Why Traditional CDPs Fail Healthcare — and What to Do Instead

Healthcare marketers are striving to leverage patient data to provide better patient experiences, streamline bookings, and more. And they must. Patients have become accustomed to the seamless experiences offered by brands in other sectors and are developing higher expectations than ever before.

But healthcare organizations are in a unique predicament. They need to deliver digital experiences rivaling those offered by technology-first brands while navigating their industry’s complex data privacy landscape. And they have to do it with access to fewer engineering resources than the Ubers and Amazons of the world.

To meet the benchmarks set by the world’s leading brands, many healthcare organizations are turning to Customer Data Platforms (CDPs), which make it easier to use data to deliver personalized digital experiences. But the CDP market is expansive and diverse, and not all vendors support healthcare organizations’ unique needs.

In this article, we’ll explain what CDPs are and provide guidance on how healthcare marketers can find a CDP that solves their data challenges. First, let’s recap what some of those challenges are.

The biggest data challenges healthcare organizations are facing

Healthcare organizations often have an array of disconnected systems. A patient’s appointment data may be housed in an Electronic Health Record (EHR), while their engagements with marketing campaigns are stored in a CRM. When these systems are siloed, it’s difficult for the business to understand how marketing initiatives are tied to appointment booking. Marketing is left to rely on spray-and-pray campaigns and struggles to improve programs over time.

Second, many healthcare organizations have limited technical personnel available to implement, manage, and maintain modern tools. Deploying data management and analytics systems can require months of work from skilled engineers. Beyond implementation, organizations may need to perform custom work, such as building bespoke data pipelines and healthcare-specific data privacy safeguards. But most healthcare organizations have limited IT teams, and tend to allocate the technical resources they do have to cybersecurity, not marketing technology.

And finally, unlike other industries, healthcare organizations have to navigate a complex regulatory environment that governs the way in which they can use technology and patient data. HIPAA, for example, requires organizations to sign Business Associate Agreements (BAAs) with all third-party technology vendors they are using to process patient data. But many major adtech providers don’t sign BAAs. Instead, they restrict the data that can be sent to their platforms, preventing healthcare marketers from utilizing standard practices like retargeting, conversion optimization, and multi-touch attribution. For example, Meta recently introduced new data-sharing restrictions that limit the events healthcare organizations can send to their platform, making it difficult to use tools like Meta’s Pixel, their Conversions API, and their App Events API.

To make matters more challenging, healthcare regulations are continuing to evolve. At the state level, individual jurisdictions are rolling out their own privacy laws. Jennifer Pike, Counsel in the Healthcare Group at Alston and Bird, explains, “You really need to pay attention. Every state now has a different definition of the information and the way it applies.”

At the national level, the definition of PHI is constantly evolving, and regulatory scrutiny is expanding beyond providers to payers and pharma. These developments, paired with consumers’ growing mistrust of healthcare data management, have led to over 200 class action lawsuits in the last two years, as well as $145M in HIPAA penalties across 152 enforcement actions.

The promise: How can Customer Data Platforms help?

A CDP is a packaged software platform that unifies user data from across internal systems and external sources to create a single view of the customer. It enables teams to connect that data to marketing, advertising, and analytics tools via productized integrations.

CDPs help organizations break down data silos and centralize their customer data sets. This makes it easier for stakeholders to access the data they need, ensure it complies with privacy guidelines, and use it to enhance campaign targeting, personalization, attribution, and analytics.

As Rich Briddock, Chief Strategy Officer at Cardinal Digital Marketing, explains, "What a CDP allows you to do is have one pixel for multiple channels and to send the same data to all of those channels.” This allows marketers to “compare apples to apples” when analyzing and activating data across their technology stack.

Though initially favored by tech-forward sectors like eCommerce, CDPs are now being adopted across industries. Many healthcare organizations in particular have turned to CDPs to break down data silos and improve marketing performance. But the promise of CDPs has not always materialized for healthcare marketers.

The reality: Traditional CDPs weren’t built for healthcare

Traditional CDPs are risky by default. The moment you turn on an integration, they begin sending data downstream — often without the proper safeguards in place. For healthcare marketers, that’s a compliance nightmare. Without strict controls, sensitive data can flow to tools that aren’t covered by a BAA, putting the organization at serious legal and reputational risk.

And even when they attempt to meet regulatory standards, most CDPs fall short. Many rely on reversible encryption methods to mask PHI. But as the Department of Health and Human Services (HHS) defines it, encryption is not a substitute for true de-identification. The result? Incomplete data sets, broken attribution, and marketing strategies based on guesswork instead of insight.

