risk of data privacy breaches. Unlike security threats, privacy risks often originate from third-party data sharing or improper data handling. Your organization might even have a privacy incident without realizing it if it’s handling data in an improper fashion.

Some of the most prevalent privacy risks include:

• Inadequate Data Governance: Weak or outdated data access, retention, and sharing policies can result in unintentionally disclosing sensitive patient information. While data sharing with external bodies such as insurers or specialists is often necessary, doing so without strict privacy protocol can result in data being shared with the wrong individuals through human error, unclear policies, or gaps in system security. 
• Lack of Patient Consent Management: Healthcare organizations need to track and manage patient consent preferences thoroughly, otherwise they risk failing to comply with privacy laws. HIPAA, the GDPR, and MHMDA require that patients be informed about how their data will be used and, in many cases, require explicit consent for data collection and processing. Failing to uphold these rights can result in legal consequences and erode patient trust.

These breaches in privacy not only disrupt patient care but could also result in the theft of personal information. As more data is digitalized, healthcare companies face a never-ending fight to stay ahead of data privacy by implementing stronger management measures. 

Laws and Regulations 

In addition to managing their data privacy, healthcare providers must navigate a complex regulatory landscape. Laws such as HIPAA, the GDPR, and the MHMDA strictly regulate the collection, storage, and sharing of patient data. 

HIPAA requires healthcare organizations to implement administrative, physical, and technical safeguards, and to give patients certain rights, including access to their data and the ability to request corrections. Violations can result in penalties ranging from $100 to $50,000 per violation with annual maximums of up to $1.5 million and even criminal charges in the case of fraud or willful neglect.

Under the GDPR, health information is classified as a “special category” of personal data, and therefore receives extra protection. The processing of health data is generally prohibited unless special conditions are met, like obtaining specific consent or meeting public interest grounds. Non-compliance can lead to fines of up to $20 million or 4% of annual global turnover (whichever is highest). 

Washington’s MHMDA is a newer law. It goes one step further than HIPAA, applying not just to healthcare providers but also businesses that collect consumer health data. The act emphasizes consumer consent, transparency, and data minimization to give people more control over their health information. 

These regulations are needed to help keep patient data confidential in healthcare. However, complying with them can be a significant challenge. Many healthcare businesses struggle due to inefficient resources or technical infrastructure. 

Because data privacy regulations are so complex, organizations must regularly update their practices to ensure they’re fully compliant. 

Solutions and Best Practices for Data Privacy in Healthcare

Ensuring strong data privacy in healthcare requires a proactive approach. Due to the complexity of regulations and growing concerns around patient consent, healthcare providers must implement a multi-layered system to ensure compliance and maintain transparency. 

Below are a number of solutions for data privacy challenges that healthcare providers can use to safeguard sensitive data while retaining trust. 

Implementing Strong Data Privacy Measures

To protect patient privacy, healthcare organizations must adopt strong strategies, including:

Data Anonymization and Minimization

Where possible, healthcare organizations should aim to only collect minimal patient data—only the most necessary information needed for medical and administrative purposes. Additionally, data should be anonymized to ensure that individuals can’t be identified if their information is shared.

Consent Management and Transparency

Perhaps the most important aspect of data privacy in healthcare is ensuring patients have control over their information. Organizations should obtain explicit consent before collecting or sharing patient data and must provide clear policies on how it is used. Furthermore, patients must be allowed to modify or revoke this consent at any time. 

HIPAA requires healthcare providers to obtain written consent from patients for the use of or sharing of their information beyond treatment, payment, and healthcare operations. They must also be informed of their rights to access and amend data.

The GDPR and MHMDA both require informed consent before collecting health data. The MHMDA specifically allows patients to withdraw consent at any time and emphasizes data minimization and transparency about data use.  

Privacy-Focused Data Storage and Access Controls

To prevent patient data from being exposed to unwanted individuals, it’s important to store information in databases with restricted access. Access controls can be used to ensure only authorized personnel can view sensitive data.

Compliance with Regulatory Requirements 

Adhering to data privacy principles such as HIPAA and the GDPR is not only a legal responsibility but also ensures healthcare providers retain patient trust and can improve health outcomes.

Regular Audits

Audits are detailed examinations of processes and procedures that can be conducted internally or by a third party. They determine whether an organization is correctly adhering to regulatory requirements. Regularly auditing a healthcare practice’s data privacy is invaluable in identifying any gaps and improving the confidentiality of its sensitive information.

Staff Training

Every staff member in a healthcare organization should receive regular training in data privacy best practices. This includes awareness of potential threats and the correct handling of data. Ongoing education in this area helps to reduce human error that could potentially result in a data privacy breach. 

