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Some companies are tracking employee pregnancies. That’s probably less scary than it sounds.

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A Wall Street Journal story sent alarmed ripples through the internet on Wednesday, with tweets flying about how bosses could be sent "alerts" that their employees have stopped using birth control and might be planning an expensive pregnancy.

Turns out, not so much. A more careful read of Rachel Emma Silverman's piece doesn't actually support these claims. And one of the third-party data companies Silverman wrote about told Vox that employers definitely can't get information about individual employees through their service.

If anybody is getting "alerts," it's the employees, and if the bosses are being sent data about employee health, it's not about identifiable individuals.

That said, the piece still raises some serious privacy concerns about the way employers are using "big data" to try to curb health care costs.

What businesses are actually doing, and what they aren't

Silverman reported that some companies, including Walmart, are hiring third-party firms like Castlight Healthcare Inc. to help them reduce their health care costs.

The outside firms do this by collecting data about employees, using it to calculate people's risks of certain health conditions, and sending messages that "nudge" individual employees into making healthier choices that could lower their (and their employer's) health care costs in the long run.

Here's the passage from Silverman's Wall Street Journal article that set off the alarm bells about birth control "alerts":

To determine which employees might soon get pregnant, Castlight recently launched a new product that scans insurance claims to find women who have stopped filling birth-control prescriptions, as well as women who have made fertility-related searches on Castlight’s health app.

That data is matched with the woman’s age, and if applicable, the ages of her children to compute the likelihood of an impending pregnancy, says Jonathan Rende, Castlight’s chief research and development officer. She would then start receiving emails or in-app messages with tips for choosing an obstetrician or other prenatal care. If the algorithm guessed wrong, she could opt out of receiving similar messages.

Out of context, this definitely sounds like some kind of dystopian fertility monitoring system with troubling implications for a woman's job security. Pregnancy discrimination still happens all the time, after all, despite laws against it.

But in context, Silverman notes that employers only see aggregated data, that federal health privacy laws generally prohibit employers from viewing their workers' health data anyway, and that workers can opt out of the health messaging service. And representatives from Castlight told Vox there's no way that data could be traced back to individual employees.

"Employers that use our system never, under any circumstance, see individual employee data from Castlight Action," said Jim Rivas, senior director of corporate communications for Castlight. The data is anonymized and aggregated, he said, and the employer only sees the number of people who are at risk for certain conditions.

Castlight also limits the size of the group that can be displayed — since in a small enough group, it could be easy to guess which employee is at risk for which condition (such as pregnancy). Castlight senior product manager Alka Tandon said bosses won't receive any data for groups smaller than 40 people. That's almost four times as high as the privacy threshold that the Center for Medicare and Medicaid Services recommends, which is 11 people.

So unless a company had more than 40 soon-to-be-pregnant employees and was prepared to cut paid family leave or institute mass layoffs in response (which is still not an inconceivable scenario), the privacy of pregnant women workers who use Castlight is probably pretty safe.

Tandon added that the company uses a "robust" development process that includes testing whether users find the health messages creepy or invasive, or helpful and empowering. Employees also have to actively create an account to use the service in the first place.

Is there still reason to worry?

Frankly, there's something appealing about these "big data" health services. They can help people who don't have a primary care provider find a good in-network doctor, or they can refer employees with back problems to physical therapy before they turn to expensive, possibly unnecessary spinal surgery. Prenatal care is also essential for good maternal and infant health, so alerting pregnant women to their care options actually seems like a great idea.

These services could legitimately help people stay healthier, which would also end up saving companies money. Everybody wins, right?

But there's also something disturbing about how much these third-party firms can know about you, based on not just your health records but also things like your spending habits.

"I bet I could better predict your risk of a heart attack by where you shop and where you eat than by your genome," one consultant told Silverman.

Castlight doesn't use that kind of outside data, Tandon said. But other companies, as Silverman reported, buy information from data brokers that helps connect people's consumer spending habits with their health care usage.

Indiana University law professor Nicolas Terry told Fortune that this space is completely unregulated, and that insurance claims and search queries aren't necessarily protected in the same way as other private health information under federal law.

The whole thing brings to mind how Target creeped out its customers a few years ago by using data mining to send ads for baby products to women who didn't even know they were pregnant yet, or who hadn't yet told their families and had to have an awkward conversation after the mail arrived. But of course the stakes are higher when it's your employer.

Privacy experts also told Silverman that these data-mining efforts carry other huge risks. Sensitive health data could be vulnerable to hacks or breaches, for instance, which could lead to privacy concerns even worse than your boss knowing you're trying to get pregnant.

Read the Wall Street Journal article for more on the subject.

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