The Policy Effect of the General Data Protection Regulation (GDPR) on the Digital Public Health Sector in the European Union: An Empirical Investigation

The rapid development of digital health poses a critical challenge to the personal health data protection of patients. The European Union General Data Protection Regulation (EU GDPR) works in this context; it was passed in April 2016 and came into force in May 2018 across the European Union. This study is the first attempt to test the effectiveness of this legal reform for personal health data protection. Using the difference-in-difference (DID) approach, this study empirically examines the policy influence of the GDPR on the financial performance of hospitals across the European Union. Results show that hospitals with the digital health service suffered from financial distress after the GDPR was published in 2016. This reveals that during the transition period (2016-2018), hospitals across the European Union indeed made costly adjustments to meet the requirements of personal health data protection introduced by this new regulation, and thus inevitably suffered a policy shock to their financial performance in the short term. The implementation of GDPR may have achieved preliminary success.