1. Finding the Best of the Imperfect Alternatives for Privacy, Health IT, and Cybersecurity Peter Swire Moritz College of Law Wisconsin Symposium in Honor of Neil Komesar October 20, 2012

2. To Begin 2003 Law of Cybersecurity Course Theory and practice

3. Overview Market and government failures Examples HIPAA medical privacy Health IT and 2009 funding Internet privacy Cybersecurity Role of courts Conclusion

4. The Test of a First-Rate Intelligence Market failures and welfare economics Government failures and public choice Coase and Williamson The test of a first-rate intelligence These two ideas all-too-often incompatible, at least in D.C. My ultimate goal is to aid the reformation of society So, I suggest the following description …

5. A Raging Moderate Passionate commitment to reform society Acute awareness of market failures Acute awareness of government failures I find this congenial OIRA does as well

6. HIPAA Privacy Rule 1999-2000 HHS reg Clearly had flaws But Congress couldnt do it And electronic payments compelled action, so Tasks that strain the abilities of an institution may wisely be assigned to it anyway if the alternatives are worse

7. Health IT in ARRA Bipartisan support for EHRs, not manila folders Need standards for interoperability The market didnt do it, even with jawboning Recovery Act $19 billion Meaningful use Tipping point for adoption, so The analysis converges with Ronald Coases famous transaction cost approach

8. Internet Privacy Market failure – hard for consumer to monitor data flows Government failure – hard to dictate acceptable technology, quickly and accurately 1997 paper on Markets, Self-Regulation, and Government Enforcement in the Protection of Personal Information But, self-regulation only works here when have a credible threat of government action, so … Speaking prose

9. Cybersecurity 2003 course Market failures – externalities Government failures – like privacy only worse First, do no harm – dont create backdoors to help surveillance Large bank CISO, so Quite commonly … institutions move together

10. The Courts Some information policy issues have specific factual triggers and/or harms Defamation Data breach Violate a promise – Section 5 FTCA IP and infringement Many, though, concern design of complex, fast- changing IT systems Judicial management through structural reform suits? Im skeptical.

11. Conclusion Imperfect Alternatives and 2003 course An analytic approach for a wide range of issues And, a call for something too rare in a divided political world, the passion and humility of raging moderation