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Health Freedom Watch
June 2007


Health-Privacy Breaches Challenged in State Courts, Feds Continue to Receive Complaints
By Sue Blevins

Even though the Health Insurance Portability and Accountability Act (HIPAA) does not let citizens sue in federal court if their medical privacy is breached, they are using state courts to seek redress for such breaches. So report several law journals and news outlets.

For example, a Utah man is suing a former physician for sharing his personal medical information with a defense attorney—without his [the patient's] consent.  The following excerpts from a 2006 Utah Trial Journal article by Christopher J. Rogers, Esq., summarize this important case:

  • In Sorensen v. Barbuto, the Utah Court of Appeals recently cautioned all physicians to remember that they have a continuing duty of confidentiality to their current and former patients.... I [Christopher J. Rogers] believe the physician’s actions in this case represent extreme conduct….
  • The case: Nicholas Sorensen was insured in [an] automobile accident in 1999 and sustained serious back and head injuries.  For a year and a half after the accident, Dr. John P. Barbuto, a Utah neurologist, treated Sorenson for his injuries.  Sorensen’s medical insurer eventually removed Dr. Barbuto from its approved provider list and Sorensen continued his treatment with another physician.
  • Shortly thereafter, Sorensen filed a personal injury action against the other driver’s liability insurer.  As Sorensen’s previous treating physician, Dr. Barbuto was subpoenaed for trial and produced Sorensen’s medical records.  Trial was initially scheduled for May 2003 but was postponed until October.  At this point, Dr. Barbuto committed his error in judgment. 
  • Dr. Barbuto’s blunder: The origins of Dr. Barbuto’s blunder derive from the fact that he is not only a treating physician but also an often-used defense medical expert.  He is frequently used in litigation because he provides predictable opinions for the defense where he attributes a plaintiff’s problems and personal injuries to psychological or social origins.
  • Several months before trial, “Barbuto engaged in ex parte communications with defense counsel, prepared a ten-page report for defense counsel’s use, and agreed to testify as an expert witness for the defense.”  Now serving as a paid defense expert, Dr. Barbuto changed his previous diagnosis while he was treating Sorensen, and instead “asserted that psychological and social factors contributed to Sorensen’s medical injuries.”
  • As a professional, after reading about Dr. [Barbuto’s] conduct you probably feel an immediate sense of indignation.  Not all of the reprimand should be placed on Dr. Barbuto. Defense attorneys should beware of encouraging such conduct.  Although the temptation exists for physicians to become paid hired guns in litigation and thereby make a substantial profit, it should never interfere with the physician’s ultimate duty of care and confidence to his own patients.

There are two other important medical-privacy cases pending, according to attorney Kirk J. Nahra, as the following excerpts from Privacy Law Watch explain:

  • Herman v. Kratche (Ohio Court of Appeals, 2006 Ohio 5938 [2006]). Results of medical treatment were sent to the human resources department of plaintiff’s employer, despite there being no workers’ compensation claim. The appeals court said the clinic had a fiduciary duty to keep information confidential and breached that duty. The “court rejected the idea that HIPAA ‘circle of confidentiality’ meant there was no unauthorized disclosure.”
  • Acosta v. Byrum (North Carolina Court of Appeals, 638 SE 2d 246, 2006). The court reinstated a claim for intentional infliction of emotional distress against a psychiatrist who allegedly allowed an office manager to have access to psychiatric records that were used to cause harm to the patient. The complaint referred to HIPAA as creating a standard of care for the defendant. The trial court dismissed the claim because HIPAA does not create a private cause of action. However, the appeals court reversed, not because HIPAA creates a private cause of action, but because the court found it appropriate to use HIPAA as creating a standard of care in making claims that the defendant violated a standard of care.

Meanwhile, according to a May 28 National Law Journal article, “For the first time since HIPAA went into effect in 2003, lawyers say, the government is finally putting teeth into a law that has yielded more than 26,000 complaints, but only four convictions.”  The U.S. Department of Health and Human Services is conducting HIPAA compliance audits.  Also, auditors are reviewing patient-record policies and procedures at hospitals and health-care facilities.

What’s more, Privacy Law Watch reported that 250 complaints were referred to the Department of Justice since HIPAA went into effect.  The privacy breaches referred to the department “all involve really bad behavior—activities that are clearly criminal, through HIPAA or otherwise,” according to Nahra.

It’s clear from these recent activities that Americans continue to cherish their health privacy and expect their rights to be upheld. The Institute for Health Freedom has been making clear since 1999 that the so-called federal medical-privacy rule doesn’t guarantee true health-privacy rights and that stronger state privacy laws must be enacted.  These news reports confirm those positions.

Sue A. Blevins is founder and president of the Institute for Health Freedom in Washington, D.C.


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Medicare Drug Benefit Is the Single-Largest Contributor to $50 Trillion Federal Liability

The nation’s financial condition is “worse than is widely understood,” writes David Walker [Comptroller General of the United States]. “Continuing on our current fiscal path would gradually erode, if not suddenly damage, our economy, our standard of living, and ultimately even our domestic tranquility and our national security.” 

