While there has been much focus lately on the ways in which ObamaCare is chilling the growth of private business, we should not overlook the continuing deleterious effects of the one surviving relic of HillaryCare, the Health Insurance Portability and Accountability Act (HIPAA). Quietly, September 23 came and went as the compliance effective date for a new rule, expanding the reach of HIPAA, and likely driving many smaller players out of the health care industry.
Spearheaded by then First Lady Clinton, HIPAA was established in 1996 to improve privacy of personal health information, referred to as protected health information, or PHI. It requires health care providers, known as “covered entities,” and their vendors, contractors, and agents with access to PHI, known as “business associates,” to comply with certain privacy standards under its “Privacy Rule,” and with certain security standards under its “Security Rule,” in order to protect sensitive health information that is held or transferred in electronic form.
Over the past decade, equipped with the noble aim of protecting our privacy, HIPAA has successfully demonstrated the power of the law of unintended consequences. Improved protection of PHI has been marginal. However, HIPAA has impeded communication among physicians, reduced physician time devoted to patient care, and deterred medical research. And all at an enormous cost of compliance. While estimates vary widely, the cost of compliance for many providers has been in the millions.
Now, rather than take heed, the government has decided to double down through expansion. Under the Health Information and Technology for Economic and Clinical Health Act (HITECH), a corollary of HIPAA, promulgated to create incentives to facilitate the development of healthcare information technology, the government has sought to update the requirements of HIPAA in light of the changing dynamics of technology and health practices, increasing the safeguards and obligations of health care providers and their business associates.