Thursday, April 28, 2005
Hungry, Hungry HIPPA
[Meredith Kapushion, "Hungry, hungry HIPAA: when privacy regulations go too far," Fordham Urban Law Journal, November 2004.] (free registration required to view an early version of the article)
The Health Insurance Portability and Accountability Act of 1996, otherwise known as HIPAA, changed the way people interact with the health care industry. While the intended purpose of the act was to protect patient privacy, the unintended consequence is a massive increase in the regulatory burden placed on providers:
HIPAA is not a good deal for patients, the health care industry, or any "covered entity" that has the misfortune to fall within its reach. The advantages of strengthening and simplifying the rules under a uniform standard are gained at the expense of experimentation and competition between states and among providers.
The administrative burdens HIPAA imposes are, at best, a marginal benefit for a small segment of consumers. At its worst, HIPAA imposes costs directly and indirectly on nearly everyone and offers little in return. HIPAA's main agenda of resolving the employer/employee information disclosure problem remains largely unresolved, and HIPAA does nothing to address the underlying agency problem.
In place of a sound policy bolstering privacy protections, HHS has given us a stack of regulations that amount to a costly administrative headache with a number of wealth redistributive effects in tow. Alternatively, we should repeal HIPAA and consider less centralized, more competitive, and more effective options.
[Meredith Kapushion, "Hungry, hungry HIPAA: when privacy regulations go too far," Fordham Urban Law Journal, November 2004.] (free registration required to view an early version of the article)
The Health Insurance Portability and Accountability Act of 1996, otherwise known as HIPAA, changed the way people interact with the health care industry. While the intended purpose of the act was to protect patient privacy, the unintended consequence is a massive increase in the regulatory burden placed on providers:
HIPAA is not a good deal for patients, the health care industry, or any "covered entity" that has the misfortune to fall within its reach. The advantages of strengthening and simplifying the rules under a uniform standard are gained at the expense of experimentation and competition between states and among providers.
The administrative burdens HIPAA imposes are, at best, a marginal benefit for a small segment of consumers. At its worst, HIPAA imposes costs directly and indirectly on nearly everyone and offers little in return. HIPAA's main agenda of resolving the employer/employee information disclosure problem remains largely unresolved, and HIPAA does nothing to address the underlying agency problem.
In place of a sound policy bolstering privacy protections, HHS has given us a stack of regulations that amount to a costly administrative headache with a number of wealth redistributive effects in tow. Alternatively, we should repeal HIPAA and consider less centralized, more competitive, and more effective options.
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