Lots and lots of people have declared HIPAA irrelevant and ineffective because of the lack of direct federal oversight and the perception that the penalties it could potentially level at an organization were weak in comparison to things like SOX.
But, OH SNAP!! The Health and Human Services Inspector General is auditing providers. I've got in my inbox a copy of the FAX sent to _____ Hospital in Georgia about their audit. No mention of complaint or prior incidence. Just a friendly, "Hi, we're coming to audit you," letter complete with data collection document.
It has always been my stance that if what's lacking in compliance is enforcement, then it's important to comply, because enforcement is only a budget line item away. So I guess I'm saying, "I told you so!" to everyone who has greatly exaggerated the rumors of HIPAA's death.
So, uh... think warm thoughts doc, cuz that thermometer is mighty cold.