As India’s landmark Digital Personal Data Protection (DPDP) Act is set to come into force in 2025, key players in the healthcare and insurance sectors are racing to align their data operations with the stringent requirements of the new law. According to an article titled “Hospitals, insurers rejig operations as DPDP kicks in next year” published by The Economic Times, both private and public institutions are undertaking significant operational overhauls in anticipation of the legal and technological challenges that the DPDP regime is expected to bring.
The DPDP Act, which was passed in 2023, introduces a rights-based framework for data privacy, placing greater accountability on data fiduciaries—entities that collect and process personal data—to ensure secure and transparent handling of sensitive information. For hospitals and health insurers, this translates to a fundamental shift in how patient and customer data is stored, shared, and consented for use.
Large hospital chains are reportedly revamping their IT infrastructure and revising internal data processing protocols. Industry insiders acknowledge that this transition requires not just technical upgrades, but also cultural and procedural changes that could affect various aspects of service delivery. From admission forms to third-party collaborations, every data touchpoint is being re-evaluated for compliance risks.
Insurance providers, similarly, are grappling with the complexity of overhauling systems long used for data collection and underwriting. Much of the industry’s operations depend heavily on accessing sensitive health records—a practice that, under the DPDP Act, will now necessitate explicit, purpose-limited consent from individuals. Companies are investing in AI-based consent management tools and revising partnerships with hospitals and diagnostic labs to develop data-sharing mechanisms that are both lawful and efficient.
Smaller entities, particularly those lacking robust digital infrastructure, face a steeper climb. Many are seeking external consulting support to decode the implications of the law and implement phased compliance strategies. The new rules are expected to push enterprises toward data minimization, purpose limitation, and the right to erasure—integral elements of privacy-by-design frameworks now common in advanced digital economies.
The urgency is further amplified by the penalties prescribed in the legislation, with non-compliance potentially attracting hefty fines from the Data Protection Board. Stakeholders are also mindful of the reputational risks associated with data breaches in a sector where trust and confidentiality are paramount.
Experts say that while the DPDP Act is seen as a necessary modernization of India’s digital governance landscape, the real test will lie in its execution. The healthcare sector, traditionally driven more by clinical than cybersecurity concerns, is particularly susceptible to disruption during this transition. But proponents argue that the shake-up could lead to stronger data integrity and greater user trust over time.
As the January 2025 implementation deadline approaches, India’s healthcare and insurance sectors find themselves at a critical junction—one that demands not just compliance, but a reimagining of how citizen data is respected and protected in a digital age.
