Reprinted with permission from Banking.com
The level of hype surrounding wearable technology almost seems undeserved, particularly given the relative lack of adoption. Sure, there are cool new devices emerging on a regular basis, the early adopters are like kids in a candy store, and it’s already had a big effect in activities like fitness. But for a discipline that’s actually been around for quite a while—an eternity in tech time—it’s surprising how few people have embraced the new capabilities.
In this context, here’s a new twist: What if you had no choice but to wear one or more of these devices all the time? What if avoiding them put you and your family in financial peril?
Yes, it’s a valid concern. In fact, it’s likely to become more valid as these capabilities become more widespread.
Here’s the reality: Many of these devices serve up an astonishing amount of personal data, particularly related to health issues. While consumers like knowing how much they walk or how many calories arrived via that burger-and-fries combo, those same devices also monitor blood pressure, heart rate, exercise routines, sleep patterns and so on. Some gadgets can even detect health conditions such as diabetes and glaucoma, and of course, how those diseases are being treated.
However, doctors and their patients are not the only ones interested in those details. So are insurers.
The insurance industry obviously wants to gather every bit of information on an individual before offering a policy. Many offer discounts for transitioning toward a healthier lifestyle, and they want proof of that happening. Now, since they can get all this information in practically real time, why wouldn’t they make it a pre-requisite?
The topic is already generating considerable debate in Switzerland, home to many trends in insurance. Hanspeter Thür, the nation’s official data protection commissioner, recently attended a panel discussion on the new capabilities emerging through the adoption of wearable technologies, and used the occasion to sound the alarm on potential abuse (if it can even be called that). He warned that if this trend continues, it could potentially lead to discrimination against those who opt against wearables.
Nothing says ‘futuristic’ like individuals clad in computers, and we’ve all seen these scenarios play out in movies. But this is real, and it’s now—if individuals refuse on principle to wear devices that send out every kind of health information to their insurers, could those companies then refuse to grant health or life insurance policies?
What we now call HIPAA (the Health Insurance Portability and Accountability Act) was supposed to cover all this, and indeed a core component of the sweeping legislation did establish national standards for electronic health care transactions. That’s great, but this was back in 1996, when the Internet had just entered the mainstream and even having a website seemed like a novelty. This is a very different world we’re in now.
It’s easy to see the merit in both arguments. It seems downright cruel to force people to constantly wear a bracelet or hook themselves up every night to health-tracking devices, just so that very private information can be sent out to faceless monitors at locations around the world working for giant insurance corporations. At the same time, it’s understandable that those companies want all the information they can get when making decisions on what kind of health and life insurance policies to offer.
New technologies often pose this kind of risk—we get more capabilities but give up more privacy in the process. Many mobile apps, for example, quite legally acquire information on our daily habits: what we search for, who we communicate with, how we make buying decisions. Wearable technologies simply lead us further down that road.
The real question is what we can do about it. One obvious answer is for the government to step in, and if HIPAA already seems burdensome, imagine what more regulations covering all the new capabilities will look like. On the other hand, it’s always possible that industry associations—both on the technology and insurance sides—will come together to create comprehensive standards that make sense for all parties.