Fitch Warns Health Care Providers Of HIPAA Negative Impact
18 Sep 2000 8:38 AM
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Fitch-NY-September 18, 2000: Federal legislation designed to regulate the transmission and security of health-related information could cost as much as three to four times that spent on technological upgrades associated with Y2K, according to a report released Friday, Sept. 15 by the international rating agency Fitch. In total, Fitch warns, the Health Insurance Portability and Accountability Act (HIPAA) will have a negative impact on health care providers.
'Health care providers who fail to accurately assess and budget for the significant requirements associated with HIPAA will place themselves at risk for possible financial peril,' said Rebecca C. Lageman, analyst, Fitch. 'This is a wake-up call. Health care organizations need to prepare for HIPAA regulations now, especially those that already find themselves in financial or technological disarray.'
The new Fitch report asserts that the severity of the financial and operational impact will be directly related to the level of disparity between that organization's current information technology (IT), security, and communications system and those required by HIPAA. In order to comply with the health care information electronic transmission regulations, Fitch anticipates that health care systems will need to modify existing systems or purchase new IT systems, hire and retrain staff, and make significant changes to the current processes associated with maintaining patient privacy.
'The government's estimate for costs of HIPAA compliance is $5.8 billion and that is a far too conservative figure,' Lageman said. 'We anticipate costs to be somewhere between three to four times the amount of expenditures required for Y2K, or an amount in excess of $25 billion.'
For a copy of 'HIPAA: Wake-Up Call for Health Care Providers' please visit Fitch's web site at 'www.fitchratings.com' or click on the hyperlink below.
HIPAA: Wake-Up Call for Health Care Providers
Fitch is an international rating agency that provides global capital market investors with the highest quality ratings and research. Dual headquartered in New York and London with a major office in Chicago, Fitch rates entities in 75 countries and has some 1,100 employees in more than 40 local offices worldwide. The agency, which is a combination of Fitch IBCA and Duff & Phelps Credit Rating Co., provides ratings for Financial Institutions, Insurance, Corporates, Structured Finance, Sovereigns and Public Finance Markets worldwide.
Contact: Rebecca C. Lageman 1-212-908-0796 or Jordan R. Melick 1-212-908-0611, New York.
Media Relations: Matt Burkhard 1-212-908-0540, New York. |
