Five people were being questioned last night after the discovery of an intelligence-gathering operation by dissident republicans.
Medical records at the Royal Victoria Hospital in Belfast were being accessed to target police officers, politicians and members of the policing board and newly created district policing partnership boards, it is alleged.
PSNI Chief Constable Mr Hugh Orde gave details of the operation after briefing members of the policing board at a meeting in Belfast.
The "Real IRA" is believed to be responsible.
Among the five arrested is a member of staff at the hospital, understood to be a clerical officer with access to the password- guarded records.
Giving details of the police operation, Mr Orde said five people had been arrested in the past 24 hours in the Belfast area.
He said police had started issuing warnings to those they believed to be at risk.
"This is an ongoing investigation. It is a substantial operation and it has been very professionally executed and carried out."
Mr Orde added: "We are looking at material that has been recovered to make sure that if people are being targeted they are being properly warned so we can look after them and their safety."
The hospital, in the heart of republican west Belfast, confirmed one member of staff was among those arrested and being questioned about a "serious breach of patient confidentiality".
"We are outraged that a records system designed to help clinical staff treat our patients may have been violated," said a spokesman.
The alleged breach was "unprecedented and deeply regretted," he added.
Mr William McKee, chief executive of the Royal Group of Hospitals, said if the allegation was true "it breaches every standard of integrity in patient care.
"It's a kick in the teeth for the 6,500 staff who work to such high, exacting standards."
Mr McKee added: "We are very concerned for the patients at the centre of this investigation and we are deeply sorry for the distress this is causing them and their families."
The hospital said any breach of patient confidentiality would be viewed as "gross misconduct and grounds for summary dismissal".
The hospital is the largest in Northern Ireland and treats more than 500,000 patients a year. It holds records on all of them, including home addresses.
Policing board chairman Prof Desmond Rea congratulated the Chief Constable and his officers on the success of their operation.
But he said: "This is an extremely worrying development, not least for those who are directly affected, but for everyone who wants to live in a normal, peaceful society." - (PA)