If medical institutions must establish personal medical data transmission systems under the revised Medical Service Act, the government should directly or indirectly support the cost, a parliamentary report said.

More specifically, based on the financial industry's use of financial data that has already been legislated, the report estimated that about 14 billion won ($10.7 million) should be spent on building a data transmission system for related organizations, about 200 million won per year on its operation, and about 900 million won per year on maintenance.

Kim Hyeong-jin and Kim Ju-kyeong, legislative researchers at the National Assembly Research Office, analyzed the “Medical Service Act Amendment Bill” introduced by Rep. Kang Ki-yoon of the People Power Party in May 2023 in the “Legislative Impact Analysis and Planning Report.”

The current Medical Service Act prohibits the provision of medical information to third parties in principle.

However, the revision bill aims to allow medical data subjects to request medical institutions and pharmacies to transmit personal medical data about themselves to organizations that use personal medical data.

The amendment allows personal medical data to be transmitted to a personal medical data-using organization at the initiative of the medical data subject, providing the basis for the government's “My Data” policy.

"My Data" refers to a service that allows individuals to collect their personal information scattered in various places and manage and utilize it in an integrated manner.

Against this backdrop, the National Assembly Research Service analyzed that the amendment will positively impact data subjects' control over their personal information.

Government should support establishing data transmission system between medical institutions

For example, with the introduction of the amendment, it is expected that data subjects can transfer medical information, such as CT and MRI taken at a specific medical institution, to other medical institutions for utilization at their initiative. The report said it would improve the status of data subjects and alleviate the power imbalance between large medical organizations and data subjects.

The new system aims to transmit medical data between medical institutions and data utilization organizations. However, it was noted that public administration costs may be incurred if the relevant administrative agencies support, manage, and supervise it for smooth data transmission between institutions.

In particular, medical institutions need direct and indirect support from the relevant administrative agencies to establish a system for medical data transmission, and there is a risk of data leakage or hacking in the process of transmitting medical information. So, management and supervision by the relevant administrative agencies are also necessary to prevent this.

The parliamentary think tank said that it is difficult to calculate administrative costs accurately at this point. However, in the case of financial My Data, a similar system, it was confirmed to cost about 14 billion won to establish a system that supports data transmission by related organizations and about 910 million won per year to maintain it.

Sharing and distributing medical data promote development of various industries

From the perspective of the economic and industrial sectors, the amendment is expected to promote the development of various industries based on healthcare data. Related areas include developing personalized medical services, new drugs, medical devices, and disease diagnosis and prediction technologies.

"Medical My Data is expected to bring significant economic ripple effects in the healthcare data industry," the report said, "In particular, there is an analysis that Korea has accumulated a vast amount of healthcare data and can contribute to revitalizing the healthcare industry through the utilization of medical data."

However, the agency pointed out that the obligation for medical institutions to transmit and transfer some of their medical data to third parties may act as a burden. In the case of financial data transmission, it costs an average of about 190 million won per year for individual financial institutions to establish and operate a data transmission system.

It then pointed out that this cost burden may ultimately be passed on to medical consumers, adding that when introducing the amendment, relevant administrative agencies should reduce the burden on medical institutions by supporting data transmission and reception.

Medical data generation should benefit for medical institutions

Besides, the report noted that the medical data-sharing obligation may reduce the incentive for medical organizations to invest in medical data.

Medical data is judgmental information that presupposes advanced medical knowledge, such as medical treatment and diagnosis, and medical institutions require significant investment and effort to collect and manage it. So, the report noted an expectation of monopoly profits on the results.

In this situation, forcing medical data to be shared may disincentivize investment in collecting and managing medical data, resulting in a decrease in medical consumer welfare.

Therefore, the agency said that when determining the specific scope of medical data to be transmitted, it is necessary to protect the interests of medical organizations by appropriately adjusting the scope of the data to be transmitted.

Medical data sharing reduces medical costs

In the public health sector, medical data sharing can reduce medical costs.

If medical data is shared between medical institutions, it is expected to reduce medical expenses by preventing medical expenses due to duplicate tests when patients change medical institutions.

The report said that the European Union (EU) has estimated that the medical data transfer and sharing system will have an economic impact of about 5.6 billion euros (about 8.69 trillion won) by reducing the cost of duplicated tests for healthcare providers.

However, when introducing the amendment, it said there are concerns about leakage and misuse of personal information as a side effect of activating the distribution of personal information, calling for the need to prepare for this.

In conclusion, the report suggested that "a post-legislative impact analysis should be conducted about five years after the introduction of the amendment, considering that the system is scheduled to be expanded and implemented in stages in the future (if the National Assembly passes the amendment) and that visible effects are expected to appear after some time."

The report added that indicators for measuring the post-analysis should include the degree of growth of related industries, healthcare providers' sense of efficacy, costs incurred in the implementation process, and cases of privacy violations in the data transmission process.