The Law of Unintended Consequences

Abstract

Approximately 25 years ago, a group of concerned citizens, led by the celebrity couple Jane Fonda and Tom Hayden, lobbied for a strict rent control law in the ocean-side California city of Santa Monica. Real estate prices had recently escalated dramatically, and monthly rent prices for the city’s apartments had begun to increase as well. The newspapers were filled with touching stories about elderly couples and single mothers being forced out of the apartments that they had lived in for decades because of the greed of rapacious landlords. With a groundswell of popular support, the strictest rent control in the nation was put into effect to protect renters’ rights. Rent prices could be raised only a small percentage each year (approximately 1% to 3%, as legislated by a special rent control board), even when apartments became vacant and required significant monetary investments for repairs and remodeling. The intended consequence of the new law was to protect current and future residents from greedy landlords and ensure that the city had a diverse population—not just wealthy people who could afford expensive housing. It was a noble cause. What was Santa Monica like a decade later? The population of the schools had decreased dramatically, and the public schools were struggling to survive. Apartments were filled with 30-something single professionals, a fact reflected in the highest per capita ownership of personal computers in the entire country. Neighborhood grocery and hardware stores had been replaced by coffee bars and expensive boutiques on the main thoroughfare, catering to customers who looked like extras from an episode of the television show Friends. Santa Monica was significantly and irrevocably changed, but not in the way intended by those who had lobbied for rent control. Within a few years of rent control legislation, the population in Santa Monica changed because landlords had hundreds of applicants applying for each vacancy. With apartments in Santa Monica renting for approximately 50% less per month than in neighboring cities, landlords had their pick of potential tenants. Suddenly, single mothers and people on fixed incomes couldn’t compete with young professionals who came with stellar credit ratings and promises to spend their own money to fix up an apartment. Santa Monica’s rent control law (which was significantly modified 2 decades later) is a classic example of the law of unintended consequences. A decision is made for all the right reasons, but the effects of that decision not only are unintended but often are counter to the purpose of the original decision. Many examples of the law of unintended consequences exist from teenagers’ curfews to steel tariffs. The law of unintended consequences may have landed squarely in the healthcare arena in the form of the Health Insurance Portability and Accountability Act of 1996 (HIPAA). This law was designed to allow employees who leave a position in one company to keep their health insurance (ie, making it “portable”). Without such protection, individuals could easily be denied new insurance because of a preexisting condition such as heart disease, diabetes, or pregnancy. The law is farreaching and attempted to change many aspects of healthcare related to patient privacy and insurance portability/renewability. While the architects of HIPAA were well meaning, they underestimated the frequency and intensity of information exchange in healthcare, creating unintended consequences for many clinicians, families of critically ill patients, hospitals, and researchers. At the heart of the standards is “protected health information,” or PHI, which encompasses any identifiable health information transmitted or maintained in any form or medium, and includes oral, written, and electronic communications. A new vocabulary has emerged from HIPAA, including such phrases as “covered entities” (for example, healthcare plans or healthcare providers), “business associates,” “privacy officers,” and the “minimum necessary” rule that says only the minimum amount of information necessary to get the job done should be used. There have been difficulties in the interpretation of the law. Each hospital may (and often does) interpret EDITORIAL