The health insurance industry, however, sees more problems with the new rules than just costs. Chip Kahn, president of Health Insurance Association of America, in a statement released the same day as the new rules noted that confidentiality requirements vary dramatically from one state to another. He said that companies working across state boundaries will need to accommodate both the new Federal rules and the varying state laws. According to Kahn’s statement, “Varying state confidentiality standards also could directly affect consumers by impeding the flow of important and potentially life-saving medical information, thereby making it difficult for some consumers to receive necessary health care.”
Kahn also noted that when records are shared among trading partners – between an insurance company and hospital, for example – no single organization has complete control over their disclosure. As a result, companies can find themselves responsible for the actions of other parties over which they have no control.
Whether the new rules will survive a review by the incoming Bush administration is another open question. The New York Times in its December 21 edition quoted Mary R. Grealy, the president of the Health Care Leadership Council, an association of 50 chief executives from large health care companies, who said: "We definitely will be working with the new administration to seek a more balanced approach to protecting privacy. We are sending papers to the Bush transition team."
But the impact of these rules could be felt well outside the health care field. Free-speech and privacy advocates such as the Center for Democracy and Technology and Electronic Privacy Information Center that work for greater protections for individuals are supporting the new rules, and likely to find precedents in them to use elsewhere.
Also, the privacy issue has supporters on both sides of the political aisle in Washington. Earlier this month, when a Washington Post article mentioned a new Web specification for collecting customer data, Senator Richard Shelby a conservative Republican of Alabama asked the Federal Trade Commission to investigate the potential for harm to consumers.
In his letter to the chairman of the FTC, Shelby said, “While this effort is intended to enhance commercial activity, I am troubled that insufficient attention has been given to the negative ramifications that the use of this exchange will have on the privacy of American consumers. When this standard is put in practice, the personal information of hundreds of millions of Americans will be readily and widely available.”
