Encryption and the Loss of Patient Data

39 Pages Posted: 10 Feb 2011 Last revised: 7 Sep 2014

See all articles by Amalia R. Miller

Amalia R. Miller

University of Virginia - Department of Economics

Catherine E. Tucker

Massachusetts Institute of Technology (MIT) - Management Science (MS)

Date Written: March 14, 2011

Abstract

Fast-paced IT advances have made it increasingly possible and useful for firms to collect data on their customers on an unprecedented scale. One downside of this is that firms can experience negative publicity and financial damage if their data are breached. This is particularly the case in the medical sector, where we find empirical evidence that increased digitization of patient data is associated with more data breaches. The encryption of customer data is often presented as a potential solution, because encryption acts as a disincentive for potential malicious hackers, and can minimize the risk of breached data being put to malicious use. However, encryption both requires careful data management policies to be successful and does not ward off the insider threat. Indeed, we find no empirical evidence of a decrease in publicized instances of data loss associated with the use of encryption. Instead, there are actually increases in the cases of publicized data loss due to internal fraud or loss of computer equipment.

Keywords: Healthcare IT, Encryption, Data Breaches

Suggested Citation

Miller, Amalia R. and Tucker, Catherine E., Encryption and the Loss of Patient Data (March 14, 2011). Available at SSRN: https://ssrn.com/abstract=1757354 or http://dx.doi.org/10.2139/ssrn.1757354

Amalia R. Miller

University of Virginia - Department of Economics ( email )

P.O. Box 400182
Charlottesville, VA 22904-4182
United States

HOME PAGE: http://people.virginia.edu/~am5by/

Catherine E. Tucker (Contact Author)

Massachusetts Institute of Technology (MIT) - Management Science (MS) ( email )

100 Main St
E62-536
Cambridge, MA 02142
United States

HOME PAGE: http://cetucker.scripts.mit.edu

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