Health Tech Startup Challenges: Distributed Data, Encryption & Security

Sector: Digital Product

Author: Nisarg Mehta

Date Published: 06/15/2023

Health Tech Startup Challenges Distributed Data, Encryption and Security

HealthTech startups are revolutionizing the healthcare industry with innovative ways to deliver patient care and democratizing it.

However, increasing reliance on distributed data makes ensuring its security is becoming a challenge for HealthTech.

Distributed Data is a Challenge for HealthTech Startups

HealthTech startups encounter several challenges when dealing with distributed data, including:


1. Data Breach Risks

Data breaches pose a significant threat to HealthTech startups and the privacy of patient information.

In 2016, Anthem, a prominent health insurance company, fell victim to a massive data breach that exposed the personal information of over 78 million individuals.

Similarly, in 2017, Premera Blue Cross experienced a breach that compromised the data of more than 11 million people.

These incidents underscore the vulnerabilities inherent in managing distributed data.

2. Data Access and Authorization

HealthTech startups often struggle with managing data access and authorization across multiple systems and stakeholders.

Ensuring that only authorized personnel have access to sensitive health information is crucial to maintaining data privacy and preventing unauthorized use or disclosure.

3. Data Integrity and Consistency

The integrity and consistency of distributed data are vital for accurate healthcare decision-making.

Inconsistent or compromised data can lead to flawed diagnoses, treatment errors, and compromised patient safety.

HealthTech startups must employ measures to guarantee the accuracy and reliability of their distributed data.

We’ll discuss the best practices later in this article. So keep reading.

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4. Regulatory Compliance

Healthcare data is subject to stringent regulatory compliances, including the HIPAA, in the United States.

HealthTech startups must ensure compliance with these regulations to protect patient privacy and avoid penalties.

Ensuring Encryption and Security for Distributed Data Safety

Here are the best techniques to secure data in a distributed environment:


1. Data Classification

HealthTech startups should start by classifying data based on its sensitivity level.

Categorize data as public, internal, confidential, or highly sensitive.

This classification helps determine the appropriate level of encryption and security measures to apply.

Public Data

Public data refers to information that is intended for public consumption and does not contain sensitive or personally identifiable information. Examples include general health information, public research findings, and educational materials.

While this data category may not require strict access controls, it’s still essential to ensure its accuracy and integrity. HealthTech startups should focus on maintaining data consistency, ensuring that public data is up-to-date and reliable.

Internal Data

Internal data encompasses information that is intended for internal use within the organization. It may include non-sensitive business data, operational information, and internal communications.

While internal data may not contain highly sensitive information, it should still be protected to maintain confidentiality and prevent unauthorized access.

HealthTech startups should:

  • Implement access controls to limit internal data access to authorized personnel.
  • Regularly review and update access permissions based on job roles and responsibilities, ensuring that only relevant employees can access this data.

Confidential Data

Confidential data includes sensitive information that requires heightened security measures to protect its privacy and prevent unauthorized disclosure.

This category encompasses personally identifiable information (PII), protected health information (PHI), financial data, and any other data subject to legal or regulatory protection.

HealthTech startups must implement stringent security controls for this data category. This includes:

  • Strong data encryption at rest and in flight
  • Multi-factor authentication for access
  • Strict access controls based on the principle of least privilege
  • Regular monitoring and auditing to detect and prevent unauthorized access attempts

Highly Sensitive Data

Highly sensitive data represents the most critical and sensitive information within a HealthTech startup. It may include trade secrets, intellectual property, proprietary algorithms, or highly confidential research data.

This category demands the highest level of protection. HealthTech startups should employ advanced security measures, such as

  • Advanced encryption algorithms
  • Strict access controls with additional layers of authentication
  • Restricted access to a limited number of authorized individuals with a genuine need-to-know basis

Physical security measures may also be necessary to protect highly sensitive data stored on physical media.

2. Encrypt Data in Transit and Storage

To ensure the secure transmission and protection of data within a distributed system, it is imperative to employ encryption across various aspects.

Encryption should be implemented in three key areas: client-to-server communications and connections, the data itself, and inter-node communication channels.

While it is essential to encrypt these areas, the specific implementation can vary based on requirements and preferences.

Here are some of the most common data encryption methods you should know to move forward:

  • TLS/SSL Encryption: This essential security protocol provides a secure connection between servers and clients, protecting data during transmission.
  • PGP Encryption: Widely used for secure file sharing, PGP encryption combines symmetric and asymmetric encryption methods, ensuring maximum security.
  • S/MIME Encryption: Specifically designed for email communication, S/MIME encryption safeguards the contents of email messages and attachments, preventing unauthorized access.
  • SFTP (Secure File Transfer Protocol): SFTP enables secure file transfers over the internet, employing encryption and authentication to protect data during transit.
  • VPNs (Virtual Private Networks): VPNs establish secure connections between devices, safeguarding sensitive data from cyber threats, facilitating remote work, and ensuring privacy while browsing the internet.

