The Rite Aid Scandal

The mega drug store chain Rite Aid recently agreed to pay a $1 million fine to stave off a full investigation by the Federal Trade Commission (FTC) into practices that may have compromised customer records. The agreement was prompted by news reports that Rite Aid stores in several locations had disposed of confidential customer medical information in easily accessible open trash dumpsters. The story was a minor news blip in the business and health industry pages. However, it raises much larger questions about how the for-profit private healthcare system has transformed the nature of medical records.

Medical Information as Marketable Commodity

Private control of the healthcare system converts patient records and other health related information into highly valued commodities. Competing drug manufacturers, insurance companies and pharmacies all vie for control over the maximum amount of data to improve their own competitiveness. Simultaneously, the incredible amount of private profits generated by the healthcare industry invites fraudulent activities such as medical identity theft.

The market for such healthcare related information seems to be expanding rapidly. A report issued in 2008 by the whistleblower Private Health Information Privacy website indicated that from 2003-2007 there were 291 incidents of stolen healthcare records that may have compromised the records of more than 16 million people. 75% of these incidents involved employees of health related companies selling the information to third parties.

The for-profit healthcare giant Kaiser Permanente has been cited on several occasions for allowing patient records to be exposed. In one instance, a laptop containing some 160,000 patient records was stolen and the information compromised. Often patient information is then used in elaborate schemes to bilk public and private healthcare programs. Healthcare information now has a murky underworld that is expanding as the economic bubble around the healthcare industry continues to be inflated.

The Problem of Documentation Under Private Healthcare

Most people would not view their health records as potential commodities – to be purchased, stolen, or marketed. Instead, a patient’s health history is a vital part of ensuring continuity of care, especially for people who require attention from multiple providers. Yet, maintaining a complete medical history is practically impossible under a for-profit healthcare system.

Multiple providers, insurers and medical institutions such as pharmacies maintain parts of each patient’s records. Often each employs separate and incompatible recording systems. Single-payer healthcare advocate Mary O’Brien reports in her book 10 Excellent Reasons for National Healthcare, that Microsoft, Google and Texas Instruments are all currently marketing incompatible healthcare recording systems for doctors and hospitals. This will allow healthcare companies to maintain proprietary control over information, but will also prevent patients from assembling comprehensive medical histories.

A critical, and not often recognized, argument for shifting to a single-payer national healthcare system is the possibility of creating integrated records of medical history. A single, nationally administered database would allow multiple practitioners to view and input information regarding patient health. The patient, in turn, would be able to easily assemble all parts of their medical records. Such an advance would end the chaotic separation of information between competing parts of the for-profit system. Only then will medical histories cease to be commodities and become necessary tools to administer care.

The Federal-Corporate Shuffle

The Rite Aid-FTC agreement, announced in a loud press release, includes all the bells and whistles of the typical Federal deal. As the third largest drug store chain in the country, Rite Aid has little fear from a $1 million dollar fine. The chain also agreed to independent monitoring of practices, better training for employees and a sanctions regime for workers who mishandle customer information. This might increase the pressure on its already underpaid and overly supervised workforce, but will do nothing to challenge the nature of medical records in for-profit healthcare.

American’s medical histories will continue to be a sought after commodities. They will be acquired, traded, guarded or even stolen, but not combined into an integrated system to enhance medical care. Only a definitive step away from market-administered healthcare can ensure that the highest quality healthcare is delivered. Until then, patients all over the country will have to navigate a for-profit system organized around the rules of competition, where private control of your healthcare history and records ensures greater profitability.

BILLY WHARTON is a writer and activist whose articles have appeared in the Washington Post, the NYC Indypendent, Spectrezine and the Monthly Review Zine. He can be reached at