Smart Cards

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Capgemini

CDHP, facilitated by smart cards, will give customers better choices and a sense of ownershiptoward their decisions. A smart card in a patient’s pocket empowers a new perspective onhealth services.

As health plans become more tailored to the needs of consumers and the budgets of employers, new ways of storing and exchanging patient information are making simple work of the often complex rules for coordinating benefits. The following story is an extrapolation of today’s technological capabilities and collaboration initiatives into a future that may be only months away.

A Patient’s Story

George Martin hobbled painfully into his study. He’d recently torn the cartilage in his left knee during an episode of athletic overconfidence, and the immobilized limb made locomotion slow and awkward. He lowered himself gingerly into his chair and gave a quick prod to his computer. Within moments, he was navigating through his online newspaper. His knee might be stiff, but his hands scrolled, pointed, and clicked with practiced ease through the day’s headlines. Later, he would peruse the printed version waiting for him at the end of his driveway, but that news, he knew, was at least 12 hours old. Stale information. In a few hours, George will undergo arthroscopic surgery to repair his injured knee, but this technologically advanced medical procedure is just one component of a care delivery system that is less adept at handling patient information than his home computer. George found the disparity aggravating, but he dutifully arrived at the hospital’s surgery center expecting to face a sizable stack of forms and a long wait while his insurance eligibility was verified and his coverage determined. He wasn’t sure what his surgery was going to cost, or the extent of his personal financial obligation, but he hoped that these issues would be resolved in time. George presented his insurance card to the admitting representative. It was a smart card sent to him by his insurance provider. It had the same size, shape, and appearance as his credit cards and the printed-plastic insurance cards he received with each new benefits enrollment. It had the same magnetic stripe on the back. Unlike the other cards, this one contained a tiny computer chip embedded in the plastic. The little card gave George a big surprise.

The clerk at the registration desk instructed George to place his card in a reader attached to the office computer. Though it looked just like the card readers at the supermarket where he had countless times swiped his bank card to pay for a purchase, George knew that his card’s computer chip was making a direct connection to the hospital’s patient information system. The clerk asked him to key in his PIN. Moments later, the clerk was paging through George’s personal, medical, and financial information. The clerk asked George to confirm his address, date of birth, and reason for today’s visit. Confident that he was talking to the right person who was there for the right reason, the clerk began to discuss George’s financial responsibility for the day’s surgery. The clerk immediately connected to George’s health plan (through the card) to determine his real-time eligibility and extent of coverage. As George expected, most of the cost of the surgery will be paid by his health plan.

“Will you be paying the balance from your health care reimbursement accounts?” the clerk asked. George intended to pay his personal financial obligation with deductions from his existing health reimbursement arrangement (HRA) and flexible spending account (FSA). George was astonished to see that the clerk knew his account balances, deductibles, and payment rules.

“Yes,” said George. “But, I’m not sure of my year-to-date medical costs, and figuring out what to deduct from which account can get complicated. I’ll fill out the forms later.”

“You don’t need to submit any forms. By the time you’re discharged, I’ll have all the financial arrangements finalized. All you’ll need to do is approve the charges to your accounts before you leave.”

“Really?” George heard himself asking. “No forms? No bills?”

“It’s all done electronically,” said the clerk. “Your card tells us what health plan, employer, and financial institutions handle your benefits, and everything we need to know about your coverage. Even if your coverage is very personalized and complicated, we can quickly share information among all these payers and handle the financial arrangements while you’re still here. OK, we’re done. Here, take your card with you. I’ve reserved a pre-op room for you. The nurse will go over your medical information with you.”

George limped, a bit bewildered, to his room. It’s a relief to get the bill out of the way, he thought, but he wondered if his smart card would shorten what he regarded as an unpleasant ritual: the recitation of his medical history. George and his pre-op nurse entered the room simultaneously. After they introduced each other, the nurse turned to a small computer terminal and began reviewing page after page of medical information. It was George’s.

