Citizens' Council on Health Care
CCHC HEALTH eNEWS
Tuesday, July 31, 2001


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Providing news and commentary on health care policy,
health insurance issues, and medical confidentiality.
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* DEATHS FROM MEDICAL ERRORS MAY HAVE BEEN OVERSTATED

* TEENY TINY IDENTITY CHIP MAY POSE PRIVACY PROBLEM

* SUING HMOs WILL CARRY A PRICE

* BRITISH ARMY VOLUNTEERS TO BE MICROCHIPPED

* REP. RON PAUL INTRODUCES PATIENT PRIVACY ACT

* MOST STATES INCLUDE HEALTH INFORMATION IN BANKING RULES

* CLUELESS ABOUT THE COST OF HIPAA PRIVACY RULES

* CONGRESSIONAL SUBCOMMITTEE PASSES HUMAN CLONING BAN

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DEATHS FROM MEDICAL ERRORS MAY HAVE BEEN OVERSTATED

Two years ago, a report from the Institute of Medicine ignited a
major debate by stating that medical mistakes in hospitals kill
up to 98,000 Americans a year. Now a new study, published in
today's Journal of the American Medical Association, disputes
that figure and places such deaths at 5,000 to 15,000 a year.

o The most recent research -- led by Rodney A. Hayward of
the Veterans Affairs Center for Practice Management and
Outcomes Research in Ann Arbor -- faults the earlier study
for too little consensus among the doctors consulted on
what constitutes a deadly error.

o The previous study identified such mistakes as
prescription drug errors and misused or malfunctioning
equipment.

o Hayward says his researchers found widely varying opinions
among doctors on whether an error directly led to death --
and even on what constituted an error.

o The Ann Arbor team estimated that only 0.5 percent of
patients they studied would have lived at least three
months in good health if care had been optimal.

But Lucian L. Leape of the Harvard School of Public Health, co-
author of the Institute of Medicine report, defends his findings
and says that Hayward's conclusions were based on too small a
sample of patients and were derived by way of "statistical
torturing."

The issue is an important one since, in the wake of the first
report, hospitals nationwide instituted new protections -- such
as new computer programs -- to catch errors.

Source: Associated Press, "Medical-Error Reports in Dispute,"
Washington Times, July 25, 2001; based on Rodney A. Hayward and
Timothy P. Hofer, "Estimating Hospital Deaths Due to Medical
Errors: Preventability Is in the Eye of the Reviewer," Journal
of the American Medical Association, July 25, 2001.

For JAMA text
http://jama.ama-assn.org/issues/v286n4/rfull/joc02235.html

Source: Taken directly from the Daily Policy Digest, National Center for Policy Analysis, July 25, 2001. http://www.ncpa.org


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TEENY TINY IDENTITY CHIP MAY POSE PRIVACY PROBLEM

Hitachi, Ltd just announced the development of the world's
smallest RFID integrated circuit chip called the "meu-chip."
The Hitachi press release states that the chip is small
enough to be embedded in paper, wireless accessible and
only 0.4 mm square.The chip is currently readable only and
not rewritable, making it resistant to tampering.

The meu-chip is the newest addition to Hitachi's product line
for the worldwide smart card industry.

According to ZDNet, a British publication reporting on the
announcement, other chips are several millimetres on each
side. Privacy experts note that governments and corporation
may like the technology possibilities to track products and
monitoring cash flow, but say that democracies will never agree
to placing the chip in currency because of the ire it would
raise with the public.

According to Simon Davies, head of Privacy International:"What
you could achieve with a chip like this is to ensure that
surveillance becomes invisible...If you really could track
things in such an unobtrusive manner than anything an individual
does can theoretically be captured."

Hitachi will establish an in-house venture company, "Meu-
Solutions" to promote the chip, starting July 1, 2001.

Sources: "World's smallest RFID IC, the 'meu-chip'," Hitachi
Press Release, June 28, 2001. http://global.hitachi.com/New/cnews/E/2001/0628/index.html
"Hitachi weaves chip into paper money," Matthew Broersma, ZDNet,
July 3, 2001. http://news.zdnet.co.uk/zdnetuk/news/story/0,,s2090580,00.html

-Citizens' Council on Health Care
-7/31/01


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SUING HMOs WILL CARRY A PRICE

If it is eventually passed and signed into law, the patients'
bill of rights would remove restrictions against individuals
filing suits against their health maintenance organizations if
they think they have been denied needed medical care and suffered
as a result.

