Pros and cons of HIPAA: key benefits and hidden drawbacks

If you’re a healthcare provider or insurer, you already know how important the Health Insurance Portability and Accountability Act, better known as HIPAA, is in the industry. It’s the standard law for protecting the privacy and security of an individual’s protected health information (PHI). PHI refers to data that can identify a patient and relates to their health status, healthcare provision, or payments for healthcare services. 

It was August 21, 1996, when the US Congress enacted HIPAA and President Bill Clinton signed the bill. Originally, the goal was to solve the problem of “job lock,” where individuals felt compelled to stay in a job simply to keep their health insurance coverage. 

Over time, HIPAA evolved into a regulatory framework. Today, it standardizes the electronic transmission of health information, safeguards patient privacy, and promotes security measures. Not only that, but it also improves the portability and accountability of health insurance coverage.

For anyone managing PHI, understanding the pros and cons of HIPAA is key. In this post, we’ll dig into what exactly HIPAA is, exploring where it benefits patients and where it can cause challenges for healthcare providers.

Advantages of HIPAA

Many healthcare organizations recognize the benefits of HIPAA compliance not just for themselves but also for their patients. Yet many also fail to understand the “why” and “how” behind it. Here are some key HIPAA advantages:

• Enhances patient privacy: HIPAA protects patients’ sensitive health information from unauthorized access. It requires healthcare providers to limit PHI access to only those who need it to deliver care. This builds trust between patients and healthcare professionals, making patients feel more at ease when sharing their personal information for diagnosis or treatment.
• Strengthens data security: HIPAA has detailed security requirements such as encryption of electronic records, secure login protocols, and audit trails that monitor access to PHI. Today, many platforms like Jotform come with encrypted HIPAA-friendly form builders, which protect data during transmission and storage, ensuring confidentiality even in a digital environment.
• Standardizes data handling: Before HIPAA, health data transactions were inconsistent and varied widely. HIPAA’s administrative system created uniform code sets and identifiers, which streamline billing and record sharing. This reduces errors and improves processing speed across healthcare systems.
• Ensures legal accountability: HIPAA holds covered entities and business associates legally responsible for protecting PHI. In case of any breach or issue of noncompliance, organizations face steep penalties. This accountability forces healthcare entities to take privacy seriously and invest more in security measures.
• Supports patient rights: HIPAA empowers patients by granting them rights such as the ability to review their health records, request corrections, and receive notifications in case of data breaches. This transparency helps patients stay informed and in control of their own health data.
• Reduces fraud and abuse: HIPAA’s security and privacy rules help prevent various types of healthcare fraud. For instance, secure authentication measures prevent unauthorized users from fraudulently accessing benefits or submitting false claims. This, as a result, eliminates the risk for identity theft and billing fraud.
• Facilitates secure information sharing: HIPAA ensures that PHI is shared between providers and authorized parties like insurance companies without any leaks. Jotform’s HIPAA compliance features support secure form submissions and data sharing, allowing you to collaborate efficiently.
• Supports digital health innovations: Today’s healthcare system relies on digital tools. HIPAA provides a helpful framework that tech companies use to build HIPAA-friendly apps. These tools help healthcare organizations meet regulatory demands.
• Improves interoperability (to an extent): While HIPAA doesn’t guarantee full system interoperability, it promotes standards like the use of National Provider Identifiers (NPIs) and standardized transaction formats. This helps different healthcare IT systems communicate more effectively.
• Boosts patient confidence: Patients who know their health information is protected are more likely to be open about sensitive issues. This honesty empowers healthcare providers to make better diagnoses and treatment plans.
• Promotes workforce training: HIPAA mandates ongoing training programs to educate staff on data privacy and security. Regular training helps reduce human errors, which in turn can reduce data breaches.
• Creates a regulatory framework for business associates: HIPAA requires third-party vendors who handle PHI, such as billing companies or cloud providers, to implement proper safeguards. This extends the protection network beyond direct healthcare providers.

Disadvantages of HIPAA

While HIPAA has many advantages, especially for patients, it also comes with a set of disadvantages for healthcare organizations. These challenges make understanding the pros and cons of HIPAA even more important.

Here are some key disadvantages from HIPAA that healthcare providers must manage:

• Involves high administrative costs: Proper HIPAA compliance requires healthcare organizations to invest in new technologies and a more skilled workforce. They have to onboard compliance officers and conduct regular risk assessments and audits. These small yet critical changes may come with high costs, forcing organizations to divert resources from patient care to compliance.
• Requires a complex regulatory environment: HIPAA regulations are extensive and sometimes difficult to interpret. This complexity requires dedicated legal and compliance expertise to ensure full adherence, which can overwhelm smaller organizations.
• Slows workflow: The need to verify a patient’s HIPAA consent, restrict data sharing, and follow strict access controls can add more to administrative workflows. This slows down processes like referrals or information exchange, which is extra critical in emergencies.
• Leaves less coverage for emerging technologies: HIPAA primarily regulates covered entities and their business associates, which often excludes consumer health apps, fitness trackers, and other wellness devices. This creates gaps where sensitive health data on popular platforms may lack proper protections.
• Involves innovation barriers: Strict compliance requirements may prevent startups or developers from rapidly deploying new healthcare technologies. The constant fear of violating HIPAA rules may slow down progress in digital health innovation.
• Creates a burden on small practices: Smaller healthcare providers often lack the personnel or financial resources to fully implement and maintain HIPAA compliance programs. This can cause operational strain or even lead to unintentional violations.
• Restricts information sharing: HIPAA sometimes restricts the sharing of patient information, even when it might be beneficial for care coordination. This can result in fragmented care or delays if proper authorizations are not quickly obtained.
• Requires heavy documentation requirements: HIPAA mandates documenting policies, training sessions, risk analyses, and incidents. These requirements can add considerable paperwork and administrative overhead for staff.
• Necessitates ongoing training demands: As HIPAA rules and technologies evolve, organizations must continually update their staff training programs, which can create ongoing time and cost commitments.
• Lacks absolute data protection: Despite safeguards, healthcare organizations remain targets for cyberattacks. For example, ransomware and phishing attempts continue to compromise PHI. While HIPAA does reduce the risks, it does not completely eliminate them.
• Creates patient dissatisfaction: Patients may feel frustrated by HIPAA’s restrictions if they experience delays in accessing their own data. Some patients can also feel that care providers are being overly cautious in sharing information. 
• Allows conflicts with other laws: Healthcare organizations often struggle to navigate conflicts between HIPAA and state privacy laws or emerging regulations like GDPR. This creates complications, especially in multi-jurisdictional contexts.

As a healthcare administrator or compliance officer, you must weigh the various pros and cons of HIPAA to make informed compliance decisions. 

What HIPAA doesn’t do

HIPAA provides necessary protection to patients and healthcare organizations, but there are some aspects of health data security that it doesn’t cover. The following are a few HIPAA limitations:

No “recalling” shared data

Once PHI has been shared according to HIPAA rules, there is no mechanism within HIPAA to retract or “unsend” that information. 

For example, suppose a patient’s medical records are securely transmitted to a specialist or insurer. In that case, the sender cannot later demand the deletion or return of that data from the recipient’s system. This means healthcare providers must carefully consider when and how PHI is shared to avoid unintended consequences.

No universal interoperability

HIPAA establishes standards for certain aspects of electronic transactions, but it doesn’t guarantee full interoperability of healthcare information systems. In practice, this means different electronic health record (EHR) platforms may still struggle to seamlessly exchange data due to variations in software, data formats, or technical infrastructure. 

This lack of universal interoperability can create barriers to efficient data sharing and comprehensive patient care coordination.

Limited protection scope: Covered entities and business associates only

HIPAA’s protections only apply to covered entities, which includes healthcare providers, health plan companies, and healthcare clearinghouses, along with their business associates who handle PHI on their behalf. 

However, if they don’t fall under these categories, the law doesn’t cover health-related apps or services that patients might use, such as mobile health applications, wearable fitness trackers, or wellness platforms. This means that sensitive health information collected outside traditional healthcare settings might not be subject to HIPAA’s privacy and security safeguards.

Exclusion of health-adjacent technologies

HIPAA does not govern many consumer health technologies like trackers and smartwatches, which collect personal health data. Although these tools can gather significant amounts of information, they usually operate under less stringent privacy laws or user agreements rather than HIPAA regulations. 

No absolute guarantee of data security

Despite HIPAA’s detailed security rules and compliance requirements, it cannot guarantee that data breaches or leaks will never happen. Cybersecurity threats, such as ransomware attacks, phishing scams, insider breaches, or human errors, still pose risks to PHI security in healthcare organizations.

Yes, HIPAA compliance lowers the risk of breaches, but it does not eliminate them entirely.

Balance compliance rigor and workflow efficiency with Jotform

HIPAA lays out critical privacy, security, and legal frameworks to protect patient health information and standardize healthcare data management. Yet, as with any regulation, it introduces administrative burdens and coverage gaps that challenge organizations to stay compliant without sacrificing workflow efficiency.

Healthcare providers and administrators benefit most from this law when they properly understand the pros and cons of HIPAA. They must establish a culture that naturally evolves with ongoing training and policy reviews.

If you’re hesitant, tools that enable HIPAA compliance, like Jotform, are here to help. These tools streamline PHI capture and sharing processes while maintaining necessary safeguards.

With Jotform, you get a wide range of HIPAA-friendly features. Patients can make safe online payments through payment processors like Square, Stripe, and Authorize.net. They can also sign documents digitally and easily upload documents or images through forms. You can even create a HIPAA-friendly form for social media and other digital channels.

On top of that, Jotform Tables enables healthcare providers to store, organize, and manage critical data in a HIPAA-friendly online database. You can also generate live reports via Jotform Report Builder.

Sound great? Sign up on Jotform now to enable compliance with HIPAA without disrupting your administrative workflow.