The real trick is keeping personally-identifiable data out of the hands of insurance companies.
Strict compliance to rule following is relying on some centralized authority to set the rules.
Your argument would make for a low risk environment but also high tyrannical potential. Rules are created to protect the status quo — not to spur innovation. Rules are established by people in power and those people have a vested interest in staying in power. Rules should be minded but not necessarily respected.
As in all things, a balance. But to argue all for one way or another is folly.
HIPPA has seemed to create a view that anything related to medical care is the most secret information in all the world, when in fact it’s pretty useless to anyone but yourself and people that want your money in some way that exploits your health situation. HIPPA itself only really erects barriers between your health data and disclosure to insurers and providers without your consent.