But such suits are bound to carry a price tag, experts point out.

o First, the threat of such suits will cause HMOs to provide
more medical services -- which will ultimately drive up
premiums and the cost of co-payments, and will also lower
cash wages.

o Studies show that reductions in liability pressure --
through, for example, reasonable caps on noneconomic
damages -- lead to lower health care costs, but not to
worse health outcomes for patients.

o The Congressional Budget Office has estimated that
expanding liability in an earlier version of the patients'
bill of rights would increase premiums by 0.8 percent --
although adding in the costs of defensive medicine would
likely push that figure far higher.

o Research based on data from the 1990s shows that reforms
such as caps on damages lead to hospital expenditures for
elderly patients with heart disease that are at least 4
percent lower.

If an unlimited right to sue health plans leads to as much
defensive medicine as does the unlimited right to sue doctors and
hospitals, then the bill could lead to liability costs that are
at least five times larger than the current CBO estimate, experts
warn.

Source: Daniel P. Kessler (Stanford Business School), "Want to
Sue HMOs? It'll Cost You" Wall Street Journal, July 25, 2001.

For text Quality of Care and Patient Protection
http://www.ncpa.org/pi/health/hedex2b.html

Source: Taken directly from the Daily Policy Digest, National Center for Policy Analysis, July 27, 2001. http://www.ncpa.org


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BRITISH ARMY VOLUNTEERS TO BE MICROCHIPPED
>From Biometrics Digest, July 25, 2001
In a trial believed to be a world first, a cross-section of soldiers have
allowed themselves to be micro-chipped as part of a study into how new
technology may be harnessed to revolutionize the bureaucracy of personal
administration. All the troops involved in the project are volunteers.
Impetus for phase one of the Army Personnel Rationalization Individual
Listings project came from the acclaimed Passports for Pets scheme, from
which much of the technology has been adapted. The trial, which began at the
start of April, 2001, is to run for six months. Should it be the success
which project managers anticipate, the whole of the Army could be
micro-chipped by 2010.

Source: Taken directly from the COALITION FOR CONSTITUTIONAL
LIBERTIES,Center for Technology Policy of the Free Congress
Foundation, 7/26/01


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REP. RON PAUL INTRODUCES PATIENT PRIVACY ACT


THE PATIENT PRIVACY ACT -- HON. RON PAUL
(Extensions of Remarks - July 24, 2001)
[Page: E1417] GPO's PDF

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HON. RON PAUL
OF TEXAS
IN THE HOUSE OF REPRESENTATIVES
Tuesday, July 24, 2001

Mr. PAUL. Mr. Speaker, I rise to introduce the Patient Privacy Act, which
repeals those sections of the Health Insurance Portability and Accountability Act of 1996 authorizing the establishment of a ``standard unique health care identifier'' for all Americans, as well as prohibiting the use of federal funds to develop or implement a database containing personal health information.

Establishment of such a medical identifier, especially when combined with HHS's misnamed ``federal privacy'' regulations, would allow federal bureaucrats to track every citizen's medical history from cradle to grave. Furthermore, it is possible that every medical professional, hospital, and Health Maintenance Organization (HMO) in the country would be able to access an individual citizens' record simply by entering the patient's identifier into a health care database.

When the scheme to assign every American a unique medical identifier became
public knowledge in 1998, their was a tremendous outcry from the public.
Congress responded to the public outrage by including language forbidding the expenditure of funds to implement or develop a medical identifier in the federal budget for the past three fiscal years. Last year my amendment prohibiting the use of funds to develop or implement a medical ID unanimously passed the House of Representatives.

It should be clear to every member of Congress that the American public does not want a uniform medical identifier. Therefore, rather than continuing to extend the prohibition on funding for another year, Congress should simply repeal the authorization of the national medical ID this year.

As an OB/GYN-with more than 30 years experience in private practice, I know
better than most the importance of preserving the sanctity of the
physician-patient relationship. Oftentimes, effective treatment depends on a patient's ability to place absolute trust in his or her doctor. What will happen to that trust when patients know that any and all information given their doctor will be placed in a data base accessible by anyone who knows the patient's ``unique personal identifier?''

I ask my colleagues, how comfortable would you be confiding any emotional
problem, or even an embarrassing physical problem like impotence, to your
doctor if you knew that this information could be easily accessed by friend, foe, possible employers, coworkers, HMOs, and government agents?

Many of my colleagues will admit that the American people have good reason to fear a government-mandated health ID card, but they will claim such problems can be ``fixed'' by additional legislation restricting the use of the identifier and forbidding all but certain designated persons to access those records.

