Better Off ... Maybe

Over the past few weeks there has been a lot of scary news about security breaches involving personal information - including the hijacking of Paris Hilton's cell phone speed-dial list, the theft of at least 145,000 ChoicePoint customer profiles by a criminal identity-theft ring and Bank of America's loss of computer data tapes containing information about 1.2 million federal employees (including their names, Social Security numbers, addresses and account numbers for SmartPay travel cards administered by the bank). It seems that there is no keeping ahead of crooks, social misfits, bored teenagers or anyone else determined to rip off the public and government, cause mischief or both.

So it is interesting to learn from a new nationwide Harris Poll that, when it comes to uses of their personal medical information, people are actually more confident than they were a decade ago - when identity theft certainly existed but was far from the global high-tech industry it is today. A previous survey conducted in 1993 reported that 27 percent of U.S. adults believed that their personal medical information had been released improperly in the previous three years, but in the new survey, which was conducted last month, only 14 percent of respondents said they believed this had happened. In both surveys, health insurers were viewed as the leading culprits when information was released improperly - by 15 percent of respondents in 1993 and by 8 percent in 2005 (so at least a smaller percentage of respondents mistrust their insurers).

Evidently, HIPAA is having a positive effect, at least in terms of consumers' attitudes. Two-thirds of adults surveyed reported having received one of the new health privacy notices mandated by HIPAA, and these people reported that their confidence that their personal medical information is being handled properly has increased a great deal (23 percent) or somewhat (44 percent).

At the risk of being considered horribly cynical, I have to wonder if this confidence is completely justified. While data security-related expenditures rank high on most insurers' IT budget priorities lists, how many carriers really are prepared to prevent a ChoicePoint- or BofA-like incident? It takes more than a promise to protect critical information - just ask Paris Hilton.

Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio