This website provides readers an historical perspective on the evolution of various healthcare laws and regulations affecting healthcare freedom and privacy.
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Health Freedom Watch
March 2005

Contents:


Why the Right to Contract Privately Must Be Upheld

The seriousness and tragedy of the Terri Schiavo case raises the critically important question of who should determine one's health-care matters. Nearly everyone agrees that Terri's wishes should be honored. The problem is we don't know what her wishes truly are. This has led to much ambiguity and legal wrestling, and enormous heartache amongst a family that cares deeply for their loved one.

The case has heightened national awareness of the need for living wills. It also highlights the critical need for citizens-especially the elderly-to be free to pay privately for health-care services. In Canada, it is illegal to pay privately for services covered under the government health-care program. The United States' Medicare Part B program (which covers outpatient doctor services) also limits citizens' freedom to pay privately, because it penalizes doctors who accept private payment for Medicare-covered services.

The only way to ensure that the "collective good" won't be making seniors' personal health-care decisions is to uphold their right to contract privately for the services of their choice.

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Most Americans Are Uninformed about Plans for a National Electronic Medical Records (EMRs) System

A recent Harris Interactive survey found that most Americans are unaware of plans to establish a nationwide integrated system of electronic medical records (EMRs). Only 29 percent of those surveyed said they had read or heard about the effort to create the national system over the next few years.

Even so, a solid majority are somewhat or very concerned about privacy and security in an EMRs system. According to the national survey:

  • 70 percent are very or somewhat concerned that sensitive medical information might be leaked because of weak data security.

  • 69 percent are very or somewhat concerned that there could be more sharing of medical information without patients' knowledge.

  • 65 percent are very or somewhat concerned that some people will not disclose sensitive but necessary information to doctors and other health-care providers because of worries that it will go into computerized records.

When those surveyed were asked if they believe their medical information had been disclosed improperly, some 14 percent (representing 30 million U.S. adults) said yes (down from 27 percent in 1993). The survey also found that the public is evenly divided about the assertion that the benefits of EMRs outweigh privacy risks: 48 percent accept that claim, while 47 percent reject it.

In considering these responses, it is important to consider that the American public has been misled about the new federal medical-privacy rule. Jim Pyles, the attorney who recently challenged the rule in the U.S. Court of Appeals for the Third Circuit (as discussed below) says, "The survey also shows that most members of the public do not understand that the Privacy Rule grants federal authority for the routine use and disclosure of their health information against their will. Based on the other concerns reflected in the survey, I think we have a good idea of how they would feel about that if they understood it."

Are the vast majority of Americans truly supportive of and ready for a nationally linked EMRs system? Not according to the national survey. The country is almost evenly split, even before being thoroughly informed of how truly weak the existing federal medical-privacy rule is.

Sources: National Committee on Vital and Health Statistics, Subcommittee on Privacy and Confidentiality, website links:

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Why I'm Staying Optimistic about Health Privacy
by Sue Blevins

It's so tempting to become cynical when one considers the many unjust and downright disgraceful games that are played in Washington. If I hadn't been carefully tracking the issue myself since 1999, I don't think I'd believe that a so-called federal privacy rule could actually legalize unconsented access to people's health information. It's astonishing how things can be labeled the opposite of what they are and then pushed on the American public-against their will-by large lobbying groups. If a natural-supplements company had provided such misleading information, it probably would have been shut down and those responsible jailed!

But regardless of the injustices and misleading propaganda about this medical-privacy rule, I'm staying optimistic and here is why:

The American Public Wants Privacy

The good news is that the American public still wants medical privacy. Poll after poll shows this. That is why the large lobbying groups that want to gather and use people's health information, without first obtaining their consent, have had to resort to the federal government to create a give-me-unfettered-access-to-health-data rule they know would never fly in the free market. We can view the cup as half-empty by focusing on the fact that we've had forced on us a rule we don't want. (Of course, most Americans don't know their privacy has been taken away, because they are continually misled by government and special-interest groups.) But the cup-is-half-full view is this: that government and industry have to lie proves that the public doesn't want to give up its health privacy!

A Lie Can't Last Forever

Another reason I'm optimistic is that I truly believe that a lie can't last forever. I am convinced that sooner or later the public will become informed about how the rule actually does the opposite of what it purports to do. When sensitive health data gets leaked, people are going to wonder how it happened. That's when they'll dig deeply and discover the truth about the lack of medical privacy (defined as the ability to keep one's information confidential and determine for oneself if others can have access to it). That is why true privacy advocates must continue to tell the truth about how the federal rule fails to assure confidentiality of health matters.

