
Hospitals Are Mining Patients' Credit Card Data to Predict Who Will Get Sick - paxtonab
http://www.businessweek.com/articles/2014-07-03/hospitals-are-mining-patients-credit-card-data-to-predict-who-will-get-sick
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Someone1234
This might be a little off topic but I often read articles like this, and
elsewhere, speculate on the "future" where so 'n so is able to see exactly
what you purchased on your cards for some nefarious reason.

So here is my question: Do stores REALLY pass on an itemised list to the
credit card processor? Because it was always my understanding that all they
passed upstream was the amount and the name of the establishment.

This article claims: "Imagine getting a call from your doctor if you [...]
make a habit of buying candy bars at the checkout counter"

I don't think that data exists outside of the specific convenience store where
you purchased the candy. The CC company would know that you spend an extra $1
at that place, but how do you tie that into bad eating habits? Maybe they
purchased an apple or a cup of coffee.

I'd really love some insight on this topic, and I will happily admit that
maybe my information is either out of date or just flat out wrong.

~~~
wiredfool
I'd pay for an itemized list of all the stuff I've bought at the grocery
store(s) over the last 6 months. I'd love that level of insight into budgeting
what is my family's third biggest expense.

FWIW, none of the stores I go to have loyalty cards, though I'm pretty sure
that they could do matching based on hashed card values or the name they get
back from the card. (That's could, not that they do. I'm not sure if PCI would
look at them sideways for hashing card values and using that as a key for a
data store)

~~~
cbhl
Just curious, but what country/part of the country do you live in? Virtually
every store I walk into either has a loyalty points system, a credit card, or
both.

~~~
Scoundreller
I've suspected loyalty points programs are just an accounting trick. You're
creating your own currency which doesn't always get used up, and you can
devalue whenever you need to make your quarterly numbers.

And if your program really catches on, you can get other retailers to sign on,
creating a side business, or spin it off as a separate business if someone is
willing to pay you for it (it's easy to segment off from your core business).

~~~
ghaff
In general, store points and so forth are something that stores hope you'll
perceive as being of greater value (and hence encourage loyalty) than they'll
every have to actually deliver on.

The norm with grocery stores though seems to be more in the vein of giving
instant savings to card holders. Some chains (Safeway out West is one of them
I think) have so many and such deep special prices that I have a card even
though I only shop there on vacation sometimes.

(Interestingly, Shaws--which is an Eastern US chain now owned by European
company I believe--discontinued their card in this vein a few years back.)

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rosser
The next step is "health insurance" (as we call it in the US, though it's in
actuality no such thing) carriers mining your credit card and loyalty program
data and hiking your rates if their model predicts you're going to need more
or more expensive care.

The problem is that unhealthy lifestyles (drinking, smoking, fast food, _& c_)
are disproportionately found among the lower socioeconomic strata, creating
yet another penalty for being poor.

~~~
Scoundreller
The funny thing is that the insurance industry is obsoleting itself.

If they perfectly assess risk, your annual premium will just be your annual
cost plus all of the administrative costs of insurance, so just self-insure.
We're getting closer and closer to that, further eliminating any value that
anyone gets from insurance.

~~~
CaptainZapp

      If they perfectly assess risk, your annual premium will just be your annual cost plus all of the administrative costs of insurance
    

Uhh, no. That's not how insurance works.

The idea of insurance is pooling risk. So if you're perfectly healthy you are
in essence paying for other people's treatment.

However, if you happen to run into very expensive health issues it's you that
profits from the premiums of other people.

If insurance works as you describe it it wouldn't make sense at all and
everybody would individually be responsible for her entire medical cost. With
partially ruinous consequences for the individual.

~~~
RobAley
> If insurance works as you describe it it wouldn't make sense at all and
> everybody would individually be responsible for her entire medical cost.
> With partially ruinous consequences for the individual.

I think that's his point.

~~~
readme
The exact costs will never be calculable in advance.

We are never going to reach a point where we can accurately predict whether
someone will be hit by a bus or shot.

~~~
Scoundreller
But we're getting better and better at it.

And better at real-time charging and paying for insurance in micro-increments.
Predicting over the course of a year is hard, over the next microsecond, not
so much.

Going to the gun range? Your insurance premium just went up by $6/hour. Speed
in your car? Slam on your brakes suddenly? Driving quickly in heavy traffic?
Drive at 3AM on Saturdays?

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tinco
How are hospitals incentivized to prevent disease? I thought it would be the
insurance companies who would do this, but they wouldn't be allowed to as it
would also let them prescreen customers. Perhaps it could be insurance
companies who pay hospitals for being good with disease prevention? There's an
interesting interaction there.

~~~
dredmorbius
Capitation of member lives is one mechanism that's been tried. That's the
theory behind HMOs, though some (notably Kaiser) seem to be markedly more
effective than others.

The story behind how Kaiser healthcare was founded (providing health services
for workers on the Hoover Dam) is pretty interesting.

