18 Apr. 2025

DPDP Act: Triggering a Healthcare Growth Spurt

Author: Dr Pankaj Gupta, BDS, MBA, PGDCA

Evolution of regulatory frameworks has always been an interesting bellwether for growth phases in businesses. This is however not obvious to those stakeholders, who take a short and transactional perspective of their business and have their eyes focused on the rearview mirror.

Increasing regulation and compliance is an indication that governance is anticipating a particular business, being about to experience the next order of growth; much like masterplans for cities that investors see opportunities for windfall gains in.

Businesses that are data enabled are currently experiencing this phase with the Digital Personal Data Protection Act (DPDP Act) which is maturing.

The Healthcare Context

Healthcare is increasingly data driven with a lot of diagnostic, clinical and health financing aspects increasingly pivoting on data;  and technology driven innovation continuously increasing the data component of healthcare.

Thus, the Indian healthcare sector is witnessing a significant shift in the form of a digital transformation. This is driven by a confluence of factors including the need for a more seamless care continuum driven by growing patient expectations in public and private healthcare systems, and the government’s ambitious digital health initiatives based on the need to ensure healthy and productive populations. This transformation necessitates a robust data governance framework to ensure patient privacy, data security, and interoperability.

As an act of stewardship, the government has been proactively evolving the regulatory guardrails and standards that are essential for transformative growth.

The National Digital Health Blueprint (NDHB) and the Ayushman Bharat Digital Mission (ABDM) laid the groundwork, and now the Digital Personal Data Protection Act (DPDP Act) is accelerating the development of a seamless and integrated digital health ecosystem, fueling a significant growth spurt in the sector.

Notably, the ABDM data management policy has been explicitly stated to be in alignment with the requirements of the DPDP Act. This underscores the importance of adhering to both frameworks for all healthcare organizations seeking to stay relevant and access growth opportunities.

Key Considerations for Compliance:

  • Data Privacy and Security: The DPDP Act mandates stringent data privacy and security measures, which are further reinforced by the ABDM data management policy. Non-compliance can lead to significant penalties, including fines from INR 50 crores up to INR 250 crores. Healthcare organizations must prioritize the protection of Protected Health Information (PHI) and Personally Identifiable Information (PII). This includes implementing robust security measures such as encryption, access controls, and regular audits.

  • Data Governance: A robust data governance framework is crucial for compliance with both the DPDP Act and the ABDM policy. This includes establishing clear data ownership, access, and usage policies, as well as implementing data quality checks and ensuring data integrity.

  • Audit Trails: Maintaining comprehensive audit trails is essential to track data access, modifications, and usage. Audit trails provide valuable insights into data breaches and help organizations demonstrate compliance with both regulatory frameworks.

  • Interoperability: Healthcare organizations must ensure that their systems and data are interoperable with the national digital health ecosystem as outlined by ABDM. This will enable seamless data exchange between different stakeholders, such as doctors, hospitals, and insurance companies.

  • Patient Consent: Obtaining informed consent from patients is paramount. Healthcare organizations must clearly communicate how patient data will be collected, used, and shared, and obtain explicit consent before processing any personal data, aligning with the patient-centric approach of both the DPDP Act and the ABDM policy.

Data Ownership and Fiduciary Responsibility:

A key aspect of both the DPDP Act and the ABDM policy is the recognition of the patient as the owner of their health data. Healthcare organizations act as fiduciaries, meaning they have a legal and ethical obligation to protect and responsibly manage patient data on their behalf. Breach of this fiduciary duty can result in severe penalties under the DPDP Act. This fiduciary responsibility includes:

  • Transparency: Clearly communicating data collection, usage, and sharing practices to patients.

  • Security: Implementing robust security measures to protect patient data from unauthorized access, use, disclosure, disruption, modification, or destruction.

  • Accountability: Being accountable for any breaches of patient data security or misuse of patient information.

  • Data Minimization: Collecting only the necessary data for the intended purpose and avoiding excessive data collection.

  • Purpose and Duration Limitation: Using patient data only for the purposes and the duration for which it was collected and the consent was obtained.

Challenges and Opportunities

The transition to a digital health landscape presents both challenges and opportunities for healthcare organizations in India

Challenges:

  • Technological Infrastructure: Investing in robust technological infrastructure and upgrading existing systems can be a significant challenge for some organizations. Digital-First, Cloud-First, Mobile-First infrastructure design lends itself very well to these compliances.

  • Data Security: Ensuring the security of sensitive patient data in a digital environment requires continuous vigilance and robust cybersecurity measures. Failure to do so can result in hefty fines and reputational damage.

  • Compliance: Navigating the complex regulatory landscape and ensuring compliance with the DPDP Act, the ABDM data management policy, and other relevant regulations can be overwhelming.

Opportunities:

  • Improved Patient Care: Digital health technologies can improve patient outcomes by facilitating better diagnosis, treatment, and care coordination.

  • Increased Efficiency: Automation and data-driven insights can streamline administrative processes and improve operational efficiency.

  • Enhanced Access to Healthcare: Digital health solutions can improve access to quality healthcare for underserved populations.

Conclusion

The digital transformation of the Indian healthcare sector is inevitable. However, it is crucial for healthcare organizations to understand the significant legal and financial risks associated with non-compliance with the DPDP Act.

By fully embracing the principles of the NDHB and ABDM, adhering to the ABDM data management policy, and prioritizing data privacy and security, these organizations can not only ensure compliance with all relevant regulations but also unlock the full potential of digital health to improve patient care and transform their businesses and the healthcare sector in India.

Proactive and robust data protection measures are not just a compliance requirement, but a strategic imperative for long-term success in the evolving digital health landscape.

This article aims to provide a comprehensive overview of the key considerations for healthcare organizations in India as they navigate the evolving digital health landscape. By aligning with the NDHB, ABDM, and the DPDP Act, and by prioritizing data privacy and security, these organizations can not only ensure compliance with all relevant regulations but also unlock the full potential of digital health to improve patient care and transform the healthcare sector in India.

Disclaimer: This article provides a general overview of the topic. This article is for informational purposes only and does not constitute legal or professional advice. The specific requirements and guidelines may vary depending on the individual circumstances of each healthcare organization. Any errors or omissions are sheerly coincidental and totally unintended.

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