Privacy revisions made to a House bill promoting electronic medical records and other health information technology may forestall a significant loss of support from the healthcare business community.

The House Energy and Commerce Committee is slated to mark up the bill Wednesday. The bipartisan measure, sponsored by Chairman John Dingell (D-Mich.) and ranking member Joe Barton (R-Texas), broadly seeks to advance the use of electronic recordkeeping and information exchanges in the healthcare sector, which is far behind the rest of the economy in the use of IT.

At a Health subcommittee hearing June 4, the panel examined a discussion draft of the Dingell-Barton bill that enjoyed the support of healthcare companies but fell short of the privacy protections sought by advocates. When the subcommittee marked up the legislation on June 25, the privacy protections had been strengthened, threatening the support of healthcare businesses.

In the days leading up to the markup, some of those interests began spreading the word that their support for the bill was in jeopardy. On Tuesday, however, the committee released a new draft that appears to answer industry concerns but could give privacy advocates pause.

For example, under the new language, patients would give their consent only once to healthcare companies that want to access their medical records without identifying information, for purposes approved by the Department of Health and Human Services, such as hospital audits or fraud and abuse investigations.

The previous legislation would have required consent each time such records were accessed — even when stripped of identifying information.

“They did make improvements in those provisions we had some concerns about, so I do feel like we’re making progress,” said Mary Grealy, president of the Healthcare Leadership Council (HLC), an umbrella group of healthcare company CEOs. Just Monday, Grealy wrote Dingell and Barton expressing doubts about the legislation under the auspices of the Confidentiality Coalition, a collection of hospitals, insurers and other interests.

A spokeswoman for Patient Privacy Rights , a leading advocacy organization, said they were still reviewing the legislation and could not comment by press time.

One of the biggest reasons for the lag on health IT policy is concern about protecting the confidentiality of patients’ medical information. Privacy advocates caution that gathering information about people’s health conditions and treatments without implementing adequate safeguards exposes patients to exploitation, such as workplace discrimination or unwanted marketing pitches.

Health IT, including electronic medical records and electronic prescriptions, is a cornerstone of practically every health reform proposal touted in recent memory. Both leading presidential candidates, Sens. John McCain (R-Ariz.) and Barack Obama (D-Ill.), highlight health IT advances as a key part of their respective healthcare platforms, as do many Democrats and Republicans in Congress.

According to proponents, better use of information technology would improve administrative and clinical efficiency, reduce medical errors, make it easier for auditors to track patterns of inappropriate medical care and billing and provide lessons on what types of medical care work best for patients.

The fact that near-universal enthusiasm for health IT has not resulted in a big legislative accomplishment underscores the difficulty of making policy even in an area where practically everyone agrees on its benefits.

Despite this widespread support among lawmakers, healthcare companies, patient advocates and academics, Congress has struggled to enact legislation like the Dingell-Barton bill. The Bush administration has made some progress administratively, though, and Congress this month enacted a bill to provide financial incentives for physicians to use electronic prescriptions for their Medicare patients.

In addition to disagreements about who should pay for building the infrastructure needed to fulfill health IT’s promise, privacy concerns have been a significant obstacle to process.

Though Republicans in general tend to be more skeptical of the worst-case scenarios that worry privacy advocates, the issue is personal for Barton, who revealed in April that he had suffered a breach in the privacy of his medical information. The National Institutes of Health allowed a laptop computer containing unencrypted information about 2,500 patients, including Barton, to be stolen in February.

The Clinton administration and the Republican-led Congress had similar political problems in the 1990s when trying to enact and regulate the privacy protections currently on the books via the Health Insurance Portability and Accountability Act of 1996.

The debate, in some important ways, is a re-run of that fight, Alissa Fox, vice president of legislative and regulatory policy for the Blue Cross Blue Shield Association , said last week.

The recordkeeping and patient consent provisions added before the subcommittee markup would be onerous and costly, Fox said. Moreover, she said, these stricter rules could actually stymie some of the key goals of better health IT, namely improving healthcare quality and safety.

Requiring healthcare companies to ask patients for consent each time they used information about them, even information stripped of identifying information, for example, would limit the amount of data that could be collected to research healthcare quality and safety at the macro level.

The draft headed to markup Tuesday is less stringent on these points, Grealy said, but the healthcare industry still has concerns. “Do I think they have completely addressed all the issues? No,” she said.

The Ways and Means Health subcommittee has a hearing scheduled on health IT Thursday.

The Senate is further along procedurally, but progress on its bill also was slowed down by privacy concerns. Health, Education, Labor and Pensions (HELP) Committee Chairman Edward Kennedy (D-Mass.) and ranking member Mike Enzi (R-Wyo.) marked up their bipartisan bill in June 2007. The bill was held up for months, however, as the sponsors worked with Sen. Patrick Leahy (D-Vt.) to incorporate stronger privacy protections he favored. Leahy and the HELP Committee leaders came to an agreement in April.