[Kyoje-e gajin Kboheom-Sang] Medical Information Sharing Blocked for Insurers... "Going Against the Data Economy Era"

Unidentifiable Pseudonymized Data
Usable Without Personal Consent
Only Allowed for Medical, Research, and Public Institutions
InsureTech Innovation Falls Behind

[Asia Economy Reporter Oh Hyung-gil] Insurtech startup Company A, which was developing a system where artificial intelligence (AI) participates in the insurance claim review process to prevent incorrect or excessive insurance payouts, recently applied to the Health Insurance Review and Assessment Service (HIRA) for medical big data necessary for AI review but was rejected. Although pseudonymized medical data can be used for research purposes, the response was that it is impossible to use it for insurance-related purposes.

Without data, it is impossible to verify whether AI's review results are appropriate, causing the system development to face difficulties. A representative from Company A said, "We did not even request undisclosed medical information, so we do not understand why it was rejected on the grounds of being used for insurance," adding, "The government has rolled up its sleeves to activate the data economy by allowing data use in the financial sector, but it seems nothing has changed yet."

The "data economy" has set sail. Although the path to use data, called the rice of the Fourth Industrial Revolution, for industrial and commercial purposes rather than research has opened, some sectors still remain neglected. That sector is the insurance industry.

With the enforcement of the "Data 3 Act" in August, the government relaxed regulations to allow pseudonymized information that cannot identify individuals to be used without the consent of the data subjects. However, in the insurance industry, health and medical data still remain an "untouchable" area.

Korea's health and medical data, supported by a national health insurance system covering all citizens, have infinite utilization value, but due to backward misunderstandings such as "others can see personal medical records," the path to industrial use is blocked.

The insurance industry argues that if pseudonymized health and medical data are opened, it will be possible not only to calculate insurance premiums more rationally but also to provide coverage that citizens need in a timely manner.

Health and Medical Data Utilization Guidelines Exclude Financial Sector

◆Insurance and the distant data economy=In the current work by the Personal Information Protection Commission and the Ministry of Health and Welfare to establish "Health and Medical Data Utilization Guidelines," the financial sector is effectively excluded.

The government plans to limit the entities that can use pseudonymized health and medical data to medical institutions, researchers, medical-related companies, and public institutions. While industrial purposes such as medical device or drug development are allowed, there will be no way for financial companies or healthcare firms to utilize health and medical data.

The insurance industry has continuously proposed that pseudonymized health and medical data be available for use across all industries. Despite persistent demands, the industry sees little chance that this will be reflected in the upcoming guidelines.

The biggest reason is the fierce opposition from civic groups. These groups threaten, saying, "De-identification of medical information itself is illegal, and if insurance companies use it commercially, we will take civil and criminal action."

The National Assembly also has a pervasive atmosphere sensitive to insurance companies' use of health and medical data. HIRA began opening medical data in 2013 and introduced a health and medical big data system in 2014. Insurance companies have been analyzing medical demand and developing insurance products using de-identified patient information to create new risk coverage. However, after being criticized in the 2017 National Assembly audit for providing data to insurance companies, data provision has been completely suspended to this day.

HIRA and the National Health Insurance Service refuse to provide health and medical data, arguing that it could be used by insurance companies to deny insurance claims. The industry opposes this, stating that since the information cannot identify individuals, it is practically impossible to use it to deny insurance claims.

Currently, only medical data collected and investigated by insurance companies themselves can be used. The Financial Services Commission recently issued an authoritative interpretation in response to the insurance industry's inquiry about whether pseudonymized disease information can be used without the customer's consent, stating that it is possible.

A Financial Services Commission official said, "Commercial use of pseudonymized disease information is possible for statistical compilation, research, and public interest record preservation purposes," but added, "Establishing guidelines to utilize public medical data seems to be a different matter."

Utilizing Overseas Papers Inevitable for Developing Diabetes-Related Risk Rates

◆Data utilization needed for consumer benefits=The insurance industry explains that using health and medical data will further increase consumer benefits.

Insurance companies have had to develop insurance products using overseas medical data from countries such as Canada and Australia. Since there are inevitable differences from the health status of Korean citizens, they have faced limitations in reflecting actual national risk rates in premiums or coverage.

In fact, Insurance Company B, which was developing diabetes-related risk rates such as stroke, end-stage renal failure, blindness, and foot amputation among diabetic patients, had to use overseas research paper data due to the inability to secure data through domestic public institutions.

Insurance coverage for specific diseases can also be expanded. For example, if the risk of cardiovascular and cerebrovascular diseases in hypertensive patients can be calculated, it will open the way to develop products for patients who previously had difficulty obtaining insurance.

Providing customized healthcare services based on age, gender, and lifestyle will also become possible. Currently, domestic healthcare services remain at a basic level, such as offering premium discounts based on step counts. As the healthcare sector grows, it is expected to foster startups and create jobs.

An insurance industry official said, "If the rating system is improved based on medical data, it will contribute to economic benefits for citizens, such as premium discounts, as well as enhancing choice through product diversification," adding, "If it is difficult to provide data to insurance companies, it is necessary to consider creating a consultation channel to discuss the scope of data provision."