Bush Issues Privacy Rules

Published June 1, 2001

President George W. Bush’s April decision to implement the hotly contested Medical Privacy Act shocked consumer groups and industry experts.

The privacy regulations, originally issued in December by the Clinton administration, were initially put on hold for further review by Health and Human Services Secretary Tommy Thompson. Thompson is now reassuring privacy interest groups by saying he plans to allow the rules to take effect while making common-sense changes to the rules.

In an April 13 interview with the Wall Street Journal, Scott Serota, president of the Blue Cross/Blue Shield Association, said the rules were “an operational nightmare.” Two years will not be enough time for industry to reach compliance, he added. An American Hospital Association spokesperson said the group was “profoundly disappointed” by the decision.

Grace-Marie Arnett, president of The Galen Institute, also expressed concern over the President’s move. “It was a mistake for the Bush administration to allow the so-called privacy regulations to take effect without change,” she told Health Care News.

“Tens of thousands of citizens wrote letters during the comment period,” she said, “most pointing out the many faults and flaws with the regs. Many complained the regulations would impede the ability of physicians, nurses, and hospitals to care for patients and would add significantly to the avalanche of paper already choking the health care system.”

According to Arnett, “Some health care providers say the privacy regulations are virtually impossible to implement as they are currently written. Ultimately, those who will pay the highest price will be the health care consumers and taxpayers.”

Dr. Joe York, assistant head for medical education and a faculty member at the University of Illinois College of Medicine, has a different take on the privacy rules. “At a time when private hospitals are facing ever-shrinking margins, the government is sending them another unfunded mandate,” said York. “In this case, it covers an area most health care providers are already careful about, and that is patient confidentiality, which is clearly outlined in the American Hospital Association Patient Bill of Rights.”

York called the timing of Bush’s decision “ironic,” noting “this proposal comes at a time when technology allows better monitoring and recording of access to confidential electronic records. Unlike paper records, which can be misplaced, lost, stolen, and photocopied, electronic records are reasonably secure.

“Public concern over privacy is uninformed in most cases,” according to York, “with focus on spectacular hacking incidents and fear of government misuse of information. These problems have always existed, and the electronic fingerprints left behind by snoopers are easier to detect than those by physical intrusion.”

As is true of political decisions generally, not everyone is upset by the Bush move. Janlori Goldman, director of the Health Privacy Project at Georgetown University, stated, “We are greatly encouraged that we have cleared the first major hurdle.”

Sending a Message

At this writing, there appears to be a broader political strategy behind the President’s actions. Because of recent decisions that support policies favorable to business interests, Bush has endured heavy criticism from environmentalists, labor unions, and consumer advocacy groups. Bush advisors are thought to believe the privacy issue would provide some relief from criticism, citing recent consumer polls that support the President’s position.

In his own defense, Bush told Frank James of the Chicago Tribune’s Washington bureau, “I recognize that legitimate concerns have been raised about the current rules, which I share, such as parents’ concerns that the rule limits their right to have access to their children’s records.”

As currently written, the rules require doctors, hospitals, and other health care providers to obtain written consent before using or disclosing medical information for even routine purposes like treatment or the payment of claims. Patients would have the right to inspect and copy their records and could propose corrections. The rules cover not only paper records, but the more troublesome issue of computer files and oral communication.

Health care providers have two years to come into compliance. After April 14, 2003, anyone who violates the privacy rules will be subject to both civil and criminal penalties, including a $250,000 fine and 10 years in prison.

In a move aimed at comforting critics, the administration has said the medical privacy protections may be revised in at least three ways:

  • Give parents access to their minor children’s records, including records on abortion or mental health care.
  • Reduce confusing requirements on consent forms that some critics say could make it difficult for someone other than a patient to pick up prescriptions.
  • Ensure that medical professionals have access to necessary medical information.

Despite the administration’s assurances, lobbying is expected to continue from all sides of the issue. The American Civil Liberties Union has warned the Bush administration not to trample on the rights of minors or dilute the patient consent rules. Dick Davidson, spokesperson for the American Hospital Association, warned, “These rules could create a bureaucratic nightmare, needlessly adding billions to the nation’s medical bills.”

Dr. Miguel A. Faria, editor-in-chief of Medical Sentinel, the journal of the American Association of Physicians and Surgeons, told Health Care News, “Among other things, the regulations create a behemoth federal bureaucracy, which has been estimated to cost anywhere from $18 billion over 10 years to a more frightening estimate of $40 billion. The regulations require doctors to share patient records with the federal government—without patient consent.”

Faria added, “The bad guys, according to the Washington Post, are the entities in the health care industry, which is portrayed as a monolithic structure opposing privacy as an inconvenient expense. The reality is more complex. Many in the health care industry oppose the regulations because they will cost billions to implement, while empowering government at expense of the public’s medical privacy.

“In this topsy-turvy, spin scenario,” Faria continued, “government officials are portrayed as the good guys acting in the best interest of the public. Privacy, again, has been turned completely on its head.”

Here Comes the Armey

House Majority Leader Dick Armey (R-Texas) had written Secretary Thompson in March, urging him to either reject or alter the privacy rules first proposed by Clinton. Armey says he will not wait for the entire “fine-tuning” period, which lasts until April 14, 2003, to pass before taking further action.

According to Newsmax.com, Armey is prepared to launch congressional action to close privacy loopholes and put teeth in the ongoing effort to protect medical records from people who have no business knowing their contents.