<http://msnbc.msn.com/id/6433571/print/1/displaymode/1098/> MSNBC.com Atlanta will be test site for health card Transaction titan First Data will put credit-card machines in doctors' offices By Justin Rubner Atlanta Business Chronicle Updated: 7:00 p.m. ET Nov. 7, 2004 One of the nation's leading money movers now wants to move your medical information. Denver-based First Data Corp. has picked Atlanta as the first city to test a beefed-up credit-card machine it hopes will do nothing short of revolutionize the health-care industry. The financial transaction titan (NYSE: FDC) plans to start the pilot in January after completing several rounds of focus-group studies here during the next couple of months. The machine eventually would allow a doctor to find out everything about a patient's health benefits -- from claims status to eligibility to co-pay specifics -- with a swipe of a card. The information could then be printed out of the terminal, much like a credit-card receipt. Currently, a doctor or assistant has to photocopy a patient's insurance card and then call the patient's insurance company for specific information, check each insurance provider's Web site for more general information, or flat-out guess. "While the patient is still in care, we can immediately say how much the doctor needs to collect from the patient and the insurance company," said Beverly Kennedy, president of First Data's health-care division. Many in the health-care industry see an automated, nationwide system to process payments and transfer medical records as long overdue. For one, there's the mountain of paper records associated with the current way of doing business. Second, there's more complex government regulations, such as the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Adding to the complexity are increasingly complex health-care plans. Then, the costs of medical administration itself also are rising. Kennedy said $275 billion is spent each year on such administrative costs. Eventually, the hope is, an automated system would reduce such expenses. First Data wouldn't be the first player to attempt such an ambitious project. There is a program in Wyoming, North Dakota and Nevada that uses "smart cards" to store medical records, according to published reports. In addition, First Data competitor HealthTransaction Network Corp. is pushing insurance companies to issue debit cards that would be linked to medical spending accounts. But an inclusive nationwide system has been hard to come by, primarily because of the high number of small, loosely connected doctors' offices. Real-time intelligence First Data's machine, manufactured by Phoenix-based Hypercom Corp. (NYSE: HYC), will have smart-chip technology as well as the familiar magnetic strips. Such chips, which are not being tested in the pilot, allow a greater amount of information to be passed through and allow that information to be stored. There are privacy concerns that need to be ironed out. However, when policy intersects with technology, the terminals will be ready with the chips, which already have been used in Europe, Kennedy said. Insurance companies participating in the program will give their customers special cards to be used at participating health-care facilities. One of the state's biggest insurance companies, Blue Cross and Blue Shield of Georgia Inc., could be one such participant. Spokesman Charlie Harman said the company is in talks with First Data but declined to give specifics, saying it was too "proprietary" in nature. "This is an important concept," Harman said. "We need to marry technology to the health-care system." Harman said Blue Cross Blue Shield already is on the cutting edge of technology; for example, it is actively involved with a system that allows physicians to send prescriptions to pharmacists electronically. Some hospitals also are involved with "e-prescribing," including Piedmont Hospital in Atlanta. To make it seemingly risk-free for doctors, First Data will give the terminals away, Kennedy said. But that doesn't mean the company won't make money -- First Data collects transaction fees, as it owns the network the information travels over. First Data, Western Union Financial Services Inc.'s parent company, processes all sorts of financial transactions over its network. The company provides electronic commerce and payment services for approximately 3.1 million merchant locations, 1,400 card issuers and millions of consumers. The terminals will plug into the wall just like the current generation of credit-card terminals and will be easy to use, Kennedy said. "It's got to be 'simple-stupid,' " Kennedy said. "It's got to be intuitive." Initially, the terminals will be tested in medical doctors' offices and will offer only eligibility data. The doctors have not yet been chosen. Eventually, Kennedy said, officials plan to expand the program nationally to opticians and dentists and it would offer a complete suite of medical information -- referrals, authorization, claims status. The "light at the end of the tunnel" would be for the program to offer real-time claims adjudication. Kennedy said Atlanta was a clear choice for the pilot primarily due to its size and diverse mix of insurance companies and government programs. The company wanted a large player -- like Blue Cross Blue Shield -- and a good "sprinkling" of national players and small insurance companies. Another important factor is Atlanta's fairly large number of provider groups, or administrative offices that run several doctors' offices. So far, tests have gone smoothly, the company says. "They absolutely love this," Kennedy said. "They keep asking when they can get their own terminals." ) 2004 Atlanta Business Chronicle -- ----------------- R. A. Hettinga <mailto: rah@ibuc.com> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'