Standards for Privacy of Individually Identifiable Health Information. Final Privacy Rule Preamble.. Notes:


33 Janlori Goldman, Institute for Health Care Research and Policy, Georgetown University: <>.

34 The proposed privacy rule provided an estimate for a five-year period. However, the Transactions Rule provided a cost estimate for a ten year period. The decision was made to provide the final privacy estimates in a ten year period so that it would be possible to compare the costs and benefits of the two regulations.

35 This based on a seven percent real discount rate, explained in OMB Circular A-94, and a projected 4.2 percent inflation rate projected over the ten-year period covered by this analysis.

36 The regulatory impact analysis in the Transactions Rule showed a net savings of $29.9 billion (net present value of $19.1 billion in 2002 dollars). The cost estimates included all electronic systems changes that would be necessitated by the HIPAA administrative standards (e.g., security, safeguards, and electronic signatures; eligibility for a health plan; and remittance advice and payment claim status), except privacy. At the time the Transactions Rule was developed, the industry provided estimates for the systems changes in the aggregate. The industry argued that affected parties would seek to make all electronic changes in one effort because that approach would be the most cost-efficient. The Department agreed, and therefore, it "bundled" all the system change cost in the Transactions Rule estimate. Privacy was not included because at the time the Department had not made a decision to develop a privacy rule. As the Department develops other HIPAA administrative simplification standards, there may be additional costs and savings due to the non-electronic components of those regulations, and they will be identified in regulatory impact analyses that accompany those regulations. The Department anticipates that such costs and savings will be relatively small compared to the privacy and Transactions rules. The Department anticipates that the net economic impact of the rules will be a net savings to the health care system.

37 Health spending projections from National Health Expenditure Projections 1998-2008 (January 2000), Health Care Financing Administration, Office of the Actuary, < >.

38 American Association of Health Plans, Code of Conduct;; American Dental Association, Principles of Ethics and Professional Conduct;; American Hospital Association, "Disclosure of Medical Record Information," Management Advisory: Information Management; 1990, AHA: Chicago, IL.; American Medical Association, AMA Policy Finder - Current Opinions Council on Ethical and Judicial Affairs; several documents available through the Policy Finder at; American Psychiatric Association, "APA Outlines Standards Needed to Protect Patient's Medical Records"; Release No. 99-32, May27: 1999;

39 Ibid, Goldman, p. 6.

40 "Practice Briefs," Journal of AHIMA; Harry Rhodes, Joan C. Larson, Association of Health Information Outsourcing Service; January 1999.

41 Ibid, Goldman, p.20.

42 Ibid, Goldman, p.21.

43 "Medical records and privacy: empirical effects of legislation; A memorial to Alice Hersh"; McCarthy, Douglas B; Shatin, Deborah; et al.. Health Service Research: April 1, 1999; No. 1, Vol. 34; p 417. The article details the effects of the Minnesota law conditioning disclosure of protected health information on patient authorization.

44Source Book of Health Insurance Data: 1997-1998, Health Insurance Association of America, 1998. p. 33.

45 "Health plans," for purposes of the regulatory impact and regulatory flexibility analyses, include licensed insurance carriers who sell health products; third party administrators that will have to comply with the regulation for the benefit of the plan sponsor; and self-insured health plans that are at least partially administered by the plan sponsor.

46 Health Care Finance Administration, Office of the Actuary, 2000. Estimates for the national health care expenditure accounts are only available through 2008; hence, we are only able to make the comparison through that year.

47 These estimates were, in part, derived from a report prepared for the Department by the Gartner Group, consultants in health care information technology: "Gartner DHHS Privacy Regulation Study," by Jim Klein and Wes Rishel, submitted to the Office of the Assistant Secretary for Policy and Evaluation on October 20, 2000.

48 "Top Compensation in the Healthcare Industry, 1997," Coopers & Lybrand, New York, NY., <>.

49 "A Unifif Survey of Compensation in Financial Services: 2000," July 2000, Unifi Network Survey unit, PriceWaterhouseCoopers LLP and Global HR Solutions LLC, Westport, Ct., <>.

50 The cost for policies for minimum necessary, because they will be distinct and extensive, are presented separately, above.

51 "The Altman Weil 1999 Survey of Law Firm Economics," <>.