“You’re George Martin. You’re allergic to penicillin and dairy products. You have sleep apnea. How am I doing so far?” asked the nurse.

“On the money,” said George.

“Do you have any drug allergies or medical conditions I didn’t mention?” she asked.

“No, that’s about it,” said George. “Is that all you need to know?”

“Unless your medical information or condition has changed since you met with your doctor last Thursday, we have your current medical data right here. It’s all stored on your card.”

“I guess that’s why they call it smart,” said George. “What doesn’t it know?”

“It doesn’t know whether or not you complied with your pre-op instructions, so I need you to confirm that you’ve abstained from eating for the last 24 hours and drinking water for the last 12 hours,” she said. George’s stomach growled involuntarily in testimony to his compliance with these presurgical privations.

The nurse discussed with George what he should expect following his arthroscopic procedure, and gave him post-op instructions for physical therapy and pain management. “The knee is going to hurt for a few days,” she said. “The doctor will prescribe pain medication for you. I’ll have her put your prescription on your card for you. You can take it to your local pharmacy to get it filled. It’ll be up to you to specify a proprietary or generic brand. Your pharmacist can discuss your copay options with you. Your prescription plan and medication history are loaded on your card, too.”

George liked taking responsibility for his own health care decisions. He appreciated that his smart card was helping to make his decisions more informed and his life less complicated.

George’s story takes place in the near future. Although smart card technology is fully developed and the supporting infrastructure is evolving rapidly, the challenges and cost of coordinating disparate information sources and systems have limited investment in smart card deployment by health plans until very recently. Nevertheless, energy and interest in smart cards and their capabilities are increasing, and pilot programs are demonstrating that smart cards will play an ever-expanding role in health care delivery.

Smarter Is Better

To a large extent, smart cards are a virtue born of necessity. Employers want to shift more of the burden of paying for health care onto their employees. Health care consumers want more choice and flexibility in their health plans. Health plan organizations want to reduce the cost of health care by encouraging their members to adopt cost-effective behaviors such as disease prevention, routine screenings for earlier disease detection, and use of mail order and generic drugs. Providers want to receive fair and timely payment. As a result, health plans have become increasingly complex, offering a wide array of options and coverage combinations tailored to each member’s needs. Keeping track of frequently changing plan options, coverage rules, copay amounts, deductible status, and account balances in a bewildering array of HRAs and FSAs is a formidable record-keeping challenge. Smart cards can help manage the mushrooming complexity of consumer-directed health plans (CDHP), while providing safer patient care and improving consumer convenience and satisfaction. When a patient carries a fully enabled smart card, clinicians and physicians at every point of care can access current and detailed information about the patient’s medical and clinical histories, current diagnosis, prescribed medications, and more. Especially in emergency situations, knowledge about a patient’s medical condition and experiences can better inform treatment choices. Smart cards can help save lives. Smart cards symbolize the shift of responsibility for health care choices and paying for those choices onto the consumer. In yesterday’s health care model, physicians and insurance companies held all the cards; patients played a passive role in consuming health care services. Tomorrow, CDHP, facilitated by smart cards, will give health care customers more and better choices and a sense of control and ownership toward their health care decisions. A smart card in a patient’s pocket empowers a new perspective on health services.

Embedded Integrated Circuit Chips For More Integrated Health Care

Smart cards are plastic devices about the size and thickness of a credit card that contain an embedded integrated circuit chip capable of storing data and the instructions necessary to process it. Smart cards carry vastly more information than simpler cards with a magnetic stripe or bar code. A typical smart card in use today can store and process 16 to 32 kilobytes of data, but newer cards can accommodate 64 to 128 kilobytes – as much as three times the amount of information contained in this article.

