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HIPAA, PHI, and PII Considerations When Building Digital Products

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In today’s interconnected world, there has been a higher demand for innovative health technology solutions to support better patient care and user experiences. This has made it increasingly important for developers to prioritize privacy and security in their digital products.

The Health Insurance Portability and Accountability Act (HIPAA) plays a critical role in ensuring data privacy within the healthcare sector. Due to this fact, there are specific considerations and potential consequences that should be considered when ensuring compliance with these protocols to keep Protected Health Information (PHI) and Personally Identifiable Information (PII) safe within the digital space.

Understanding Key Terms and Concepts

When working with large amounts of data, developers and the organizations they work for should have a clear understanding of specific terms and concepts related to HIPAA, PHI, and PII.

HIPAA (Health Insurance Portability and Accountability Act)

HIPAA is a US law designed to safeguard the privacy and security of patient healthcare information. The law is divided into two main sections: the Privacy Rule, which governs the use and disclosure of personal health information, and the Security Rule, which governs the protection of electronic PHI. 

PHI (Protected Health Information)

Protected Health Information (PHI) refers to any information that can be used to identify an individual’s health status or medical history. This includes information such as patient names, addresses, dates of birth, Social Security numbers, medical records, and payment information.

Examples of PHI include:

  • Electronic patient health records
  • Billing and payment information
  • Insurance information
  • Physician notes and reports
  • Diagnostic test results

PII (Personally Identifiable Information)

PII refers to any information that can be used to identify an individual. Examples of PII include full name, date of birth, Social Security number, email address, phone number, driver’s license number, and passport number.

In some cases, a combination of seemingly harmless data can be pieced together to identify someone’s identity, such as a person’s date of birth and the name of their hometown.

It’s important to note that Personally Identifiable Information (PII) and Protected Health Information (PHI) are similar but have distinct differences. PHI is specific to medical-related information, such as medical records, diagnoses, and treatments. PII, on the other hand, covers a wider range of data that includes identifiable information not necessarily related to a person’s medical history, but can also include information found in medical records. 

For example, a patient’s name, in healthcare settings, would be considered both PHI and PII, as it is used to link to specific medical information, but is also a personally identifiable data point.

HIPAA Compliance Considerations for Digital Products

Modern businesses are now leveraging technology to create products that can help deliver personalized experiences, improve efficiency and enhance customer satisfaction. However, with the sensitive nature of personal health information, it’s imperative for businesses connected to the healthcare industry to ensure their digital products comply with HIPAA regulations. 

Here are some considerations to keep in mind:

Identifying If Your Product is Subject to HIPAA

HIPAA regulations apply to “covered entities” like healthcare providers and “business associates” who offer services on behalf of covered entities. So, if your digital product handles PHI on behalf of covered entities or business associates, then it’s subject to HIPAA regulations.

To determine if your product is compliant with HIPAA, you’ll need to assess how the product handles PHI. Examples of PHI include patient names, contact information, and medical records. 

Ask yourself if your product collects, stores, or transmits PHI, and if so, determine whether the product is directly or indirectly handling PHI. Direct handling means your product is collecting, storing or transmitting PHI itself. Indirect handling means that PHI from another entity flows through your product.

In either case, you’ll need to carefully assess the product’s capabilities and ensure that it meets specific security requirements.

Masked doctors during a procedure

Implementing HIPAA-Compliant Features


Digital products should have security measures that help safeguard PHI, such as data encryption, access controls, and audit trails.


  • Data Encryption: Data encryption helps protect PHI by converting the information into a code that only people with the decryption key can access. Encryption technology helps ensure that PHI remains confidential and maintains its integrity.


  • Access Controls: Access controls are a critical aspect of HIPAA compliance. The principle of least privilege (POLP) is an essential part of access controls which means that users should have access to the minimum necessary information to perform their job duties. Multi-factor authentication is also an access control mechanism that could be implemented to prevent unauthorized access to PHI.


  • Audit Trails: Audit trail technology can track who accessed or modified PHI, and when. Whenever there is unauthorized access, a cyberattack, or data breach, businesses can use audit trails to determine what data was compromised, what remedial action needs to be taken, and who needs to be notified.


Risk Assessments and Management

Risk assessments and management is another important component of HIPAA compliance. Risk assessments provide a comprehensive overview of an organization’s security practices and help identify any risks or vulnerabilities that could lead to data breaches.

Conducting a risk analysis identifies potential risks and assesses their likelihood and impact. Business owners should consider the impact a breach will have on the organization’s reputation, financial position, legal compliance, and employee morale. 

Once businesses have identified vulnerabilities, they can then develop and implement measures to mitigate them. For example, a company that provides remote access to PHI can employ virtual private networks (VPNs) and multi-factor authentication to ensure the security of the communication channel.

Person on a laptop next to a stethoscope

Best Practices for Protecting PHI and PII in Digital Products

Protecting sensitive information within digital products is a crucial responsibility for businesses that handle Personally Identifiable Information (PII) and Protected Health Information (PHI).

Here are some best practices for protecting PII and PHI in digital product designs:

Data Minimization

It’s essential to collect only the data that is necessary for the intended purpose of your digital product. Collecting excessive data increases the risk of unauthorized access and the potential damage inflicted by a security breach.

Minimizing data collection can improve overall cybersecurity, which is further improved if personal data that is not essential to business operations is erased during subsequent processing.

Limiting data retention includes both online and offline data. Once data has been housed offline, it may be beneficial to encrypt it before erasing it. When storing online data, encryption and other measures can help reduce the risk of breaches.

Privacy by Design

Ensuring privacy from the beginning of the design process guarantees that privacy isn’t just an afterthought. This process is known as “privacy by design.” In the development process, businesses should execute privacy protections (such as anonymization) whenever possible to prevent the need to store any personal data.

Undergoing privacy impact assessments early in the development process can help identify potential data protection concerns in the design phase, providing an opportunity to eliminate any weaknesses and enhance security while still addressing consumers’ preferences.

It is critical that privacy policies are updated regularly to reflect changes in data protection laws and evolving security landscapes. For example, adding a security clause to existing privacy statements wouldn’t be allowed, and it’s not recommended to add quarantine or any other extreme privacy measures without notifying users first.

A transparent approach to the data protection of personal data, on the other hand, is typically the best approach. Businesses should explain how they use data and what data is collected. They should also explain how customers can delete or modify previous records.

Secure Data Storage and Transmission

All third-party vendors handling PII and PHI should adhere to an industry-standard regulatory framework. Cloud-based storage can help minimize the risk of unauthorized access, but it must comply with the industry and regulators’ standards. 

Data in the cloud should be secured with robust encryption mechanisms that ensure the safe transmission and storage of sensitive data. A cloud-based backup system can also be helpful in case of data loss or theft.

When sensitive data is being transmitted, secure messaging and file transfer protocols should be used. Protocols, such as SFTP or PGP, transfer metadata and messages from one user to another through an encrypted channel. Businesses should use secure messaging and file transfer protocols to reduce the risk of data interception and ensure data privacy.

Healthcare professional working with materials

Don’t Let Compliance Get In The Way of Your Digital Product’s Success

Protecting data in digital products and adhering to compliance regulations is essential for businesses that handle sensitive information. 

By following best practices such as minimizing the amount of data collected, implementing privacy by design principles, securely storing or transmitting data, and adhering to industry-standard regulatory frameworks, you can ensure your customers’ personal information remains secure while still providing an engaging experience with your digital products.