Health Insurance Portability and Accountability

Health Insurance Portability and Accountability




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The Health Insurance Portability and Accountability Act (HIPAA)

The act was implemented in 1996 and with three primary goals which include making it easier for people to keep health insurance, safeguard the confidentiality and security of health care information and help the health care industry control administrative costs (Centers for Medicare & Medicaid Services, 1996). Implementation of the Act brought a diverse range of reforms in the health sector. The reforms had positive and negative implications on various parties involved in administration, control and reception of health services. Some of the implications are discussed below;

Implications on health care organizations

This organizations has to incorporate modern technology so as to ensure quick and easy flow of patient information from the health insurance providers to the hospital. This helped reduce the amount of time taken to verify patient payments details using a card number that would be entered in an integrated computer system. Emerald (2012) asserts that technological advances are one of the principal drivers of competition.

  1. Advancement in technology

Insurance covers ensured that hospital bills were well covered and therefore the hospital were able to collect enough money to meet their yearly budgets. More funds brought the incentive to purchase modern equipments to maintain their competitive advantage

  1. Introduction of modern equipments

Information management triggered the need to hire data scientist who would be charged with the responsibility of analyzing, protecting and processing patient’s data. This in turn helped the organization keep track of the effectiveness of their treatment methods therefore, led to improval of services

  1. Job creation

Implications on insurance providers

In reference to one of the primary goals, the aim of HIPAA was to enable people to keep health insurance which could only be attained by lowering the fees (Johnson, Smith & Steinberg, 2005). The high fees limited the low income citizens therefore most insurance were directed to lower their fees

  1. Lowered entry and monthly fees
  2. Lowered fees acted as an attraction that lead to a high number of individuals registering in different insurance firms. As a result most providers have recorded a high gross income in most financial years. This could be attributed to the aspect of economies of scale that involves reduced cost per unit. Higher gross income has enabled the providers cover a higher proportion of patients’ health bill.

    1. Increased gross income
    2. High number of customers led to emergence of new insurance providers and expansion of existing providers through establishing of more branches. All this were aimed at getting closer to the patient and increase competitive advantage

      1. Opening of branches and emergence of new providers
      2. Implications on patients

        Health care organizations are now able to serve patients fully with no fear of unpaid hospital bills. This is beneficial to the common citizens as it ensures that all patients are treated equally and fairly in the hospitals

        1. Better health care
        2. Now patients don’t need to develop a health saving plan or plan fundraisers to raise money to settle hospitals as the health insurance covers this. In some third world countries some people even turn to the internet to raise money to settle hospital bills.

          1. Reduced misery
          2. Normally specialists charge very consultation fees which are not reachable to many people however the act has broken the barrier by ensuring the specialists are paid via the insurance cover.

            1. Ease of access to specialists and consultants
            2. References

              Centers for Medicare & Medicaid Services. (2006). The health insurance portability and accountability act of 1996 (HIPAA). Online at http://www. cms. hhs. gov/hipaa.

              Gunn, P. P., Fremont, A. M., Bottrell, M., Shugarman, L. R., Galegher, J., & Bikson, T. (2004). The health insurance portability and accountability act privacy rule: a practical guide for researchers. Medical care, 321-327.

              Hash, J., Bowen, P., Johnson, A., Smith, C. D., & Steinberg, D. I. (2005). An introductory resource guide for implementing the health insurance portability and accountability act (HIPAA) security rule. US Department of Commerce, Technology Administration, National Institute of Standards and Technology.

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