The unique advantage of smart cards, however, isn’t just their storage capacity. Smart cards, unlike swipe cards that serve only as static data repositories, can exchange data with external systems and provide instructions for processing the data. This twoway interaction and its data processing capability allow a smart card to exchange and update personal, medical, and financial information with any compatible external system. During the admission or intake process, for example, a patient’s smart card launches a series of events:

• A secure connection is made with the cardholder’s health plan;
• The provider receives eligibility verification and complete benefit information;
• The system displays current information including copay amounts, deductible status, and available balances in the cardholder’s HRA, FSA, and or any other account he may have designated and authorized for funding his medical expenses; and
• The provider can easily access – and debit – the cardholder’s appropriate account(s) at the time and place care is delivered.

Clinicians and physicians can use the patient’s card to retrieve or record a current medical history, status of diagnostic tests, allergies, or contraindications to medications or treatments, and coverage rules.

Pharmacists have access through a smart card to the cardholder’s drug plan and copay options, physician prescriptions, and a comprehensive list of the patient’s current medications. This information enables the pharmacist to better prevent adverse drug interactions.

Information and applications stored on a smart card are updated each time a transaction is made. Furthermore, by securely exchanging information, a smart card can authenticate the identity of the person possessing the card far more rigorously than is possible with simpler ID cards. The improved security facilitated by smart cards can help providers comply with the privacy requirements of the Health Information Portability and Accessibility Act (HIPAA). In addition to authentication using PINs, smart cards can be combined with inexpensive biometric devices to verify the identity of the cardholder using fingerprints or retinal patterns. Some types of smart cards are equipped with contactless chips that can interact with proximity sensors to identify the individual passing through a doorway or approaching a computer workstation. Computers that routinely display private patient information can be set up to switch off or go dark whenever the authorized user is absent. With identity theft a significant and growing concern for health care providers, smart cards can help each cardholder to prove “I am who I say I am.”

Opportunities for Better Collaboration

Between Payers and Providers

Payers and providers have begun to recognize the virtue of behaving as allies in managing health care services and costs. Many have started projects aimed at developing Web-based solutions for sharing patient eligibility, coverage, and financial information. Smart cards smooth out the seams in still-compartmentalized revenue cycle processes. Smart cards facilitate the payer’s ability to confirm a patient’s eligibility for insurance coverage and determine the financial responsibility of both the payer and the patient without necessitating a centralized clearinghouse. This information is instantly available at the point of service, without tedious phone calls that put administrative burden on the provider’s staff and consume the resources of the payer’s information call center. The ability to determine financial responsibility at the time of service and to process credit or debit card transactions reduces billing costs and receivables and accelerates cash flow. Fewer denied claims mean reduced adjudication effort for the payer, increased revenue for the provider, and less frustration for the patient.

Between Patients and Providers

Accurate, detailed, and current patient information at the point of care better informs treatment options, resulting in safer and improved patient care. Smart cards, by better authenticating each patient’s identity and eligibility, help to reduce fraud and abuse. The convenience and interactivity of smart cards encourages patient loyalty to their providers and payers. Smart cards encourage patient participation in making health care decisions, and Web-enabled selfservice options such as medical pricing information, a consumer medical library, personal health pages, hospital quality ratings, care evaluation tools, extensive provider information, and even leadingedge health coaching programs.

Between Patients and Payers

The convenience and simplicity of smart cards help to engage customers more fully and more directly in health care transactions. With e-prescriptions and copay options stored directly on the card, a patient can carry prescriptions directly to the local pharmacy and make cost-effective drug choices. Pharmacists have access to information about their customers’ current medications and drug histories, enabling them to be alert for potential adverse drug interactions.

The commingling of medical, health coverage, and financial information on a smart card affords providers, health plans, banks, employers, and other financial institutions the opportunity to collaborate in joint marketing ventures with “branded” cards. Credit card companies will surely begin to offer credit accounts linked to a customer’s health plan. Banks will offer debit cards that also provide access to a customer’s HRA and FSA accounts. Even the U.S. government could get involved with Medicare cards that offer access to a customer’s checking account. The potential combinations are many and varied. In such joint ventures, the advantage of brand recognition will go to the organization that invests in the products and infrastructure that integrate these disparate categories of information.

