Health-Care Cards Could Help Heal a Broken System

When veteran foreign correspondent T. R. Reid set out to write about France's health-care system for his recently published book, what impressed him most was not the country's universal coverage. Nor was it the system's low prices and wide-ranging benefits. Instead, as he explains in The Healing of America, the defining element of the French health-care system is a small green card that each patient carries: the carte vitale. The plastic credit card carries all the essentials of health care: medical records, insurance information, prescriptions, and reimbursements. It is used to check in, identify the patient, and provide the doctor with a complete background on the patient. "For me," Reid explains, "the carte vitale ... became a symbol of what the French have achieved in designing a health-care system to treat the nation's 61 million residents." In fact, the only picture that Reid includes in his 277-page book is one of the carte vitale.

Much of the buzz about digital future of health care has centered on electronic health records: both Google and Microsoft have developed platforms for medical providers. But one of the biggest advancements in health care might come on a very small card. Industry analysts say that a smart-card system could dramatically improve how we access, carry, and process medical records. "You have two forces working at the same time," says Randy Vanderhoof, director of the Smart Card Alliance, a trade group that promotes the use of smart cards in all industries. "Hospitals are looking to improve and keep costs down. And you have major legislative changes that will require an approach that begins with, how do we make sure we're identifying the right person?" Moreover, how do you keep your identity secure and prevent others from using it to receive care? About a half million Americans have had their medical identities stolen, according to a recent World Privacy Forum report, many racking up huge health-care bills because of it. Smart cards, it turns out, can go a long way toward answering those questions.

European and Asian countries with nationalized health-care systems have used smart cards to identify and track patients for about a decade, with generally positive results. The French, for example, have used the carte vitale since 1998 and have 67 percent fewer administrative personnel per building than a comparable American establishment. Taiwan, which implemented a national health-care system in 1995, spent $108 million to implement a smart-card system in the early 2000s. Their administrative costs are less than 2 percent of total health-care expenditures and possibly the lowest in the world.

The United States has not entered the smart-card market largely because of our fragmented health-care system; we have thousands of private hospitals and insurers and no single government agency to act as the issuer. But two recent changes to health policy will likely push hospitals in the direction of smart cards. First, the stimulus package puts $19 billion toward "utilization of an electronic health record for each person in the United States by 2014." Moreover, new legislation, passed in 2009, steeply increases the fines for patient security breeches. Penalties that used to cap out at $25,000 can now go as high as $1.5 million. Taken together, these two changes push health-care providers toward a system that is both electronic and secure.

Smart cards do both. First, they allow medical records to become portable, meaning they could be carried, via the card, from one provider to another. Every medical transaction gets uploaded onto the card, added to your record, and becomes available to whatever health-care professional sees you. Moreover, portability means that, instead of filling out the familiar forms on medical history and insurance information, all that information would already be stored on the card, saving the patient and provider a huge paperwork headache. In terms of security, smart cards can help verify that the person requesting access to an electronic record—whether at a pharmacy in Oregon or in an emergency room in Missouri—is indeed the person they say they are by requiring patients to enter a PIN number, much like an ATM.

Mount Sinai in New York City, one of the nation's largest hospitals, might be the earliest adopter of the technology, beginning experiments in 2003. "We had a problem with identifying patients across different Mount Sinai institutions," says Paul Contino, the hospital's vice president of technology. With more than 3.7 million patients in its database, there were hundreds of patients with shared names; it was difficult to know whether the John Smith who showed up at the emergency room in Manhattan was the same one who had recently visited the clinic in Queens. One illegible digit in an address or phone number could throw off the whole verification system. This was not only risky to patients, but it was also incredibly costly for the hospital: in 2006 Mount Sinai spent $1.8 million just to clean up its records.

So in 2003 Mount Sinai launched a pilot program at its hospital in Queens. It was pleased with the results, and in 2006 expanded the program to 10,000 patients. Now, when John Smith shows up at the Manhattan emergency room, he can insert his card into a reader and enter a PIN. The hospital then knows who John Smith is and has all his medical history and records available. Mount Sinai now has 100,000 more smart cards that it plans to begin distributing in the coming months. Compared with the millions spent in cleaning up medical records, which must be conducted every few years, smart cards work out to about $4 per patient.

While the system intuitively makes sense, it's difficult to implement. One fundamental challenge, Contino explains, is working with other hospitals. A smart card is not much use, for example, if it works only in your doctor's office, but not the emergency room down the street, so Mount Sinai is hoping other New York City hospitals follow its lead. "Whenever you're on the bleeding edge of technology, someone has to jump in the deep end," says Contino.

Within the industry, there are divides over how best to distribute the cards and what information they ought to carry. Some plan to market to individual consumers via emergency rooms, insurance companies, and pharmacies. Other vendors take a more top-down approach, partnering with specific hospitals to handle distribution. There's also a question of compatibility: will a smart card issued by a hospital in Delaware work with a pharmacist in New Mexico? Health IT experts envision an ATM-machine-style system, in which readers issued by different companies accept and can get information from those of another vendor. Contino says, "One of the things that needs to happen is a level of standardization," both in terms of the cards and the software used to read and edit the information they carry.

Smart cards, says Vanderhoof of the Smart Card Alliance, "have a long way to go. They can't happen overnight in a system that's both fundamentally broken and going through major upheaval." He estimates we're about a decade or so away from smart cards being a familiar part of the health-care experience. But progress is happening: just this past summer, the American Hospital Association selected Extension as its first and only endorsed smart-card vendor. About a half dozen hospitals are, like Mount Sinai, experimenting with the technology. A carte vitale of our own, albeit one that arrives in a relatively happenstance fashion, may be in the near future.