Can Facebook Still Leverage Data to Enter the Health Market?
In early March 2018, Facebook held discussions with Stanford Hospital, the American College of Cardiology, and other leading hospitals and healthcare organizations to explore establishing agreements for sharing medical data, including information on diseases and prescriptions. However, amid a series of data leak scandals, Facebook’s senior management decided in April to halt this data integration initiative.
On March 25, Facebook announced the termination of partnerships with several major data brokers. The data breach dealt a severe blow to Facebook; given the heightened sensitivity of medical data privacy, the company was compelled to reiterate its practices regarding the use of healthcare data.
Subsequently, according to a CNBC report on April 5, Facebook admitted to having dispatched a doctor on a covert mission to request that hospitals share patient data.
Facebook was designed to ensure the long-term availability of user data, which includes the retention of patients’ medical records. However, HIPAA mandates that any professional healthcare institution must use HIPAA-compliant software to transmit protected health information to its patients. Facebook’s aforementioned practices effectively violate the HIPAA regulations.
Consequently, this series of events dealt a severe blow to Facebook’s stock price. Advertising revenue is Facebook’s primary source of profit, and data is critical to the precision of ad targeting.
Even so, the healthcare sector offers substantial profits, making it difficult for Facebook to walk away from this lucrative opportunity. Therefore, VCBeat (WeChat ID: vcbeat) has compiled an overview of Facebook and its affiliated companies’ initiatives in the healthcare space, aiming to glean insights into the strategic approach social media platforms are taking as they enter the healthcare industry.
Facebook has previously focused on four areas: patient communities, genomics, advertising, and blood and organ donation.
As a social media platform, Facebook is inherently an enormous community network. Reuters previously disclosed Facebook’s plans to establish patient communities, but this initiative has yet to be implemented, with the primary obstacle remaining the patient data privacy provisions under HIPAA.
Researchers at the University of Michigan have developed a Facebook application called “Genes for Good” to support a genetic testing initiative. The application is designed to help individuals understand the relationship between their genotypes and daily lifestyle habits.
To address the challenge of precisely targeting medical advertisements while avoiding litigation risks associated with data misuse, Facebook has held discussions with hospitals. Facebook attempted to match medical data with anonymized personal data to circumvent the legal issues arising from direct data referencing.
Facebook could determine that an elderly user may have few local friends and require nursing care by analyzing their address, interpersonal relationship data, and recent healthcare service utilization. However, CNBC argues that this still constitutes a significant invasion of privacy.
Therefore, social media’s foray into the healthcare sector may not be a sound strategy. However, we might glean insights into Facebook’s investment philosophy by examining the Chan Zuckerberg Initiative, founded by Mark Zuckerberg and his wife, Priscilla Chan.
Mark Zuckerberg’s wife, Priscilla Chan, studied biology at Harvard University and then pursued advanced training at the University of California, San Francisco (UCSF) Medical Center. Chan is now a pediatrician.
Priscilla Chan (Image source: Baidu Baike)
In December 2015, the Zuckerbergs founded the Chan Zuckerberg Initiative. In September 2016, the couple invested $3 billion in the organization and assembled a “dream team” to jointly advance basic scientific research.
This organization has decided to support a foundational science project with the potential to disrupt the field of medicine in the future—the Human Cell Atlas (HCA). This project aims to comprehensively characterize every cell in the human body, including cell types, quantities, locations, relationships, and molecular composition, serving as a reference map to advance biomedical science.
For the trillions of cells that make up the human body, we do not know how many cell types exist, nor do we know their exact quantities, locations, molecular compositions, and spatial relationships within tissues and organs. The Human Cell Atlas (HCA) will provide 3D maps of the cellular composition of human tissues, elucidate the connectivity of all human body systems, chart dynamic changes in these maps, and deeply explore the relationship between cells and disease. In the future, the HCA will fundamentally improve physicians’ and researchers’ understanding, diagnosis, and treatment of diseases.
In addition to funding experimental scientists engaged in Human Cell Atlas (HCA) work, the Chan Zuckerberg Initiative also supports external collaborators and an internal team of software engineers and computational biologists, focusing on the development of new data platforms and tools for biomedical science. Technology development and theoretical research are often separated, with technology development frequently prioritized; this represents an opportunity to advance theoretical research.
To foster creativity, the foundation plans to support individuals seeking to innovate in new fields, particularly young researchers who lack funding. Most scientists produce their most creative work during the early stages of their careers. However, at this stage, it is difficult to secure funding unless one can demonstrate mastery in a specific field.
The Chan Zuckerberg Initiative can take on more risk to fill this gap. Disease-related fields are often the most difficult for innovators with novel ideas to enter, so the foundation aims to provide greater opportunities for those with promising concepts.
The Hereditary Disease Foundation (for Huntington’s disease) and the Simons Foundation Autism Research Initiative are exemplars in this field, but Chan believes they have the capacity to examine diseases from a broader perspective, rather than focusing solely on patients with epilepsy or autism.
The Foundation allocates a portion of its funds to support the development of GitHub, an open-source project platform, for software development by the “Data Coordination” department; it also provides support to external organizations that facilitate information flow, such as websites and magazines.
Similar to Facebook, Baidu delivers targeted advertisements to users by analyzing their behavioral patterns and page views. Since 2012, Baidu has developed seven healthcare-related segments: Baidu Medical Brain, Baidu Doctor, Thumb Doctor, Baidu Health, Baidu Medicine, Dulife (smart wristband), and Baidu Direct Account.
According to estimates in a JPMorgan Chase report, healthcare-related advertising accounts for approximately 15%–25% of Baidu’s total annual revenue. Based on Baidu’s 2015 annual sales performance of RMB 66.3 billion, healthcare advertising contributed more than RMB 10 billion to the company’s revenue.
However, Baidu was also affected by the “Wei Zexi incident,” with its second-quarter revenue forecast lowered from RMB 20.11–20.58 billion (USD 3.12–3.19 billion) to RMB 18.1–18.2 billion (USD 2.81–2.82 billion), representing a reduction of approximately RMB 2 billion (USD 300 million), or nearly 10%.
Following the data breach crisis, Facebook’s stock price cumulatively fell by more than 12% over the course of a month. Although Facebook had recovered its losses by late April, the resulting volatility remains significant.
In April 2018, some experts in the United States discussed whether Facebook should enter the healthcare sector.
Dan Gebremedhin, a physician and health investor at Flare Capital Partners, stated: “Facebook’s plan to integrate health data to ‘help patients’ is highly questionable. Given the variability of user activity on Facebook, such data may be inaccurate. Rather than genuinely helping consumers, Facebook is merely acting as a platform for manufacturers to promote medical products.”
Fred Steotter, Chief Technology Officer at CareSet Systems, and a health data expert argue that “patients will voluntarily share their medical information on Facebook, as sharing health information within families can help them better prevent diseases. Collaborating with hospitals to share medical and social media data maximizes the value of such data, rather than simply letting it remain stored in the cloud or on hard drives.”
Even if it cannot directly enter the healthcare sector, Facebook can still integrate into people’s lives through other avenues, with the Chan Zuckerberg Initiative serving as an excellent example.
The ultimate test of how to maximize the utilization of data information lies with regulatory authorities. If a reasonable framework can be established to properly plan the use of health information and gain public acceptance, then media outlets’ use of social data will yield positive economic and social benefits.