Atlanta will be test site for health card

[R.A. Hettinga]

<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

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R. A. Hettinga <mailto: rah at ibuc.com>
The Internet Bearer Underwriting Corporation <http://www.ibuc.com/>
44 Farquhar Street, Boston, MA 02131 USA
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