52 Equifax-Harris Consumer Privacy Survey, 1994

53Consumer Privacy Survey, Harris-Equifax, 1994, p. vi

54Promoting Health: Protecting Privacy, California Health Care Foundation and Consumers Union, January 1999, p. 12

55Health Information Privacy Survey, Harris-Equifax, 1993, pp 49-50

56 American Cancer Society.

57 American Cancer Society.

58 Polednak, AP. "Estimating Prevalence of Cancer in the United States," Cancer 1997; 8-:136-41.

59 Martin Brown, "The Burden of Illness of Cancer: Economic Cost and Quality of Life." Annual Review of Public Health, 2001:22:91-113.

60Disease-Specific Estimates of Direct and Indirect Costs of Illness and NIH Support: Fiscal Year 2000 Update. Department of Health and Human Services, National Institutes of Health, Office of the Director, February 2000.

61 DALY scores for 10 cancer sites are presented in Brown, "The Burden of Illness of Cancer: Economic Cost and Quality of Life," figure 1.

62 Breast Cancer Information Service.

63 Jack S. Mandel, et al., "Reducing Mortality from Colorectal Cancer by Screening for Fecal Occult Blood," The New England Journal of Medicine, May 13, 1993, Vol. 328, No. 19.

64Promoting Health: Protecting Privacy, California Health Care Foundation and Consumers Union, January 1999, p. 13

65 For example, Roger Detels, M.D., et al., in "Effectiveness of Potent Anti-retroviral Therapy..." JAMA, 1998;280:1497-1503 note the impact of therapy on HIV persons with respect to lengthening the time to development of AIDS, not just delaying death in persons who already have AIDS.

66 John Hornberger et al, "Early treatment with highly active anti-retroviral therapy (HAART) is cost-effective compared to delayed treatment," 12th World AIDS conference, 1998.

67Sexually Transmitted Diseases in America, Kaiser Family Foundation, 1998, p. 12

68 Standard Medical information; see for examples.

69 Substance Abuse and Mental Health Services Administration. Source of data: DP Rice, Costs of Mental Illness (unpublished data).

70 Department of Health and Human Services. Mental Health: A Report of the Surgeon General. Rockville, MD: 1999, p. 408.

71 According to the Surgeon General's Report, 28 percent of the adult population have either a mental or addictive disorder, whether or not they receive services: 19 percent have a mental disorder alone, 6 percent have a substance abuse disorder alone, and 3 percent have both. Subtracting the 3 percent who have both, about three-quarters of the population with either a mental or addictive disorder have a mental disorder and one-quarter have a substance abuse disorder. We assume that this ratio (three-quarter to one-quarter) is the same for the adult population with either a mental or addictive disorder who do not receive services. Thus, we assume that 15 percent of the population have an untreated mental disorder (three-quarters of 20percent) and 5 percent have an untreated addictive disorder (one-quarter of 20 percent).

72 According to the Population Estimates Program, Population Division, U.S. Census Bureau, the U.S. population age 20 and older is 197.1 million on Sept. 1, 2000. This estimate of the adult population is used throughout this section.

73 The number of adults with mental illness is calculated by multiplying the U.S. Census Bureau estimate of the U.S. adult population - 197.1 million - by the percent of the adult population with mental illness - 22 percent, according to the Surgeon General's Report on Mental Health, which says that 19 percent of the population have a mental disorder alone and three percent have a mental and substance abuse disorder.

74 "Entities" and "establishments" are synonymous in this analysis.

75 "Entities" and "establishments" are used synonymously in this RFA.

76 "Small governments" were not included in this analysis directly; rather we have included the kinds of institutions within those governments that are likely to incur costs, such as government hospitals and clinics.

77 Entities are the physical location where an enterprise conducts business. An enterprise may conduct business in more than one establishment.

78 Office of Advocacy, U.S. Small Business Administration, from data provided by the Bureau of the Census, Statistics of U.S. Businesses, 1997.

79 Op.cit, 1997

80 Office of Advocacy, U.S. Small Business Administration, from data provided by the Bureau of the Census, Statistics of U.S. Businesses, 1997.

81 Op.cit., 1997

82 Health Care Financing Administration, OSCAR.