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Health Care Reform:

Health Insurance & Affordable Care Act

Medical Privacy Rule Gets the Go-Ahead, Finally

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However, bigger isn't necessarily better if you're a medical provider. Though the American Hospital Association (AHA) says it endorses a federal privacy law, the group claims this one won't work. "[The Department of Health and Human Services] has micromanaged these regulations without really a thorough understanding of the industry ... and that's why these regulations are fraught with unintended consequences," Melinda Hatton, vice president and chief legislative counsel of the AHA, tells WebMD.

Even to implement the basics, Hatton says, it would cost the industry some $22 billion over five years. The high price tag would result in part from the need to revise the current information technology system. Computers would have to be re-tooled so only the right people had access. New programs would be needed to keep track of all medical disclosures.

Hatton's conclusion, "This is the most complex and prescriptive privacy law ever."

However, Goldman says it's a baseline that can be reached, and she says the AHA's numbers "are based on misinformation and distortion." She says the government's own estimates show that by factoring in efficiencies gained through new transaction standards, there will actually be a net savings to the industry of $12 billion over a 10-year span.

The American Association of Health Plans, the Health Insurance Association of America, as well as the AHA and the American Medical Association all issued statements urging the government to redraft the proposal.

"It will affect the patient-physician relationship in the sense that there will be more paperwork burdens. ... We want more time for patient care, not more time for paperwork," AMA Trustee Donald Palmisano, MD, tells WebMD. He also says that ironically the rule won't keep medical information away from marketers, because they're not directly covered by a health statute.

But avoiding the privacy issue also has a price. Goldman says that as many as up to 20% of Americans avoid the medical system for fear that their confidential information will be revealed to an insurer or an employer.

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