Smart Cards in U.S. Healthcare: Benefits for Patients, Providers and Payers
Publication Date: February 2007
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The healthcare market is poised to move from a paper world to an electronic one. In an era of managed care, specialized medicine, thin financial margins, identity fraud, difficult insurance claims, and government demand for secure, portable, and confidential patient information, the competitiveness of healthcare providers may depend on effective use of information technology (IT). However, increased computerization, reliance on databases, and movement of sensitive patient information require strict controls to safeguard the security and confidentiality of healthcare records.
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.
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
This white paper describes the challenges within the healthcare industry and the clear opportunities for the use of smart card technology in health care. In recent years, there has been a pronounced effort to establish and refine standards for maintaining and moving healthcare data. With continual advances in smart card technology and increased awareness of its practical solutions, the healthcare industry’s use of this technology is gathering momentum. This paper cites some examples of smart card use and suggests additional applications for consideration. A plethora of new healthcare applications await discovery and implementation.
About the Health and Human Services Council
The Smart Card Alliance Health & Human Services Council brings together human services organizations, payers, healthcare providers, and technologists to promote the adoption of smart cards in U.S. health and human services organizations and within the national health IT infrastructure. The Health & Human Services 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.