Lawsuit Challenges the Rule

A lawsuit challenging the misnamed federal medical-privacy rule could help expose the truth about it. Attorney Jim Pyles recently argued a case (Citizens for Health v. Tommy Thompson) on behalf of several organizations and privacy advocates, in the U.S. Court of Appeals for the Third Circuit in Philadelphia. According to the Philadelphia Inquirer, during the appeal the judges became informed about how "The amended rule.rescinded the consent requirement, meaning that in 'routine' matters, patient permission was no longer needed for private records to be shared with doctors, dentists, hospitals, HMOs, insurance companies, billing firms and others. Records include test results, diagnoses, physicians' notes and other information, some of it embarrassing and all of it intensely personal." The Inquirer reported that two of the judges "worried aloud that just about anything could be construed as [related to] payment, treatment and health-care operations-and thus could be shared." (See http://www.philly.com/mld/inquirer/news/nation/11094851.htm. Note: This site requires readers to obtain a password.)

All the judges have to do is to read the rule in its entirety and they'll see that it doesn't guarantee true medical privacy. (The rule doesn't even define the term.) The judges could declare the rule unconstitutional. Additionally, the court record will provide evidence that the government has been misleading Americans about the federal medical-privacy rule.

Consider, for example, the U.S. Department of Health and Human Services Office for Civil Rights "fact sheet" about health privacy. Titled "Your Health Information Privacy Rights," the so-called fact sheet states "You have privacy rights under a federal law that protects your health information." (See http://www.hhs.gov/ocr/hipaa/consumer_rights.pdf.) But how can a federal rule granting more than 600,000 insurers, doctors, data-processing companies, and many others access to patients' records (without their consent) be considered protective of privacy rights? In an honest and just world, it couldn't. And with judges exposing the truth about the rule, the deception might end sooner rather than later. I'm staying optimistic.

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National Health Spending Trends for 2004-2014

Government Spending to Grow, Private Spending to Slow, and More Seniors to Enroll in Managed Care

National health expenditures are expected to grow to more than $3.5 trillion in 2014, up from $1.8 trillion in 2004, according to a recent Health Affairs article and projections from the Office of the Actuary, Centers for Medicare and Medicaid Services (CMS). That amounts to approximately $11,045 per capita (in an estimated population of 324.6 million), an increase from $6,039 in 2004.

Increase in Public-Sector Spending Growth

The Health Affairs article, titled "U.S. Health Spending Projections for 2004-2014," projects faster growth in public-sector spending on health care. The article reported these significant findings (quoting):

  • By 2014, total health spending is projected to constitute 18.7 percent of gross domestic product, from 15.3 percent in 2003.

  • The faster public-sector spending growth is exemplified by the introduction of the new Medicare drug benefit [which takes effect in 2006]. While this benefit is anticipated to have only a minor impact on overall health spending, it will result in a significant shift in funding from private payers and Medicaid to Medicare.

  • In part because of this funding shift, our projection calls for public funding of health care to exceed 49 percent by the end of the projection period-a record share that could have important implications for the budget as a whole.

Decrease in Private-Sector Spending Growth

Meanwhile, growth in private health care and insurance is expected to slow from 9.9 percent in 2003 to 7.7 percent in 2004. The article explains (again quoting):

  • Two major factors contribute to this deceleration. First, growth in the underlying costs of health benefits per enrollee is projected to slow from 8.9 percent in 2003 to 7.7 percent in 2004. Second, a modest downturn in the private health insurance underwriting cycle appears to be under way.

  • Private health insurance has historically exhibited a cyclical pattern, known as the underwriting cycle, in which growth in premiums first undershoots, and then overshoots, growth in the underlying medical trend.

  • Factors influencing this predicted turnabout are pressures on Blue Cross/Blue Shield plans from state regulators in the face of rising reserves.

  • We assume that the take-up of health savings accounts (HSAs) will be gradual and that further increases in all forms of cost sharing will continue at a pace similar to that of the last few years.

Increase in Medicare Managed-Care Enrollment

Finally, the Health Affairs article points out that the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003 legislated payment increases to managed-care plans in 2004 and 2005. Quoting again:

  • Our forecast assumes a shift in enrollment from traditional fee-for-service (FFS) Medicare to MA plans [Medicare Advantage plans, formerly Medicare+Choice].

  • MA enrollees are expected to constitute about 30 percent of total Medicare enrollees by 2014, compared with 12 percent in 2003.

Sources:

  • "U.S. Health Spending Projections for 2004-2014," Health Affairs, February 23, 2005.
  • "National Health Care Expenditures Projections: 2004-2014," Office of the Actuary, Centers for Medicare and Medicaid Services (CMS).

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Health Freedom Watch is published by the Insitute for Health Freedom. Editor: Sue Blevins; Assistant Editor: Deborah Grady. Copyright 2005 Institute for Health Freedom.