Database design and confidential data protection

How is it done if you had to work on a project (such as modifying and existing system) involving confidential data that needs to be protected from the developer?

Say, you could be working on a database of medical records, and it must be ensured that you must not have access to personal information. I suppose one approach would be to replace all attribute descriptions by other values, e.g.,

Patient | Disease
-----------------+--------

Joe Bloggs       | Flu
Jane Johnson     | Cold
Michael Peterson | Syphilis

turns into

Patient | Disease
-----------------+--------

Paris            | Green Blue
Montparnasse     | Red
London           | Yellow Green

That's just something that ocurred to me, but how is it actually done? Just wondering.

TIA

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