A Healthy Dose of Technology.

Health insurers are catching up with their property/casualty peers in using new technological devices.

In recent years, the emergence of new devices--personal digital assistants, two-way pagers and handheld wireless organizers such as the Blackberry, to name a few--have saved insurers both time and money. New gadgets and technological advancements, as well as new uses for old ones, are coming on the scene. In the past, many were better suited for property/casualty applications, but health insurers are getting into the game.

Gadgets and technologies that are already in the market--or that are anticipated to hit the life/health arena in the near future--include the following:

* smart cards;

* i-Cards;

* physician modules;

* electronic prescriptions;

* e-consults; and

* biometrics.

Smart Cards

Health-care providers for years have relied on medical records and insurance cards to access patient information. These items, however, may soon be replaced. Smart cards--which resemble credit cards and store information on an integrated microprocessor chip--are slowly being accepted as a way to provide convenience and security in tracking patient data.

"One idea for smart cards in the health setting is to serve as a patient's ID card that identifies the patient and the certain health program they are a part of," said Charles Walton, senior vice president of security and board member of the Smart Card Alliance, a nonprofit smart card-oriented organization based in New York City. While not yet used in the United States, the cards are used in Europe.

For insurers, the cards will be a secure storage system for pertinent information, including insurance benefits, provider data, coverage types, contact information for insurers and emergency medication information about a patient. "Privacy and security are the driving forces that lead to the adoption of smart-card technology," said Donna Farmer, president and chief executive officer of the Smart Card Alliance.

The Smart Card Industry Association estimates that nearly 2.8 billion smart cards have been distributed worldwide so far, said Howard Sachar, global manager of banking and the insurance research center for the IBM Research Team. IBM is involved with the development of smart-card chips and infrastructure.

Developed in Europe during the 1970s, smart-card technology started as disposable payment cards--or calling cards--for telephone usage. They have since extended into a variety of industries, particularly financial-services for automated teller machine access.

The Connecticut Hospital Association, along with several states, recently began a pilot program to look at the use of interoperable e-mail with digital certificates--certificates issued to doctors at different healthcare providers that can be used to encrypt and decrypt mail.

"While the pilot is storing information in a browser, the natural evolution is toward the use of smart cards in a more consumer-oriented setting," Walton said.

Walton anticipates that the first smart-card application in the healthcare environment will allow providers to encrypt messages and gain access to patient information securely over the Internet. "I think we'll begin to see some Sort of deployments of this process over the coming years," he said.

i-Cards

Although Empire Blue Cross Blue Shield's i-Card doesn't use smart-card technology it's similar in that it provides immediate access to patient information through use of a plastic card.

Introduced last year, Empire's I-Card consolidates member information onto one card. Members will no longer have to carry separate cards for pharmacists, physicians and other providers. The i-Card allows members to use their identification number to store and retrieve personal health information from a secure Web site.

Medical offices swipe the card which sports icons illustrating the member's coverage, to determine eligibility and precertification information. "With one swipe of the card at the doctor's office, the information is sent via the Internet directly to our mainframe computer," said Deborah Bohren, vice president of public affairs. Through use of the i-Card and Empire Blue Cross Blue Shield's recently launched physician portal, claims can be processed within seconds, she said.

The magnetic strip on the back of the card eliminates keyboarding errors when processing claims. "About 50% of claims denials are the result of two numbers being transposed on an ID number," said Bohren, adding that the i-Card increases the first-pass rate of processing claims correctly.

Physician Modules

About 80% of all health-care costs can be traced to a doctor's order, said Derrick Hollings, president and chief executive officer of Request Health Corp. Therefore, physicians are constantly faced with time restraints and stretched budgets.

Request Health is using the Internet to help meet those challenges. The company developed a digital replica of a physician's office, which automates many of the tasks currently performed in traditional bricks-and-mortar practices. Physicians are offered a free customized Web site attached to Request Health's database, giving the physician the ability to register patients as members in the site.

Five major areas are concentrated on the site-prescription refill, appointments, registration, record release and referrals. Insurers also will benefit from the module, particularly with member management, customer service and primary-care physician selection. "Insurers can offer their members the ability to have a private account at their doctor's site, where historical information can be accumulated and made available to them over time," Hollings said. Members then become the owners of the information, and as they move between physicians and across insurance networks, their information moves with them.

"This is establishing an Internet presence for community physicians, who are agents of the insurance company Most insurers are managing and administering plans by fax or phone, which has become an inefficient way, while others have given up the process altogether," Hollings said. Insurers would be able to implement their permission rules through the system, and, under certain circumstances, more than 50% of all requests for services would be automatically approved. "If insurers mandated that all providers have a Web site, we could provide that insurers could now have total surveillance on the movement of the patient or consumption of resources," he said.