CDPs require significant engineering resources

Traditional CDPs are infrastructure-layer technology, collecting user data across many sources, processing it, and connecting it to critical systems. CDP deployment at an enterprise level typically requires 3-6 months of effort from multiple skilled engineers. Events and attributes must be implemented across web, mobile, and backend systems, and integrations must pass through InfoSec and legal review.

Even after implementation, CDPs must be customized to support the healthcare stack. Most off-the-shelf integrations are not HIPAA-compliant and require engineering teams to build custom, server-to-server connections that avoid exposing PHI in the browser. As Andy Waldrop, VP of Digital Experiences and Product Management at WebMD, explains, “Executing a traditional CDP inside of a health system is incredibly complex. It's going to take lots of IT, engineering, and marketing involvement to execute. It's a very difficult thing for a health system to take on.”

And because healthcare marketers need to continuously adjust tracking to support new campaigns, CDPs that require engineering support can become a bottleneck instead of an enabler.

Built for the consumer journey, not the patient journey

CDPs were born in the world of consumer retail. Their data models reflect that: they’re designed to track product views, cart adds, purchases, not health journeys.

But healthcare is different. Healthcare marketers must understand digital engagement alongside appointment bookings, satisfaction surveys, insurance checks, and more. And they must do so while respecting patient privacy and complying with HIPAA.

Traditional CDPs don’t track the patient journey natively. As a result, marketers are forced to shoehorn patient interactions into models meant for carts and checkouts, or spend engineering effort building custom tracking.

It’s time for a healthcare-specific CDP

In response to these challenges, a new class of CDPs purpose-built for healthcare has emerged. These platforms offer all the benefits of traditional CDPs — data unification, patient-level profiles, and omnichannel integrations — but are designed from the ground up to meet healthcare’s privacy and performance requirements.

One example is Freshpaint, a healthcare-specific CDP that makes it easy for marketers to harness patient data while staying compliant and agile.

Built for HIPAA compliance and privacy control

Freshpaint’s infrastructure is built to protect PHI by default. Instead of reversible encryption, it uses irreversible hashing to de-identify patient data before it ever leaves your system. But perhaps more importantly, Freshpaint prevents data from flowing until your team explicitly allows it.

While most CDPs start forwarding data to third-party tools as soon as an integration is turned on, Freshpaint puts the brakes on. No user, event, or group data is shared until it has been added to an allowlist, down to the individual property. That’s critical in healthcare. It minimizes legal risk, simplifies InfoSec reviews, and gives marketers the confidence to move fast.

As Jess Morales, Lead Digital Analyst at Phase2 Technology, puts it, her team “can literally drill down to the individual event and approve or reject which information gets passed on to each marketing destination.”

Designed for marketers, not engineers

Freshpaint also recognizes that most healthcare marketing teams don’t have unlimited access to developers. That’s why the platform is built with non-technical users in mind.

Freshpaint provides implementation support, standard event templates for healthcare journeys, and integrations that work out of the box, so teams can get up and running in weeks, not months.

Built for healthcare marketing use cases

Freshpaint has built bespoke, server-to-server integrations with key tools like Google Ads, Meta, demand-side platforms, CTV, and analytics providers — all HIPAA-compliant and covered under a BAA. This allows healthcare marketers to:

• Run attribution
• Optimize campaigns using smart bidding
• Retarget across channels — all without exposing PHI in the browser.

For example, when Cardinal Digital Marketing began using Freshpaint to connect conversion data to Meta for one of their clients, they saw a 70% decrease in cost per in-network lead, all while remaining HIPAA-compliant.

And it’s not just ads. Freshpaint makes it possible to unify web activity with booking system data. Teams can view a complete patient journey — from site visit to appointment — and improve programs across the funnel.

St. Elizabeth Healthcare, for instance, uses Freshpaint as the data foundation for their display, retargeting, and paid search campaigns. Stephanie Downing, Director of Digital, says the platform allows her team to “orchestrate personalized experiences throughout the funnel, without exposing PHI.” So far, they’ve achieved a 92% increase in paid search conversions while improving data privacy.

Redefining What a CDP Means for Healthcare

Traditional CDPs were designed for consumer brands with flexible data policies, deep engineering teams, and transactional funnels. Not for healthcare organizations navigating HIPAA, InfoSec reviews, and complex patient journeys. But that doesn’t mean healthcare marketers have to settle for fragmented data, missed opportunities, or compliance risks.

Healthcare-specific CDPs like Freshpaint are redefining what’s possible. With privacy-first infrastructure and purpose-built integrations, they empower healthcare teams to unify data, personalize experiences, and prove ROI. All without compromising on compliance.

The era of the one-size-fits-all CDP is over. The future belongs to platforms built for the unique realities of healthcare.