Large sets of health data can enable innovation and quality measurement but can also create technical challenges and privacy risks. When entities such as health plans and health care providers handle personal health information, they are often subject to data privacy regulation. But amid a flood of new forms of health data, some third parties have figured out ways to avoid some data privacy laws, developing what we call “shadow health records”—collections of health data outside the health system that provide detailed pictures of individual health—that allow both innovative research and commercial targeting despite data privacy rules.

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