Walker estimates the government’s total reported liabilities at $50 trillion, or four times the GDP, up from $20 trillion or two times GDP in 2000. The single largest contributor was the Medicare drug benefit passed in 2003.

Change is imperative: “A government that in our children’s lifetime does nothing more than pay interest on its debt and mail checks to retirees and some of their health providers is unacceptable.”

The average household burden of federal liabilities is 9.5 times median household income.

If no action is taken now, balancing the budget in 2040 could require cutting spending by 60%, or doubling federal taxes. Growth, ending earmarks, stopping the war, and letting tax cuts expire will not be enough.


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What Mitt and Hillary Have in Common
By Michael F. Cannon

As he campaigns for the White House, Mitt Romney has had to tap dance around the health-care reforms he enacted while governor of Massachusetts. The first bit of bad news was that the plan’s cost was higher than predicted. Then it reneged on its commitment to cover the uninsured. But the latest bit of news about “RomneyCare” may require even fancier footwork.

The Left is now thanking Romney for making HillaryCare respectable again.

Jonathan Cohn has an article in the latest New Republic titled “Hillary Was Right,” that helpfully explains similarities between HillaryCare and RomneyCare:

In Washington, at least, praising HillaryCare will get you laughed off the talk shows. But...if you look closely at the proposals experts and officials are tossing around, you may start to recognize some familiar elements....They also envision, as did HillaryCare, a government role in making sure affordable, high-quality plans are made available—typically, by creating (again, like HillaryCare) some sort of purchasing cooperative through which some, if not all, of the population would buy their coverage. That’s true of the plan former Senator John Edwards proposed as part of his presidential campaign a few months ago. It’s true of the plan Senator Ron Wyden introduced in Congress back in December. It’s even true of the plan former Massachusetts Governor Mitt Romney signed into law before leaving office last year—even though Romney has made mocking HillaryCare a staple of his campaign rhetoric as he seeks the Republican presidential nomination.

Cohn does not think the similarities to HillaryCare are a liability. As the title of the article suggests, he is trying to pat Sen. Hillary Clinton (D., N.Y.) on the back for the reform plan she put forward in 1993 and defended until its death in 1994. The fact that a prominent Republican such as Mitt Romney has now embraced Hillary-style government planning strikes Cohn as confirmation that Sen. Clinton was on the right track.

By bundling the tax dollars of six million Massachusetts residents, Mitt Romney may have made the largest contribution yet to Hillary Clinton’s presidential campaign.

Cohn is not even referring to some obscure aspect of RomneyCare that was forced down Romney’s throat by a left-wing legislature—which is how Romney’s defenders have tried to explain away parts of the plan, such as the individual mandate, that are unpopular with conservatives. According to Cohn, the aspect of RomneyCare that most resembles HillaryCare is its very centerpiece, which Romney borrowed from the conservative Heritage Foundation: the health insurance “Connector.”

Cohn is essentially correct. The objective of the “Connector” bureaucracy, as described by Heritage Foundation scholars, reads like an exercise in government planning. The “Connector” is supposed to “reorganiz[e]...a large part of the state’s private insurance system into ‘single market’ structure with uniform rules and a central ‘clearinghouse’ for administering coverage.”

Why, exactly, do we need a new layer of government bureaucracy to do these things? So we will have someplace to buy health insurance? We’re getting along just fine without layering more bureaucracy on our auto insurance. In fact, we already have a connector for both health and auto insurance. It’s called the Internet. Has anyone ever heard of

Why do we need a “Connector” to tell health insurers what to sell and at what price? Those sorts of price controls and mandated benefits are exactly the kind of government planning that is making health insurance so unaffordable. Shouldn’t conservatives be trying to repeal those laws, instead of creating new bureaucracies that will propose, enforce, and defend them?

Aren’t such efforts a distraction from reforms that would reduce government planning? For example, conservatives should be pushing Congress to let individuals and employers purchase coverage from insurers in other states. That would make health insurance more affordable by allowing those purchasers—are you listening, Massachusetts?—to avoid the costly regulations imposed by their own state government. A nationwide market for health insurance would make the Heritage/Romney approach look less like a “Connector” than a “Constrictor.”

If health-insurance markets don’t work as well as they should, it’s because state and federal governments are doing too much planning already. Most importantly, the federal tax code denies workers ownership of their health care dollars and slaps a huge tax penalty on those without job-based coverage. Shouldn’t conservatives be rolling back those government interventions instead of cooking up even more?

If I were advising Sen. Clinton, I would be urging her to boast that her approach to health-care reform enjoys support from conservatives like the Heritage Foundation and Gov. Romney. If I were advising Gov. Romney, I would prescribe a severe case of amnesia and a health-care agenda that actually reduces the role of government.

Source: “What Mitt and Hillary Have in Common,” by Michael F. Cannon, director of health policy studies at the Cato Institute and co-author of Healthy Competition: What’s Holding Back Health Care and How to Free It. Reprinted with permission; this article appeared in National Review on June 5, 2007:

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Health Freedom Watch is published by the Insitute for Health Freedom. Editor: Sue Blevins; Assistant Editor: Deborah Grady. Copyright 2007 Institute for Health Freedom.