The Data Dilemma: How Data Privacy Laws Shape Medical AI Development in the United States and China

Abstract

This thesis evaluates how differing data privacy regulations in the United States and China shape the development of AI models in the healthcare industry. Data, a key input in the training and creation of AI tools in the healthcare industry, is heavily regulated due to the sensitivity of private patient information. A comparison of the US’s HIPAA and China’s PIPL regulations shows how data privacy laws shape medical AI development for private firms and institutions. This thesis examines whether China’s lenient data privacy laws give Chinese entities an advantage through greater access to sensitive patient data. Furthermore, this thesis argues that data access is only one factor in AI model development in the healthcare industry as US firms remain competitive in the industry due to advantages in computing power, funding opportunities, and market structure. China’s flexibility surrounding data privacy disclosure and the United States’ concern for individual privacy protection is highlighted by a comparison of HIPAA and PIPL regulations. Case studies of AI tools created in the Genomics and Diagnostics sectors show how privacy regulations in each country shaped the creation of AI models by different private firms and research institutions. The analysis argues that, while data access and scale is an important factor in the creation of AI tools in the healthcare industry, it is only one of many factors that allows firms and research institutions to effectively build AI models. This study suggests that US policymakers should keep patient privacy and protection at the forefront of HIPAA and healthcare data regulations because research exemptions have the potential to create ethical and privacy risks for patients. This study provides evidence that innovation in the healthcare AI industry is achievable without exposing patients and their personal health information, and shows how each country uses regulatory differences to its advantage and will continue to create AI tools that enhance patient care worldwide.