Why Your Health Insurance Data Should Be Liberated

In a world where you can access nearly all human knowledge from a device in your pocket, it’s absurd that you still can’t find out how much having a baby will cost you. But it’s not surprising. “Health data” is such a hot topic these days that you’d think it was a recent invention, and in many cases you’d be right. Apple AAPL +1.97%’s HealthKit and other trackers passively gather exabytes of our health data as we move around. Saliva samples let us explore genetic conditions. A handful of companies can discover the bugs living inside our guts.

Looking at these new forms of data is exciting, but decades worth of existing health data could provide value—if only it weren’t such a disappointing mess. A prime example is health insurance claims, which tell a rich story of diagnosis patterns, doctors’ practices and billing negotiations—in short, a goldmine that could help millions of Americans make more informed healthcare decisions about where to get care and how much they should expect to pay. Yet these claims remained locked within a black box, accessible to doctors and payers but not us, the patients.

Digital health innovators have overlooked health insurance claims. Why? It’s largely due to how claims are created and processed, and the lack of incentives for changing the status quo. Examining these challenges can help us identify what’s blocking our path—and how we can change course. When we visit a doctor or pick up a prescription, we leave behind a digital paper trail. Twenty years before electronic health records became the norm, healthcare events were digitized through insurance claims and medical bills because it meant getting paid faster...