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Published: 6/15/05
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Can a National Healthcare Information Network Work?

Recent information submitted to the Department of Health and Human Services by the American Health Information Management Association included an estimate that digitizing health information could save as much as $300 billion in unnecessary expenses. Yet Pauly points out that digitizing clinical and patient records wouldn’t significantly reduce administrative costs, which account for approximately 20 cents of every healthcare dollar. “That’s because most of the administrative costs of insurers don’t come from paying claims, which is what this would be for. It comes from the selling of insurance, the commissions, and the billing costs to the consumers,” he says.

Pauly also notes that, even with the most advanced technology, there’s no way to get rid of the administrative part of healthcare altogether. “People and even physicians get upset about this, but the truth is that although healthcare is about the laying on of hands, a large part of it is transmission and interpretation of data,” he says.

Proponents say electronic records could reduce clinical errors by creating a central repository for patient information, leading to less duplication of services, such as the repetition of tests. But Pauly notes that many tests are duplicated for a reason. “Many tests need to be repeated,” he says. For example, a test done six months ago may need to be updated, or the doctor may not trust the results of a particular lab.

The Privacy Problem
Arnold J. Rosoff, a professor of legal studies and healthcare systems at Wharton, says the ability to monitor the entire country’s health would also create a huge challenge for society. “There are very important things we can do in terms of the spread of disease … but it can also make it possible to invade everybody’s privacy,” Rosoff says.

Maintaining confidential personal information in an age when files can be sent to the other side of the world in a few seconds is tough.
Although HIPAA (Health Insurance Portability and Accountability Act of 1996) guarantees strict handling of sensitive personal information, such clinical uses could present new ethical difficulties for policymakers. While data can be stripped of personal identifiers before being passed on to a national database, “[w]hat happens if a researcher finds a patient at risk for a particular condition?” asks Rosoff. Should the patient be warned, even though it violates their privacy rights? And who should make that decision? “Who do we trust? And under what circumstance do we reconnect the name with that record?”

Maintaining confidential personal information in an age when files can be sent to the other side of the world in a few seconds is tough. The February 2005 disclosure by ChoicePoint, a consumer data broker based in Alpharetta, Ga., that thieves stole the Social Security numbers and credit reports of at least 145,000 people is just the latest in a string of cases that has the public worried about compromised security. It’s also the kind of scenario that has encouraged Congress to pass laws guaranteeing privacy protection for everything from financial transactions to video rental records. Certainly, healthcare records belong on that list, too. “Of all the data that people might not want flying around out there in the ether, their medical records might be number one. I don’t know whether you should worry more about your credit records or your medical records,” says Rosoff.

Despite the risks, privacy rules for electronic health records have been slow to develop. According to an August 14, 2002, Federal Register legislative summary, rules that protect consumers from having their personal information used for marketing without compromising the quality of their care are particularly problematic. For instance, under the Department of Health and Human Services’ 2000 rule that supplemented the 1996 HIPPA act, some commentators argued that healthcare providers would not be able to send patients general newsletters about their conditions because that could be construed as marketing. Such lines are difficult to draw. Is a reminder to refill a prescription an act of marketing when it’s a telephone call from the pharmacist? How about when it’s a postcard from the pharmaceutical company that made the drug?

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