Medical Identity Theft and Public Awareness

There are plenty of horror stories out there about how identity theft has resulted in damaged credit ratings and monetary losses of unsuspecting victims. One insidious twist of this particular white collar crime is that many people do not realize they are victims until well after the fact, and it may take years to reinstate one’s reputation and re-establish credit.

That’s why I found the results of a survey on medical identity theft, conducted by the Ponemon Institute (and sponsored by Experian ProtectMyID) so surprising. The second annual survey shows that incidents of medical identity theft are both widespread and on the rise. The report, which was released in March, estimated that 1.49 million Americans experienced medical identity theft, up from 1.42 million the year before. The average cost per incident was $20,663, up from $20,160. The poll questioned 1,672 adults from two independent samples; of the respondents, 633 have experienced identity theft.

One of the key findings is a lack of awareness of the medical identity theft problem on the part of the public. In the general sample, 91 percent of the respondents said they were not aware of the definition of medical identity theft before answering the survey; 70 percent were either not aware or were unsure that medical identity theft could affect their credit scores. Many respondents admitted to serious consequences of the theft, including financial loss, embarrassment, increased insurance coverage or even loss of medical coverage.

Yet nearly 49 percent said they would take no new steps to prevent medical identity theft in the future (29 percent said they would monitor their credit reports and 25 percent said they would review their medical records). On the other hand, many consumers had high expectation on their providers, with 78 percent saying providers should ensure the privacy of their health records. More tellingly, only 26 percent of respondents said they are familiar with the health reform bill passed in 2010 and 32 percent have no knowledge about the bill at all; 79 percent said they were not aware of the initiative to create an electronic database of patient information.

The survey results point to a major disconnect: consumers place a lot of importance on health records privacy, and expect health providers to take precautions. Yet there is a lack of familiarity about healthcare reform and strides taking place to create electronic health records; and uncertainty about just how a national electronic database would affect their personal health information. I see this as an opportunity for the healthcare industry to educate the public, who after all are the main beneficiaries of healthcare reform.