My Data or My Health? Heterogenous Patient Responses to Healthcare Data Breach

Abstract

Data breaches pose grave dangers to consumers, brands, and society. In particular, healthcare data breaches are most costly ($7.1 million each) and damaging, as the breached data are irrevocable, and patients face limited alternatives and daunting switching costs. Only a handful of studies have examined the immediate impact of retail data breaches. This research hence presents an initial population-scale evidence of patients’ heterogeneous responses to a healthcare data breach, and the social disparity underlying such response heterogeneity, in both shorter- and longer-terms. Leveraging the University of Washington Medicine (UWM) breach as a natural shock, novel location big data, and a multitude of methods (GIS, machine learning, DiD), the analyses of 11.4 billion location records from a quarter of the Seattle population over a year reveal profound, long-lasting, and heterogeneous impacts of the data breach on patients. 77% patients reduced their visitations to UWM by 18% and the impact persists even after 10 months. Strong response heterogeneity prevails, including hospital switching (9%), diversification to multiple hospitals (20%), withdrawal from healthcare (9%), and interestingly even a shift toward a healthier lifestyle. We also uncover an alarmingly stronger impact of the data breach on the disadvantaged, including the patients with reduced healthcare agility, greater need for healthcare, or limited access to alternatives, hence calling for more personalized, targeted, and equitable policies toward healthcare cybersecurity and mitigations of data breaches.

Keywords: Mitigation-in-Marketing (MiM), cybersecurity data breach, healthcare marketing, consumer privacy, social justice, location big data, geo-spatial analysis, Difference-in-Differences (DiD)