Data Retention and Disposal

A crucial part of data protection revolves around how long data is stored and how it is disposed of. Healthcare providers should set clear guidelines on how long they will keep patient data. Additionally, every staff member should be aware of how to securely dispose of data once it's no longer needed. This is an important part of both HIPAA and GDPR policies. 

Risk Assessments and Incident Response Plans

Despite taking all the above measures to protect data privacy in healthcare, incidents can still happen. As a result, it’s essential that companies prepare for potential unauthorized data exposure by undergoing privacy risk assessments and knowing how to respond should an incident occur. 

Ongoing Risk Assessments

Evaluating any potential patient privacy risks will help to find solutions to these before they become an issue. Continually improving privacy is the best way to keep it effective. 

Privacy impact assessments (PIAs), which evaluate how projects or processes may affect data privacy, play a key role here. They help ensure healthcare providers identify risks early so they can proactively address privacy concerns. 

Incident Response Plan 

If a data privacy breach does occur, it’s best to be prepared. A clear response plan gives organizations the best chance of containing and mitigating the issue to reduce its impact. A comprehensive plan will include steps for detection, containment, and reporting. 

Simulated Privacy Breach Drills

Conducting a privacy breach drill at regular intervals is an effective way to identify flaws, as well as ensuring a team can act swiftly to manage the situation should a real issue arise. Simulated occurrences might include:

• Unauthorized data access (e.g., an employee improperly accessing patient records).
• Consent management failures (e.g., a patient’s data is shared without proper authorization).
• Third-party vendor data mishandling (e.g., a cloud provider fails to meet privacy requirements).

Managing a Healthcare Data Breach

A data breach in a healthcare organization can have serious consequences. In addition to threatening non-compliance, it compromises patient privacy, damages trust, and sours reputation. Sometimes, however, a breach occurs despite best efforts to prevent it. In this case, it’s essential to take a well-coordinated approach to contain the issue, mitigate its impacts, and prevent future recurrences. Below are some key steps to manage a healthcare data breach. 

Steps for Containment and Mitigation

As soon as a breach is detected, it's imperative to act immediately to reduce the extent of the damage. 

• Identify and isolate the breach: Privacy teams should determine the size of the breach and isolate affected systems to prevent further unauthorized access.

• Notify internal teams and authorities: Report the breach to any internal IT and compliance teams as well as legal advisors. 

• Inform affected patients: Organizations should identify the patients whose data was breached and aim to be transparent, giving detailed information on what data was compromised and offering protective steps. 
• Secure vulnerabilities: To prevent further exploitation, IT teams should work to reinforce privacy measures to prevent the issue from happening again. 

Post-Breach Analysis and Recovery

After containing a breach, organizations must identify the cause and take corrective action. 

• Conduct a thorough investigation: A detailed analysis should be conducted to determine how the breach happened and whether any internal privacy weaknesses contributed. 
• Review and strengthen privacy measures: Organizations should work to update their privacy policies, and refine access controls to prevent the issue from recurring. 
• Provide further staff training: Many breaches occur due to human error. The best way to prevent this is to ensure staff are able to handle data in a confidential manner. 
• Rebuild patient trust: Openly communicating any privacy improvements and showing accountability for past issues will help patients to regain trust. This helps restore confidence in the organization’s ability to protect patient data.

State-Specific Regulations

In addition to federal and international laws such as HIPAA and the GDPR, certain states extend these by implementing their own healthcare data privacy regulations. These help to further protect patients’ privacy. 

While you can find detailed information on state privacy laws in our article on “U.S. Data Privacy Laws”, some of the most prevalent are outlined below: 

• California Consumer Privacy Act (CCPA): This gives California residents additional control over their personal data by allowing them to access and delete data as well as restricting how it's shared.
• New York SHIELD Act: To impose stricter security, SHIELD requires healthcare providers to implement specific safeguards that help to uphold patient privacy.
• Texas Medical Records Privacy Act: This adds to HIPAA regulations by further restricting how patient data is used in Texas.

How Osano Supports Data Privacy in Healthcare

Data privacy in healthcare is about more than just compliance—it’s an integral aspect of patient trust. 

Many healthcare organizations are already prepared to comply with industry-specific laws like HIPAA; however, data privacy regulations increasingly apply to patients’ non-health data, like the GDPR, CCPA, MHMDA, and others.

With these complex and ever-evolving privacy laws, healthcare organizations need reliable solutions to stay abreast of privacy protection more than ever.

Osano helps organizations to manage their data privacy obligations more successfully by offering a comprehensive suite of tools for compliance tracking, consent management, and monitoring vendor risks. 

Healthcare providers should have the freedom to focus on delivering quality patient care. By automating key privacy tasks to ensure private information remains secure, Osano makes this possible. 

Schedule your demo with Osano to discover how we can help manage your complete privacy program in one place, ultimately securing your patient’s trust.