Introduction

The most sensitive aspect of information policy for individuals will become medical information as geneticists unravel the human genome and interpret its meaning. Fearing possible discrimination, most individuals will strongly desire the right to control access to his or her genetic information. But, in regard to obtaining medical insurance, privacy concerning genetic information is equivalent to pooling genetic risk. Medical information policy must resolve a fundamental conflict among privacy, efficiency and equity.

A factor that has exacerbated this conflict has been the advent of third party medical payments. Before medical insurance, when individuals paid their own medical bills, access patient's medical information was restricted to the medical practitioners working on his or her case. With the advent of third party medical payments by insurance firms, self-insured firms and government, these third parties have gained access to a patient's medical information in order to pay the bills. As medical information becomes increasingly maintained in electronic form and includes more and more sensitive information such as an individuals interpreted genetic code and need for security of medical system information will greatly increase. Also, the issue of who should have access to what type of medical information needs to be addressed.

As was pointed out in the previous chapter, we propose to decentralize information policy to the states as much as possible. In the case of medicine it would be more effective to decentralize medical policy in general than just medical information policy. The information aspects of medical policy can not be neatly separated from the rest of medical policy. As was pointed out privacy in the sense of being able to control the release of medical information is equivalent to pooling the risk concerning that type of medical information when buying medical insurance.

Also, it is currently impossible for self-insured firms to separate hiring decisions from controlling medical costs from an economic perspective. While self-insured firms frequently use an insurance firm to process the medical paperwork, self-insured firms pay all the bills themselves. Thus medical costs are directly impact the bottom line. Self-insured firms have strong economic incentives to hire and keep healthy workers. Restricting self-insured firms access to medical information of potential employees is equivalent to requiring such firms to pool the medical risk. For example, it is currently proposed that obtaining genetic information without a person's permission should be a felony. Nevertheless, if inexpensive genetic testing equipment is created, such laws may not enforced against firms that contribute heavily to political parties. Surreptitious genetic testing could become widespread. Try to prevent such action by use of antidiscrimination laws would also be very difficult because firms will claim they hire the best person out of a large pool of applicants.

If medical policy in general were decentralized, states would have many more alternatives to address this problem. One might be to separate medical decisions from employment decisions by having firms pay employees wages or salaries that include the value of fringe benefits and transfer the responsibility of obtaining benefits to the employees. The decision of an insurance firm to accept or reject an individual for medical insurance is observable and much more controllable than when the decision is part of a larger employment-medical insurance decision. To decentralize medical policy concerning self-insuring firms to the states would require revising ERESA which places self-insuring firms above state law.

As there is a vast chasm between liberals and conservatives concerning desirable medical policy decentralization would result in numerous alternatives being implemented and lead to long term progress in medical policy and a better resolution between medical privacy and medical efficiency. The federal government would have to create the framework such as allowing states to offer medical savings accounts.

Since the focus of this book is information policy we shall only consider those aspects of medical policy which can not be separated from information policy. This will provide us with many more alternatives than trying to rely solely on information policy to resolve conflicts among privacy, efficiency and innovation. To consider medical information in the context of greater medical policy the first step is to examine the relationship between medical information and efficiency.