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saurabhnanda
If they're accurate enough, can they be legally forced to inform the patient
when there's a high probability that the patient will get sick in the future?
You know, "prevention is better than cure"

How long before someone sues a hospital for 'negligence' for knowing the
future and not letting the patient know?

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buttsex
How do they know what specific items were purchased? Is there any way for a
consumer to see their own data on that? Also, seems like there would be a lot
of false positives as I don't consume or use everything I buy with my card.

~~~
esw
They mentioned rewards cards, like the kind used at grocery and drug stores.

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foobarqux
Can insurance companies legally access credit card transactions? Like the fact
that you shopped at a specialty medical store for a pre-existing condition?

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yuhong
I am beginning to think about how well non profit health insurance companies
would work.

~~~
wiredfool
Lots of health insurance companies are technically non-profits. Doesn't change
their behavior. They accumulate huge amounts of excess reserves, and pay their
executives like they're a for profit company.

~~~
yuhong
That is not what I am thinking of, of course.

~~~
inportb
What are you thinking of?

~~~
yuhong
Those that don't do such abuse, obviously.

~~~
malka
I think this[0] is what you are looking for

[0]
[https://en.wikipedia.org/wiki/Health_insurance_cooperative](https://en.wikipedia.org/wiki/Health_insurance_cooperative)

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christop
How can they tell whether I've been buying cigarettes or carrots at the
grocery store?

My credit card statement just shows a store name, timestamp and amount. They'd
presumably have to be colluding with the grocery chains to get the sort of
information mentioned in the article.

~~~
rosser
From TFA, emphasis added: "The company purchases the data from brokers who
cull public records, _store loyalty program transactions_ , and credit card
purchases."

Store loyalty programs _do_ track SKU-level purchases. There was a case years
ago where a patron tripped and fell at a store, and filed a personal injury
suit. The store pulled up that person's loyalty program records, noted that
they'd been purchasing a larger than average amount of alcoholic beverages,
and insinuated at trial that the patron might have been drunk.

Guess who won that case.

~~~
eru
Who won that case?

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jpttsn
I don't understand this. How does my credit card data tell hospitals what I
buy? Personally, I can't get anything beyond a date (dubious accuracy) and the
amount spent.

~~~
uptown
If you buy something at a liquor store, you're likely buying alcohol. If you
buy something at McDonald's, you're likely buying fast food. Do you pay for a
gym membership? Pretty much every store has an itemized list of everything
you're buying - though only some of that is currently exposed to your credit
card processor.

Obviously, some purchases are more obvious than others - but it's safe to
assume that if there's a profit to be made regarding selling more-specific
information about each purchase, then businesses looking to increase their
bottom-line will seek to opt-in to selling that information.

What I expect to see is for it to star as an opt-in choice by consumers. Want
a lower health-insurance rate? Opt-in to this program where we see where
you're eating and if you're going to the gym. You're starting to see it in the
auto-insurance industry where insurers will give you a safe-driver discount
provided the device you attach to your car confirms you're a "safe-driver".
But eventually I'd bet it will be a requirement for auto insurance. They're
pushing to mandate auto "black-boxes" in every car. Right now, that data
requires a court order to obtain in an accident, but how does that change when
every car is connected? Does that data live with the vehicle, or is it sent to
a remote location "for the safety of the data in case of a crash" or whatever
spin they put on it?

Here's the car-dongle I mentioned:
[http://www.progressive.com/auto/snapshot/](http://www.progressive.com/auto/snapshot/)

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ch4s3
I heard some people at a local research hospital speculating about this months
ago... seem pretty bleak.

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igl
Don't use credit cards. Problem Solved \o/

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zobzu
privacy what privacy

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wfjackson
I see a lot of people asking about how they get the data. One way is through
huge data brokers that buy and sell data from retailers, merchants etc. One
big company that has a huge trove of customer purchase information is Acxiom.

[http://en.wikipedia.org/wiki/Acxiom](http://en.wikipedia.org/wiki/Acxiom)

~~~
walterbell
Acxiom is partnered with Facebook/Twitter and owns LiveRamp.

[http://blogs.wsj.com/digits/2014/05/14/data-broker-acxiom-
mo...](http://blogs.wsj.com/digits/2014/05/14/data-broker-acxiom-moves-to-tie-
physical-world-to-online-data/)

"The data-gathering has stirred privacy concerns. The Wall Street Journal
reported in 2010 that Rapleaf, the former parent company of LiveRamp, had
amassed databases tying people’s real names to privately shared information in
their Facebook profiles, as well as data in their voter-registration files,
real-estate titles, shopping histories, and other records. The company was
censured by Facebook for the practice, which involved pulling data from apps
against the social network’s rules."

~~~
bjelkeman-again
It is interesting. In Sweden this would be illegal to do, unless you had
consent from each individual at the time of data collection to do that type of
data assembly and analysis.

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n09n
This seems promising. When it comes to healthcare, prevention is nearly always
more efficient than treatment, and early detection of problems is very
important. If this can be turned into more accurately determining who needs to
be screened for lifestyle-related problems like arteriosclerosis, blood
pressure, diabetes, etc, that would be amazing.

