New Businesses Built Upon Government Data Will Transform Health Care, Education, and More

What's to come?
Sept. 10 2012 2:30 PM

Here Comes the Data Economy

New companies are creating services using government data on health care, education, and more.

(Continued from Page 1)

BrightScope is a notable example of what dogged persistence can create. The California startup made a profitable business using government data to help the American people understand the fees associated with their 401(k)s. Last May, BrightScope went further, launching financial adviser pages based on open government data from the Securities and Exchange Commission and the Financial Industry Regulatory Authority, the largest independent securities regulator in the United States. Previously, financial adviser profiles could only be found through exact queries at an obscure URL on the regulators' websites. Now, information that citizens care about—the records of financial advisers in their geographic region—is available where they're looking for it: in search engine results.

Just as labor and regulatory data fuels BrightScope's business, there's an expanding number of startups that are tapping into other data released so-called “smart disclosure” initiatives. Smart disclosure is when a private company or government agency provides a person with periodic access to his or her own data in open formats that enable them to easily put the information to use. Startups like Billshrink.com and Hello Wallet are already using a combination of private sector and public sector data to enhance consumer finance decisions. The success of such consumer finance startups suggests an important lesson: The most successful apps and services will combine government, industry, and user-generated data.

The key open data story to watch in the federal government, however, centers on health care. McKinsey and Associates estimates the annual economic value of big, open liquid health data at about $350 billion annually. The explosion of mHealth apps are just the beginning of the disruption in health care from open health data. The effort to revolutionize the health care industry by making health data as useful as weather data is still in its infancy—but the early results are promising. iTriage, which was acquired by Aetna, is enabling people to make better mobile health care decisions where and when they need to do so. It uses a combination of government and private sector data to evaluable symptoms or conditions and point users to nearby medical care. Another startup, Castlight, is analyzing health care data to empower patients, acting like Kayak.com for those who want more transparency about costs. In May, Castlight completed a $100 million round of financing.

Advertisement

But for these sorts of initiatives to take off, entrepreneurs and regulators will have to work together to get contextual consent right and inform patients about the reuse of their data. Transparency is crucial to building a health data commons and thriving startup ecosytem based upon it.

If that balance can be struck, there's considerable potential for entrepreneurs to create better civic interfaces for many digital services. If open government data have helped build new tools, open data disclosed by private companies could create even more value for citizens. But currently, few businesses release anonymized data in an open, usable format. It will soon be time for the government to step in, convene stakeholders, and answer some key questions: How can we create uniform standards that will allow entrepreneurs and developers to innovate? When should data be licensed? Most of the big data releases we have seen come from finance, with bank records or stock trades. But there are significant opportunities to help both entrepreneurs and empowered consumers in health care, energy, education, and telecommunications, to name just a few.

Just as the glowing blue dot on the maps in our smartphone screens revolutionized how we navigate the world, similar "blue dots" could emerge for health care, finance, energy, and any product or service that is regulated or cataloged by government and industry. First, however, they'll need to open the data.

Alexander B. Howard is a D.C.-based journalist who writes about the intersection of government, technology, and society. Follow him on Twitter.

  Slate Plus
Slate Picks
Dec. 19 2014 4:15 PM What Happened at Slate This Week? Staff writer Lily Hay Newman shares what stories intrigued her at the magazine this week.