This argument has two flaws. First of all, history has shown that attempts to protect the privacy of information collected by, or at the command, of the government are ineffective at protecting citizens from the prying eyes of government officials. I ask my colleagues to think of the numerous cases of IRS abuses that were brought to our attention in the past few months, the history of abuse of FBI files, and the case of a Medicaid clerk in Maryland who accessed a computerized database and sold patient names to an HMO. These are just some of many examples that show that the only effective way to protect privacy is to forbid the government from assigning a unique number to any citizen.

The second, and most important reason, legislation ``protecting'' the unique health identifier is insufficient is that the federal government lacks any constitutional authority to force citizens to adopt a universal health identifier, or force citizens to divulge their personal health information to the government, regardless of any attached ``privacy protections.'' Any federal action that oversteps constitutional limitations violates liberty as it ratifies the principle that the federal government, not the Constitution, is the ultimate arbitrator of its own jurisdiction over the people. The only effective protection of the rights of citizens is for congress and the American people to follow Thomas Jefferson's advice and ``bind (the federal government) down with the chains of the constitution.''

Those who claim that the Patient Privacy act would interfere with the plans to ``simplify'' and ``streamline'' the health care system, should remember that under the constitution, the rights of people should never take a backseat to the convenience of the government or politically powerful industries like HMOs.

Mr. Speaker, the federal government has no authority to endanger the privacy of personal medical information by forcing all citizens to adopt a uniform health identifier for use in a national data base. A uniform health ID endangers constitutional liberties, threatens the doctor-patient relationships, and could allow federal officials access to deeply personal medical information. There can be no justification for risking the rights of private citizens. I therefore urge my colleagues to join me in supporting the Patient Privacy Act.

Source: Rep. Ron Paul's website: http://www.house.gov/paul/congrec/congrec2001/cr072401.htm


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MOST STATES INCLUDE HEALTH INFORMATION IN GLB RULES

The vast majority of states have enacted laws or implemented
regulations to comply with the privacy provisions of the
Gramm-Leach-Bliley Act (GLBA), the National Assn. of Insurance Commissioners (NAIC) reported in
July.

Of the 43 states that have taken action, 15 adopted the NAIC
model GLBA privacy provisions, which also encompasses health
information. As a result, a total of 33 states and the District
of Columbia have provisions governing health privacy in the
insurance and financial services arena, according to Health
Information Privacy Alert.

Source: PRIVACYSECURITYNETWORK, Site Update for the week of
July 23, 2001


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PROSPECTIVE PAYMENT SYSTEM USES HHS FIGURES FOR PRIVACY RULE

Determining the real price tag for HIPAA compliance has been
contentious at best. The government estimate of $17 billion
over 10 years stands in stark contrast to the $43 billion over
five years projected by the Blue Cross Blue Shield Assn. For
now the government estimate appears to be winning. Lacking any
better data, the Medicare Payment Advisory Commission (MedPAC)
adopted HHS's estimates in recommending changes to the hospital
inpatient prospective payment system.

A final rule issued May 5 by HCFA (now CMS) concluded that a
one-time adjustment of 0.5% should be reflected in the FY 2002
payment update. A MedPAC official told Health Information Privacy
Alert that people should not read anything into the recommendation.

The commission took note of the estimates by the Blue Cross
Blue Shield Association as well, but opted to use the government's
numbers. "We really don't know what the actual number is," he said.

Source: PRIVACYSECURITYNETWORK, Site Update for the week of
July 23, 2001


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CONGRESSIONAL SUBCOMMITTEE PASSES BILL TO BAN ALL HUMAN CLONING

On July 19, 2001, the Crime Subcommittee of the House Judiciary
Committee by voice vote approved a bill that would place a complete
ban on human cloning for any purpose. Authored by Rep. Dave Weldon
(R-FL) the "Human Cloning Prohibition Act of 2001 defines "human
cloning" as reproduction in which the nucleus of an adult human
cell is placed into a human egg cell whose nucleus has been removed,
producing a genetic replica of the adult.

The bill would allow cloning techniques that do not produce humans
or human embryos, but do produce other tissues and organs, including
molecules and DNA. Plants and animals could continue to be cloned.
Opponents decried the bill as outlawing cloning that could produce
embryos for research.

Penalties for cloning or attempting to clone humans and human embryos
would be 10 years in prison and civil penalties of at least $1 million
if the bill becomes law in its present form.

Full Judiciary Committee vote is pending.

Source: "Congressional Subcommittee Passes Human Cloning Ban," Steve
Ertelt, Pro-Life Infonet, July 21, 2001.

-Citizens' Council on Health Care
-7/31/01

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