You can use these encryption methods to secure communication channels throughout your healthcare ecosystem.

When it comes to encrypting health and financial data at rest, the most commonly advised approach is to encrypt the entire disk volume.

This comprehensive method ensures that all data on the disk is encrypted, rendering it inaccessible without the corresponding encryption key(s). Encrypting the entire volume provides the highest level of security for data at rest.

3. Use an Authentication and Authorization Layer

HealthTech startups should implement a robust authentication and authorization layer to control access to distributed data. Additionally, they should utilize secure login mechanisms, such as username-password combinations or biometric authentication, to authenticate users.

Multi-factor authentication adds an extra security layer by requiring additional verification methods, like SMS codes or biometric scans.

Role-based access controls (RBAC) should also be employed to assign specific access privileges based on job roles and responsibilities.

This makes sure that only authorized individuals have access to and modify specific data, reducing the risk of data breaches.

4. Privatize Schemas

To limit data access to authorized personnel, sensitive data schemas should be privatized. A schema provides a blueprint for organizing and structuring the data within a database. It defines the tables, columns, data types, constraints, and relationships between tables. It serves as a logical representation of the database structure.

By segregating data and restricting access at the schema level, HealthTech startups can minimize the risk of unauthorized exposure. This can be achieved by implementing strong access controls and utilizing data anonymization techniques when sharing data with external parties.

5. Key Management

Proper key management is crucial for the effectiveness of encryption. Implementing secure key generation, storage, rotation, and revocation practices is the best foot forward for HealthTech startups.

Also, encryption keys should be stored in a secure key management system that provides strong access controls and auditing capabilities.

HealthTech startups should regularly rotate encryption keys to mitigate the risk of compromise. Also, in the event of a security incident or when an individual with access leaves the organization, promptly revoking their access to prevent unauthorized decryption of sensitive data can help.

6. Access Controls

Implementing granular access controls to enforce the principle of least privilege is the right security approach for HealthTech startups. They should grant access rights based on job roles and responsibilities, limiting data access to what is necessary for each user to perform their tasks.

Moreover, regularly reviewing and updating access permissions to ensure they align with the current requirements and standards will help.

Additionally, they should enforce strict password policies, such as password complexity requirements and regular password changes, to enhance access control security.

7. Data Integrity

Data integrity measures ensure that distributed data remains accurate and unaltered. HealthTech startups should implement mechanisms such as digital signatures and hashing algorithms to verify the integrity of data.

Digital signatures use cryptographic techniques to sign data, allowing recipients to verify its authenticity and detect any unauthorized modifications.

Hashing algorithms generate unique hash values for data, which can be compared to ensure data integrity.

Hence, startups should regularly verify the integrity of distributed data to detect any unauthorized modifications or tampering attempts.

8. Network Segmentation

HealthTech startups should implement network segmentation techniques to isolate sensitive data from other systems and minimize the potential impact of a breach.

By using firewalls and creating separate network zones with different security levels, sensitive data can be segregated from less secure areas.

This approach reduces the attack surface and mitigates the risk of unauthorized access or lateral movement within the network.

9. Security Monitoring and Auditing

It is crucial for HealthTech startups to implement robust security monitoring and auditing systems. By deploying intrusion detection and prevention systems (IDPS), monitoring network traffic for suspicious activities or known attack patterns becomes possible.

Collecting and analyzing logs from various systems and applications helps identify potential security threats or anomalies.

Regular security audits should be conducted to assess the effectiveness of security controls, identify vulnerabilities, and address any gaps or weaknesses in the security infrastructure.

10. Employee Awareness and Training

HealthTech startups should prioritize educating their employees about the sensitivity of data, the importance of security, and their role in safeguarding sensitive information.

They can conduct regular training sessions to raise awareness of security best practices, data handling procedures, and the risks associated with data breaches.

Building a security-conscious culture within the organization ensures that all employees understand and adhere to proper security protocols.


Implementing robust encryption and security measures tailored to data sensitivity, along with network segmentation, monitoring, and employee awareness, is crucial for HealthTech startups.

By prioritizing data protection, startups can build trust, comply with regulations, and thrive in the evolving healthcare landscape, ultimately contributing to improved patient outcomes and healthcare delivery.

If you’re a healthcare startup looking to build a robust and secure technology infrastructure, you can reach us at Techtic.

We’re a technology service provider for healthcare businesses. Have a call with our technology experts to ensure a secure healthcare technology infrastructure.

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