Smart cards also make practical affinity programs that steer customers toward cost-effective decisions and healthy lifestyles, and market other care delivery discounts and benefits. Many health care reformers are strongly advocating for this type of reward system for people who make healthy lifestyle choices.

Smart cards combined with Web connectivity can lead to innovative disease management opportunities. For example, George Martin, the patient whose story opened this article, can attach an inexpensive card reader to his home computer for some revolutionary collaborative treatment capabilities. George’s surgeon asks George to check in with her after he’s been home a few days and his knee is feeling better. George puts his card into the reader, which presents George with a menu of links to health care resources. George chooses his doctor’s link, and sends her an email with a brief progress report and a few questions. The doctor responds via email with orders for additional physical therapy sessions. George’s health plan receives a copy of the doctor’s referral and electronically approves the therapy sessions within a few hours.

Implementation Accelerators

Until recently, a lack of universal standards for storing and transporting electronic data has hampered the development of integrated information networks that make smart cards useful. New standards for electronic data interchange mandated by HIPAA are already helping to facilitate better collaboration and information sharing among all participants in the health care delivery system. Building on this momentum, standardization of hardware and software protocols and development of robust user portals are hastening the day when George’s story will be a typical clinical experience.

“Moore’s Law,” a prediction that the component sizes of integrated circuits and the costs to manufacture them will continue to shrink geometrically over time, is also accelerating the acceptance of smart card technology. The cost to deploy smart cards and their supporting technology is now within reach of almost every health care provider. Since both card and reader qualify as computer equipment, they can be capitalized and depreciated over time.

Impediments to Implementation

Though smart card technology has become relatively inexpensive, equipping every access point with a card reader is still a significant expense, especially if biometric security scanners are required. The smart cards themselves cost from $1 to $4 each, depending upon capabilities desired and the quantity ordered.Their average useful lifetime before succumbing to inevitable wear and tear is about five years. Many organizations have projects underway to build open data networks based on HIPAA standards, but relatively few of these systems are up and running. Pilot projects underway in Taiwan, Minnesota, Massachusetts, and elsewhere have demonstrated that the benefits provided by smart cards (and their supporting networks) are well worth the investment. But, faced with shrinking margins and growing costs, health care providers and payers, notoriously riskaverse, are reluctant to make the first move. Banks and third-party health plan administrators have been more willing to invest in smart card technology. By taking a back seat to financial institutions, payers and providers risk becoming largely invisible to customers, losing the loyalty that comes from allegiance to a recognizable brand.

How Smart Are We Today?

Smart cards represent the next generation of data sharing beyond magneticstriped swipe cards, similar to the evolution of video technology from VHS tape to DVD. Many smart cards retain magnetic stripes and bar codes so that they can be used with limited functionality in traditional card readers. Many vendors of magnetic stripe card solutions are already planning next-generation products and applications that utilize the embedded capabilities of a smart card. Financial institutions such as credit card companies like American Express are moving to chip-based smart cards at an increasing rate. More than 50 million smart card credit cards are currently in use in the United States. Canada is looking into a combined identity smart card for driver’s licenses and health care. The U.S. federal government and Department of Defense are this country’s largest users of smart cards, with many projects in the works to increase the numbers of cards deployed and expand the scope of services they support.

As the capabilities of the supporting infrastructure expand, smart cards are evolving to facilitate access to system resources. A growing number of health care organizations use smart cards to access personal, financial, and eligibility information. As patient information becomes more integrated, some organizations are gearing up to use smart cards to store and process medical and clinical information as well. Others use smart cards to store drug plan options and enable e-prescriptions. Still others combine health plan cards with debit or credit cards. In the near future, all these capabilities and more will be accessible by a single card.

Smart cards may influence some smart thinking regarding the necessity of a centralized health data repository or eligibility clearinghouse. A smart card can bring relevant information from disparate sources together at the point of service, then return updated information to its place of origin. When the necessary infrastructure becomes a reality, smart cards will be the keycards that will make accessible the health care possibilities of the future.