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March 2007 • Volume 12 Number 3
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Feature of the Month Smart Cards in Healthcare: Benefits for Patients, Providers and Payers
As the industry advances electronically, data protection is a key concern, fueled in part by legislation such as the Health Insurance Portability and Accountability Act (HIPAA). Current healthcare requires immediate and secure information access without compromised privacy. Smart card technology represents a unique opportunity to provide healthcare solutions that combine secure information access and management with data mobility and patient privacy. Healthcare administrators are currently major consumers of paper and ink. Keeping patient records, submitting medical claims, making referrals, writing prescriptions, and booking appointments are typically manual processes. The few areas that are automated tend to operate independently of each other. Only a minority of physician practices store patient data electronically. Physicians and other healthcare professionals have a stubborn affinity for using paper-based media to collect and retain patient data. Smart Card Benefits to Healthcare Organizations The use of smart cards can reduce healthcare paperwork and protect patient records. The smart card can hold encrypted patient information and use a digital signature or a biometric template to reduce ambiguity about the cardholder’s identity. The use of smart cards can also reduce the incidence of fraud in health benefit claims—a significant issue for the Federal government. And while HIPAA does not call for the use of specific technologies, it is likely that many healthcare enterprises will choose smart card-based solutions because of their ability to support secure data handling and reduce fraud. Smart card technology can also improve the healthcare insurance process. Currently, eligibility verification and claims processing are too often characterized by redundant information collection, multiple reimbursement forms and lengthy delays. Paper-based manual processes greatly increase the risk of human error which results in significant avoidable costs to insurers, national health agencies, and healthcare providers. Too often, these processes result in significant delays in referral, treatment, and reimbursement for insured patients. Smart cards can provide clean data for eligibility verification and claims processing. They not only can prevent administrative errors and streamline the payment process, they can also prevent medical errors that arise when one practitioner doesn’t know what another has been doing. Test results conducted by one practitioner can be available to all practitioners. Before prescribing a drug, a physician can review a patient’s recent diagnoses, allergies, and prescription history and be aware of any over-the-counter drugs that could conflict with the proposed course of treatment. In the long run, the data carried by smart health cards not only can prevent illness and save lives, they also can save the healthcare industry billions of dollars. Today, many patients lack control over their health records. Smart cards are among the few electronic devices that enhance both control and privacy. No one can read what is contained on the smart card’s microchip or use the card to access computerized records without a personal identification number (PIN) and authorized hardware and software. Further, smart cards interact reliably with a wide range of systems. They can operate over the Internet to verify information in a carrier’s database, and they can be read and updated offline at a physician’s office, when medical clerks prepare electronic claims for submission to an insurer. Moreover, the ability of smart cards to disaggregate data and encrypt information can protect an individual’s right to privacy while still allowing multiple healthcare facilities to share patient information more efficiently. Smart cards can carry important health information and participate in the health information system’s billing and collection functions. Smart cards can also play a key role in areas such as clinical research where provisions for confidentiality and patient control of data access encourage patients to participate in research studies. Regardless of whether the smart health card stores critical medical data and clinical information or acts as a secure key to open distributed repositories of patient information, it is a concept whose time has come. Smart cards are a practical enabling technology that can enhance the privacy and confidentiality of patient information. They are intuitively easy to use and work in a very similar manner to credit cards, which have become so ingrained in our society. The U.S. Healthcare Environment There is a great disparity between the amount of money that is spent on U.S. healthcare—the most per capita of any nation—and the use of electronic healthcare records. What is needed in the United States is a healthcare system that offers providers an integrated view of a patient’s health status and medical history. Many healthcare industry experts believe that such a system would significantly improve the chances that the healthcare community can attain its critical goals: to cut costs, improve the quality of care, reduce medical errors, and improve information access. Unfortunately, most healthcare providers cannot share data with other providers, and they are certainly not able to support an integrated view of the patient’s medical history and current health. To remedy this situation, some have looked to some sort of national healthcare information network (NHIN) to break through the information logjam. Attention has focused on regional health information organizations (RHIOs) with the expectation that they will be the precursors of an NHIN. However, not only have RHIOs not been able to demonstrate a sustainable business model, their focus has been on technical infrastructure, not on becoming organizations to improve information access for patients. To date, RHIOs have had little influence on the sharing of information among healthcare providers. Already at record expenditure levels, the U.S. healthcare industry faces additional spending increases. Much has been made of the aging of the American population. Unfortunately, this increased longevity is accompanied by the prevalence of chronic health conditions, implying a requirement for additional care from a more diverse group of provider specialists. This requirement, in combination with the mobile nature of U.S. citizenry, implies a substantial increase in the demand for secure access to decentralized medical records. The current lack of complete and comprehensive medical records creates a challenging environment for the healthcare community. This lack also limits the community’s ability to achieve its goals of improving the quality of patient healthcare and reducing inefficiencies and costs. Added to the provider burden of managing patient records are requirements for patient verification, security, and privacy, as well as patients’ desires to control of their own medical records. Smart cards are not a panacea for all these ills. However, a smart card carrying critical patient medical data does support patient empowerment. The patient’s smart card protects privacy while ensuring information access and security. It supports the mobility of today’s patients, providing a means by which the various specialists who treat the patient can share information. Smart card technology helps reduce the burden of record management, providing timely information sharing and serving as a mobile repository for diagnoses and treatments. A patient smart card supports identity verification, provides excellent security, and can speed up patient registration and check-in. Leveraging smart card technology to improve provider competitiveness and HIPAA compliance can improve efficiency and reduce costs. Smart cards can provide the U.S. healthcare community with a feasible and expeditious solution to the long-term problem of information access, and it is a solution that RHIOs and any future NHIN might consider for their own use. About this Article About the Healthcare Council The Healthcare Council is one of several Smart Card Alliance Technology and Industry Councils, a focused group within the overall structure of the Alliance. The Healthcare Council brings together payers, providers, and technologists to promote the adoption of smart cards in U.S. healthcare organizations. The Healthcare Council provides a forum where all stakeholders can collaborate to educate the market on the how smart cards can be used and to work on issues inhibiting the industry. Healthcare Council participation is open to any Smart Card Alliance member who wishes to contribute to the Council projects.
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