NEGATIVE — MEDICAL — DISADVANTAGES 261

PRIVACY CONTROLS CAUSE A HUGE RISE IN MEDICAL COSTS

ENACTMENT OF MEDICAL PRIVACY REGULATION WILL COST MEDICAL CARE PROVIDERS MANY BILLIONS

Joseph Goedert, Health Data Management, December 1999, TITLE: Blues Association Says Privacy Carries Big Price // acs-VT2001

Enactment of privacy legislation would cost the health care industry at least $ 43 billion over five years, a new Blue Cross and Blue Shield Association-funded study contends. The study, by Robert E. Nolan Co., Dallas, examined the cost to implement three common provisions in virtually all proposed privacy bills introduced in Congress: the need for health care organizations to obtain patient authorization to use medical information; the right of patients to examine medical records and request corrections; and the requirement for organizations to track information disclosures. The study's price tag also includes the cost of infrastructure changes needed to implement these provisions, as well as the cost of reduced medical management-oversight of care-that would result from the three provisions, according to the association.

COSTS OF SPECIFIED MEDICAL PRIVACY REQUIREMENTS ARE HUGE

Joseph Goedert, Health Data Management, December 1999, TITLE: Blues Association Says Privacy Carries Big Price // acs-VT2001

Health Care Privacy Implementation Costs

Action Cost Obtaining authorizations to disclose information $ 1.9 billion

Patient inspection and copying of records $ 4 billion

Tracking disclosures $ 9.1 billion

Infrastructure changes $ 23.4 billion

Reduced medical management services $ 4.4 billion

Source: Robert E. Nolan Co. study for the Blue Cross and Blue Shield Association. Figures are for costs over the first five years of implementing privacy provisions common to current privacy bills before Congress.

INFORMING PATIENTS OF THEIR PRIVACY RIGHTS WILL INCUR HUGE NEW MEDICAL SECTOR COSTS

ROBERT PEAR, The New York Times, October 30, 1999, SECTION: Section A; Page 1; TITLE: RULES ON PRIVACY OF PATIENT DATA STIR HOT DEBATE // acs-EE2001

Federal officials estimated that it would cost doctors, hospitals and health maintenance organizations more than $400 million to issue notices informing patients of their privacy rights, as required by the rules. In addition, the officials predicted, thousands of patients will try to correct their medical records, and it will cost the health-care industry more than $2 billion to deal with these requests over the next five years.

INDIVIDUAL ACCESS AND PRIVACY PROTECTION FEATURES ARE EXTREMELY COSTLY

The Atlanta Journal and Constitution, November 2, 1999, SECTION: Editorial; Pg. 12A TITLE: Editorials: Medical privacy carries steep price // acs-EE2001

Some sectors of the health care industry, notably insurance carriers, complain the individual-access and privacy-protection procedures will be ruinously expensive, perhaps 10 times the administration's estimate of just under $ 4 billion. This assertion deserves hard examination while the rules are subject to public comment and are refined.

VALUE OF MEDICAL PRIVACY PROTECTIONS MUST BE GAUGED AGAINST THEIR HUGE COSTS

ROBERT PEAR, The New York Times, October 30, 1999, SECTION: Section A; Page 1; TITLE: RULES ON PRIVACY OF PATIENT DATA STIR HOT DEBATE // acs-EE2001

The Administration estimated that compliance would cost the health-care industry $3.8 billion over five years, but the insurance industry says the costs could be 10 times that amount. With both sides saying they support the goals of the standards, a central point in the debate will be: What is privacy worth in dollars and cents?

METHODOLOGY OF THE MEDICAL PRIVACY REGULATION COST FIGURES WAS SOUND AND CONSERVATIVE

Joseph Goedert, Health Data Management, December 1999, TITLE: Blues Association Says Privacy Carries Big Price // acs-VT2001

Although others dispute the study's projected cost, the association claims it took a cautious approach. For instance, the cost to obtain authorizations was based only on costs to employers and payers, and not providers. The cost for permitting patients to inspect their records assumed only 2% of patients would ask for their records, and that it would take physicians' offices only 10 minutes to find the records. And the medical management price tag was based only on costs to HMOs, not other types of health plans. The association does not oppose privacy protections, but creating bureaucratic rules is not the answer, it says. The association recommends that privacy legislation or regulations simply list the types of information use and disclosure that are not permitted. As a result of such exhaustive bureaucratic rules, patient care could be threatened, Nyquist says. "If you make physicians and staff think twice before releasing information, they aren't going to release all of the information that is needed," she says.

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MEDICAL PRIVACY REGULATION COST FIGURES WERE CONSERVATIVE

Joseph Goedert, Health Data Management, December 1999, TITLE: Blues Association Says Privacy Carries Big Price // acs-VT2001

Although the privacy cost estimates might seem high, Alissa Fox, executive director for policy for the Chicago-based association, says the Blues group took a conservative approach. "We've significantly underestimated the cost, even at $ 43 billion," she says.