Bill Clinton's medical "privacy" regulation that President Bush adopted will cost $18 billion over 10 years. Regulators couldn't assign it even 1 cent of measurable benefit.
Critics of the massive new bureaucratic program say it will place enormous financial and paperwork burdens on the health industry, add to patients' costs of medical care and provide less, rather than more, privacy protection.
Patients will feel the impact of this new regulation – which has the binding effect of federal law – in two ways:
Tucked down near the end of a 612-page "preamble" to the new Department of Health and Human Services rule, here's what the Clinton-Gore administration bureaucrats who drafted the regulation say about its estimated costs:
"This Privacy Rule is estimated to produce net costs of $18 billion ... over 10 years (2003-2012).
"The first-year estimate is $3.2 billion (this includes expenditures that may be incurred before the effective date in 2003)."
Federal law requires that any new agency rule of this magnitude – with an annual economic impact of $100 million or more – must be accompanied by a cost-benefit comparative analysis.
This analysis accompanying the new medical-privacy rule reveals that the Clinton-Gore administration ran into serious trouble with both cost and benefit figures.
Those are the identical cost-benefit figures the Bush-Cheney administration inherited when it adopted the Clinton-Gore rule, word for word.
On the cost side, the "preliminary regulatory impact analysis" guessed at far less than half its final estimate. Its original cost projection was $3.8 billion over five years. The new cost estimate is for $18 billion over 10 years.
On the benefit side, the bureaucrats ran into a brick wall. They struggled to explain:
"Measuring both the economic costs and benefits of health-information privacy is difficult.
"Traditionally, privacy has been addressed by state laws, contracts and professional practices and guidelines."
And "benefits are difficult to measure because people conceive of privacy primarily as a right, not a commodity.
"Furthermore, a wide gap appears to exist between what people perceive to be the level of privacy afforded health information about them and what actually occurs with the use of such information today."
And "the benefits of enhanced privacy protections for individually identifiable health information are significant, even though they are hard to quantify.
"... the benefits of improved privacy protection are likely to increase in the future as patients gain trust in health-care practitioners' ability to maintain the confidentiality of their health information."
And the bureaucrats cited "the intangible value of privacy, the security that individuals feel when personal information is kept confidential."
The drafters made no mention of the loss of benefit when patients regard the new rule as fostering even-greater government intrusion upon, and public disclosure of, their personal medical records.
In any event, the regulation-writers threw up their hands at trying to measure actual benefit to be derived from the rule, stating that "there are no reliable means of measuring dollar value of such benefit."
Under the section detailing the rule's impact, the impact analysis notes that it will affect:
The analysis estimates the first-year costs will include:
As part of the overall cost over 10 years, local and state taxpayers will be having the bear a $2.4 billion increase in their tax bills.
Here's where the analysis says some of the 10-year costs of the program will go:
Those were some of the cost-benefit figures included in the medical-privacy rule, drafted during the Clinton-Gore administration and left on Dec. 28, 2000, for the incoming Bush-Cheney administration to kill, amend or adopt.
On direct orders from President Bush, the HHS department on April 12 allowed the rule to be issued without delay.
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