Health-Care Groups Fear Privacy Proposals Could Curtail Their Fund-Raising Efforts

Health-care organizations are worried that their fund-raising efforts could be sharply curtailed by new federal proposals that are designed to protect patients’ privacy.

The proposed regulations, issued by the Department of Health and Human Services, are aimed at restricting the release of medical records and other personal data collected by health-care providers.

Some fund raisers say they are worried not only about the effect on health-care solicitations, but also about the possibility that the rules might set a precedent that could be used to limit the release of other information used in seeking donations.

Under the proposed health-care regulations, medical information could not be shared without a patient’s express authorization, unless it is used in “health-care operations” — that is, for medical treatment, insurance processing, or other purposes related to public health or safety.

The plan specifically bars health organizations from releasing patient information to anyone who plans to use the data for fund raising or marketing promotions — unless patients have signed a release statement that clearly identifies the way in which their personal information will be used. Many fund raisers fear that such a requirement would hamper their ability to seek gifts because few people would sign such releases.

The Department of Health and Human Services has invited comments on the proposal; the deadline is February 17.

Among those objecting to the proposed rules is the National Society of Fund Raising Executives. “These new rules will dramatically affect the way not-for-profit health-care providers are able to use certain information (including name, address, and phone number) in philanthropic fund-rasing efforts,” said a notice the society has sent to its members.

“Even if you are not directly involved in health-care delivery,” the notice said, “you or your organization may want to comment because of the strong potential that the regulations could establish an inappropriate precedent for strict new federal limits on donor prospect research.”

The society plans to file a formal statement urging the government to revise its rules so that fund raisers at health organizations would at least have access to patients’ and clients’ names, addresses, and telephone numbers for the purpose of seeking contributions.

The Association for Healthcare Philanthropy, an organization of 2,800 health-care fund raisers, plans to file a comment stating that fund-raising efforts should be viewed as “health-care operations,” thus allowing development officers access to some basic patient information, said R. Glen Smiley, chairman of the association.

Mr. Smiley, who is also vice president for philanthropy at the Henry Ford Health System, a chain of non-profit hospitals in Detroit, said his own institution has raised $35-million over the past two years, virtually all of it from grateful patients and their families. Many of those donors, he noted, were initially contacted by fund raisers using lists obtained from the institution’s financial department. It routinely provides the names and addresses of thousands of former patients to fund raisers each year.

It is unclear how broadly the proposed regulations would apply.

“The way we read these regulations is that even an organization like the National Easter Seal Society, which provides services to disabled persons, could be barred from sharing a list of members with its own development department,” said Walter Sczudlo, general counsel of the National Society of Fund Raising Executives.

The proposed regulations were published in the November 3 issue of the Federal Register, Pages 59,917-60,065. The full text of the proposals is also available on the Department of Health and Human Services’s Web site ((http://aspe.os.dhhs.gov/admnsimp). Both the Federal Register and the Web site include detailed instructions for filing comments.