The Federal Trade Commission called out health privacy as a main area of focus — and a reason why it needs more funds — in its 2024 budget request released on Tuesday.
The agency has been increasingly aggressive in cracking down on companies trafficking consumers’ sensitive healthcare data, with recent enforcement actions against digital health companies GoodRx and BetterHelp, including multimillion-dollar settlements.
The FTC wants to further increase its scrutiny on healthcare by strengthening its ability to take on bigger and more complex cases, both to protect consumer privacy and crack down on anticompetitive consolidation in healthcare, the agency said.
“Additional staff will allow the agency to investigate and litigate more and increasingly complex matters, such as those involving health privacy,” the budget proposal says.
The FTC’s proposal calls for a $160 million boost in funding for the 2024 fiscal year, which would increase its budget by 37% compared to 2023. The proposed total budget of $590 million would help the agency hire more than 300 additional employees, according to the proposal.
The hike is necessary as substantial merger activity, signs of market concentration and related competition concerns have “dramatically increased” the pressure on the FTC’s resources in recent years, the budget request says. FTC Chair Lina Khan said the agency is “severely” understaffed and under-resourced in an interview with CNBC last year.
The FTC has been allocating more of its resources to the privacy of sensitive medical data since the Supreme Court’s decision last summer overturning the federal right to an abortion.
In the wake of the controversial ruling, bans on the procedure popped up in dozens of conservative U.S. states, and concerns grew that health data could be used to prosecute people who seek the procedure in states where it’s illegal. Digital records like text messages, browser histories and emails have been used to prosecute pregnancy-related criminal charges in the past.
The FTC has stepped into the U.S.’ gap in consumer data protection laws by ramping up actions against companies collecting and sharing users’ sensitive information. Just months after the Supreme Court’s decision, regulators sued data broker Kochava for selling geolocation data from hundreds of millions of mobile devices that could be used to trace peoples’ locations, including to and from sensitive locations like reproductive health clinics.
In February, the FTC banned GoodRx — best known for offering prescription drug discounts — from sharing user health data with third parties for advertising purposes after regulators found the company had monetized that data for years. GoodRx also agreed to pay a $1.5 million fine.
Regulators also banned mental health company BetterHelp from sharing consumer data with advertisers earlier this month. BetterHelp, a subsidiary of telehealth giant Teladoc, allegedly shared users’ sensitive medical information with advertisers like Facebook from 2013 through 2020. BetterHelp was fined $7.8 million.
And it could soon become even more difficult to collect, analyze and profit from Americans’ information. The FTC proposed rulemaking last summer to enact stronger data privacy protections by further cracking down on businesses that collect and sell consumer data.
The FTC has also been active in challenging healthcare mergers it views as anticompetitive. In 2022, regulators moved to block three health system mergers, resulting in all parties abandoning the proposed deals, according to the budget request.
The mergers that fell through as a result of the FTC are Lifespan and Care New England in Rhode Island; HCA and Steward Health Care in Utah; and RWJBarnabas and St. Peter’s Healthcare System in New Jersey.
The proposed budget for 2024 “reflects continued growth in our investigative and litigation capacity to meet the increasing, broad-based anticompetitive challenges in healthcare and technology markets,” the budget proposal says.
Yet historically, the agency doesn’t get as much as it asks for. Last year, the FTC asked for a $139 million bump to its funding, but only received an increase of $53 million, resulting in a total budget of $430 million in 2023.