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The Digital Skeptic: Security Leaks Flatline e-Health Care

NEW YORK (TheStreet) -- Greg Porter has this frightening diagnosis for e-health care investors: The digital diseases of piracy and commodification of information that have debilitated the music, publishing and financial services industries have infected their field as well.

"The theft of protected, personal health information has never been higher," he told me in a brutally frank phone call on the sad health of digital patient data.

Porter is no quack. He's the founder of Allegheny Digital, a small Pittsburgh information security company, and an adjunct faculty member at Carnegie Mellon University, where he pioneered the curriculum on information security in the health care industry.


"I'm trying to let anyone within earshot know about this," he said. The trouble is, few in the industry appear to be listening.

A stunning 21 million health care records have been compromised since the fall of 2009; that's when the U.S. Department of Health and Human Services began keeping track. The agency goes as far as to post these breaches on an agency website "Wall of Shame." Last year, the Utah Department of Health alone inadvertently exposed some 780,000 patient records.

"You almost become numb to it after a while," he said. "You wonder, 'Does it matter? Does the public care?'"

A healthy health care market?
Investors need not bother with med school to learn that health care in the U.S. has belligerently resisted the digital age. Most experts I spoke say it's roughly a decade behind the leading edge of information age.

But like it or not, health care is going digital. The sector is undergoing a shock-treatment regimen of federal mandates such as the Patient Protection and Affordable Care Act and stimulus enticements from the American Recovery and Reinvestment Act.

And investors and blue chip companies are rushing to cash in.


Behemoths such as Dublin, Ohio-based Cardinal Health have been pushing electronic health care solutions with consulting services for small practices. New York-based start-up ZocDoc claims 2.5 million users -- and Jeff Bezos as an investor. Just last week, Boston-based QPID, an electronic medical records search tool to help doctors pre-screen patients, announced it had raised $4 million from Boston-based Partners Innovation Fund and Matrix Partners.

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