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Data Encryption in Healthcare: Importance, Benefits & Use Cases

Healthcare has recently become one of the most data-intensive industries, with patient information being generated and stored in vast quantities.1 However, this wealth of data also comes with a significant responsibility to protect patients’ sensitive and personal information. In 2021, more than 40 million patient records were compromised, and data breaches can have severe consequences for patients and healthcare providers.2  

Moreover, hospitals and health insurance companies rank lower in customer satisfaction than other industries due to a lack of transparency, dissatisfaction, and bad customer service quality.

Data encryption has become a critical component of healthcare data security to mitigate the risk of data breaches. This article will explore the importance of data encryption in healthcare, facts, and top encryption practices in the healthcare industry.

What is healthcare data encryption?

Data encryption in healthcare refers to converting sensitive and confidential patient data into a coded language that can only be accessed by authorized individuals with a decryption key. This means that even if an unauthorized person gains access to the encrypted data, they cannot read or use it without the appropriate key. 

To see the full definition, use cases, and best practices of data encryption, look at our comprehensive article “In-Depth Guide to Data Encryption in 2023”

What is the importance of data encryption in healthcare?

Approximately 30% of the world’s data volume is generated by the healthcare industry.3 Healthcare providers and business partners must maintain patient privacy and adhere to HIPAA and other legal obligations, such as the EU’s General Data Protection Regulation (GDPR). Encryption is a critical component of such data security in the healthcare industry. 

By implementing robust encryption methods, healthcare organizations can 

  • Protect patient data
  • Comply with regulations
  • Mitigate the risk of costly data breaches
  • Enable secure data sharing.

HIPAA, ePHI, and data encryption

Health Insurance Portability and Accountability Act (HIPAA) regulations require healthcare organizations to implement appropriate safeguards to protect the confidentiality, integrity, and availability of electronic protected health information (ePHI). Data encryption is one of the methods that healthcare organizations can use to protect ePHI and comply with HIPAA regulation.

The HIPAA Security Rule requires healthcare organizations to implement technical safeguards to protect ePHI, including encryption. Specifically, the Security Rule requires healthcare organizations to implement a mechanism to encrypt and decrypt ePHI when it is stored or transmitted.4 The encryption method should be consistent with the National Institute of Standards and Technology (NIST) standards for encryption and should be implemented by the organization’s risk analysis and risk management processes.

The use of data encryption can help to protect ePHI from unauthorized access, use, and disclosure. Encryption can protect ePHI stored on electronic devices, such as laptops and mobile devices, and ePHI transmitted over networks, such as email and messaging systems. The use of encryption can also help healthcare organizations to comply with the HIPAA Breach Notification Rule, which requires organizations to provide notice to affected individuals in the event of a breach of unsecured ePHI.5

1- Protecting sensitive patient information

Healthcare organizations handle and store sensitive patient data, including 

  • personal information
  • medical records financial data 

If sensitive information falls into the wrong hands, it can lead to identity theft, financial fraud, or medical fraud. Encryption helps to protect this data from unauthorized access, ensuring that patient privacy is maintained.

2-Compliance with regulations

Healthcare organizations must comply with various regulations and standards, including the Health Insurance Portability and Accountability Act (HIPAA). These regulations mandate that healthcare providers implement security measures, including data encryption, to protect patient information. Failure to comply can result in significant fines and legal penalties.

3-Mitigating the risk of data breaches

Data breaches can have severe consequences for healthcare organizations, including 

  • Damage to brand reputation
  • oss of revenue
  • Legal liability. 

Encryption helps to mitigate the risk of data breaches by making it more difficult for hackers to access sensitive information.

4-Enabling secure data sharing

Healthcare providers often need to share patient information with other healthcare organizations or patients. Encryption helps to ensure that this information is shared securely without the risk of unauthorized access or data breaches.

Top 5 use cases of data encryption in healthcare

1- Electronic health records (EHRs)

EHRs are designed to improve healthcare delivery’s quality, safety, and efficiency. They allow healthcare providers to access patient information quickly and easily, regardless of the patient’s location. This makes it easier for healthcare providers to make informed decisions about patient care, avoid errors due to incomplete or incorrect information, and ensure that patients receive the appropriate treatments. (See Figure 1)

Source: Science Direct6

Figure 1: Electronic Health Record

2- Medical devices 

More medical equipment is being connected to the internet and other networks, including insulin pumps and pacemakers. Encrypting data can help to secure what is transmitted between these devices and other systems, ensuring that patient information is protected from unauthorized access.

3- Remote patient monitoring (RPM)

Remote patient monitoring (RPM) involves using technology to monitor patients’ health remotely. RPM is a healthcare delivery model that uses technology to monitor patients’ health remotely. RPM enables healthcare providers to track patients’ vital signs, symptoms, and other health data outside of traditional healthcare settings, such as hospitals and clinics. 

RPM typically involves wearable devices, sensors, or mobile applications to collect and transmit data to healthcare providers. The collected data can include various patient health information, such as blood pressure, heart rate, blood sugar levels, and medication adherence.(See Figure 2). Encryption can be used to protect sensitive data that is transmitted between patients and healthcare providers, ensuring that patient privacy is maintained.

Source: IDTechEx 7

Figure 2: Remote Patient Monitoring 


Telehealth, also known as telemedicine, allows patients to receive medical care, consultancy, and support from healthcare providers without the need to visit a physical clinic or hospital. Telehealth services can be delivered through various technologies, such as video conferencing, remote monitoring, mobile health apps, and messaging platforms. After the COVID-19 pandemic, Telehealth’s significance in the healthcare industry has grown(See Figure 3)

Source: Siemens8

Figure 3: Telehealth Before, During, and After the Pandemic

These technologies allow patients to communicate with their healthcare providers in real-time, share health information, and receive remote diagnosis and treatment. Encryption can help protect the data transmitted during telehealth sessions, ensuring that patient information remains confidential and secure.

5- Healthcare data analytics

Healthcare data analytics analyzes and interprets large sets of healthcare data to extract meaningful insights and inform decision-making. It involves using statistical and computational techniques to identify patterns and trends in healthcare data and to draw conclusions about patient outcomes, population health, and healthcare delivery. 

Healthcare organizations increasingly use data analytics to gain insights into patient health and healthcare operations. Encryption can help to protect this data from unauthorized access, ensuring that patient privacy is maintained.

For further reading, check our articles:

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Cem Dilmegani
Principal Analyst
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Altay Ataman
Altay is an industry analyst at AIMultiple. He has background in international political economy, multilateral organizations, development cooperation, global politics, and data analysis. He has experience working at private and government institutions. Altay discovered his interest for emerging tech after seeing its wide use of area in several sectors and acknowledging its importance for the future. He received his bachelor's degree in Political Science and Public Administration from Bilkent University and he received his master's degree in International Politics from KU Leuven .

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