Originally signed into law by U.S. President Bill Clinton in 1996, the Health Insurance Portability and Accountability Act (HIPAA) serves two basic purposes: two protect health insurance for workers and their families if the worker loses his or her job, and to establish national standards for the use, storage, transmission and disposal of patient information by covered entities.
Many healthcare providers view HIPAA as being “unnecessary,” adding more work to their already busy day. Under HIPAA, healthcare providers and other covered entities must take certain precautionary measures to protect their patients' data. Granted, following HIPAA requires some extra work on the covered entity’s behalf, but that's a small price to pay for protecting sensitive patient information.
In a 2005 National Consumer Health Privacy Survey (CHCF), 67% of respondents said they were concerned about about the privacy (or lack thereof) of their medical records. While federal laws state that employers can not discriminate job applicants based on medical conditions, this practice is still alive and well in today's society. If an employer discovers an underlying disease or disability in a job applicant's medical records, he or she may deny them the job. This is why medical records should be kept confidential and only used by the healthcare facility and other necessary parties.
Another reason why HIPAA is important for healthcare providers is because it offers protection against lawsuits. If a patient's identify was stolen as a result of improperly stored and/or maintained medical files, he or she could sue the medical practice. Healthcare facilities spend billions of dollars annually on litigation, and while there's no foil-proof way to prevent lawsuits, doctors and medical practice owners can reduce their risk by following the HIPAA Security Rule and Privacy Rule.
HIPAA states that patients can designate whomever they choose to make medical decisions on their behalf. Why is this important? Well, if a patient is admitted to a hospital for critical condition or injury, he or she may have to give someone decision-making power on the fly. Thankfully, HIPAA allows patients to designate as many people as they prefer to make their medical decisions. So if the patient has four children, he or she may give them all equal decision-making powers.
Of course, healthcare practices that know and follow HIPAA will naturally attract more patients. Patients want to know that their sensitive information is safe and protected from prying eyes. If a medical practice knowingly discloses its patients' records to unauthorized sources, few (if any) patients will return.