Privacy and the Economics of Health Care Information

76 Texas Law Review 1 (1997)

Posted: 23 Mar 1998

See all articles by Paul M. Schwartz

Paul M. Schwartz

University of California, Berkeley - School of Law


Genetic science permits, to a previously unimaginable degree, predictions as to the illnesses that a person might confront in the future. At the same time, information technology permits greater transmission, sharing, and storage of personal health care data at ever lower costs on a national and even international basis. Electronic health care records are becoming commonplace in the health care industry. The combination of easy electronic dissemination of highly sensitive data, such as personal genetic information, and use of these data to predict future health risks has already caused significant harm. The critical issue is how the law should structure the use of personal medical data by government and private enterprise alike. Privacy and the Economics of Personal Health Care Information proposes that a strong economic argument can be made in favor of information privacy. In the current marketplace for health care and employment-- and any such markets that we are likely to have in the future-- an economically efficient regulation for health care information requires rules that are tied to and follow these data through various uses. Once identifiable health care information is created, it should remain protected health information that is subject to fair information practices. These norms should take the form of multidimensional standards that create both background terms around which parties can negotiate and a smaller set of mandatory rules that will be binding. Such standards seek both to minimize the costs of contracting in the privacy marketplace and to force the party with superior knowledge about the use of personal information to disgorge it. This Article also develops the essential fair information practices that should be implemented in a federal health care privacy statute.

JEL Classification: I19

Suggested Citation

Schwartz, Paul M., Privacy and the Economics of Health Care Information. 76 Texas Law Review 1 (1997), Available at SSRN:

Paul M. Schwartz (Contact Author)

University of California, Berkeley - School of Law ( email )

Boalt Hall #7200
Berkeley, CA 94720-7200
United States

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