Electronic Prescribing

Nearly 200 Massachusetts doctors have recently embarked on a pilot program that employs wireless handheld organizer technology to electronically prescribe drugs. In April, Tufts Health Plan and AdvancePCS, Tufts' pharmacy benefits manager (PBM), announced that they were sponsoring the cooperative effort to measure and interpret the value of providing electronic prescribing and other features. The goal was to improve quality of care, manage drug costs and reduce workflow inefficiencies.

Physicians in the pilot program are provided with a PocketScript electronic prescription writer that uses a secure, Internet-connected Compaq iPAQ personal digital assistant. The device is equipped with a wireless antenna and software that accesses data from the practice-management system. Physicians can select the patient's name and the drug by using a touch screen or voice recognition. The device immediately displays whether the drug is accepted under the Tufts Health Plan or another area health plan, as well as the copayment category for Tufts Health Plan members. The physician then can prescribe the drug by touching the screen, which transmits the prescription directly to the pharmacy of the patient's choice via a secure fax.

The technology is designed to reduce medical errors associated with illegible or misread handwriting, while improving the information available to physicians at the point a prescription is written. In addition, it is anticipated to create a significant reduction in call volume in physicians' offices. "Nearly 30% of calls from pharmacies that come into doctors' offices are for refills or questions about a particular prescription or drug interaction," said Deborah Whitehead, assistant vice president of allied health services at Tufts Health Plan.

"There are other devices similar to this out there, but what makes this pilot unique is that we will be interfacing the complete drug history with the PBM," Whitehead said.

While the prescription writer isn't expected to significantly reduce drug expenditures, Thfts expects in the long term it may produce savings in aggregate medical costs by eliminating or reducing admissions as a result of drug interactions or members' noncompliance with a drug regime.

Phase II of the pilot will feature the ability to view a Tufts Health Plan patient's drug history with the PBM, thereby enabling a physician to provide the highest quality of care to his or her patients.

E-Consults

Recent studies have shown that as questions and concerns related to health care arise, patients want to use e-mail for quick interaction with their health-care providers. But one question remains--are e-mail consultations similar to regular office visits?

E-consults--medically necessary consultations occurring over the Internet--may be substantially similar to office visits, according to Blue Cross Blue Shield of South Carolina. Through the insurer's pilot program, patients can go to their provider's Web site and access information about the physician. If the provider accepts e-mail consultations, the patient can link directly to the physician through his or her site.

"We are piloting that if the physician responds to the broad parameters we established, e-consults are similar to advice they would give in their office or hospital," said David Boucher, vice president of managed services. Physicians can then submit a claim through the organization's Web site and be reimbursed $15 for the consultative service. In the pilot phase, the service is not subject to patient deductible or copayment amounts, Boucher said.

What this means for insurers is the possibility of fewer office visits for their members. "In addition, this will hopefully change the service utilization, allowing doctors to be more productive in their time and be satisfied with the outcome," Boucher said. This was the case for a doctor in Dartmouth who extended the time between visits for his chronically ill patients from two to four months, replaced with 10- to 15-minute phone calls in the interim. The result was a decrease in medical office visits and hospitalizations. "It is our hope that the pilot will provide similar benefits," Boucher said.

Biometrics

Although biometric technology is more heavily concentrated in banking and securities areas, researchers believe that it may one day have a place in the insurance industry.

Biometrics ensures security by capturing a digital image of a tangible body part with a camera, scanner or other type of sensor. The image is then converted through an algorithm to a string of numbers.

When a person tries to gain access to a network or application, a scan of the body part generates a string of numbers that are matched against the template stored in the database. "The match generates a score, and depending upon how close the two samples are, you will or won't be able to gain access to a building, computer or application," said Jennifer Schmidt, analyst with Meridien Research. Meridien recently examined the use of biometric technology in the financial-services area.

There are eight common forms of biometric technology being used today, including facial, finger, iris, hand, retina, signature and voice scans, as well as keystroke dynamics.

In addition to security, biometrics provides both convenience and versatility. Some people, however, are skeptical about its use. "Accuracy is not as high as it should be," Schmidt said. "In addition, some consumers are finding it to be intrusive and are leery about imaging body parts, such as the eye."

Several financial giants have moved into the biometrics spectrum. Chase Manhattan Corp. is using finger scans, while Charles Schwab & Co. has implemented voice scan and Wells Fargo has implemented facial scans into their security operations.

The growth of the Internet, mobile banking, e-commerce and mobile commerce will result in an increased use of the technology, Schmidt said. "As the cycle of technology goes on, we'll see it more in terms of mobile devices." Meridien Research anticipates that finger scans and voice scans will be most widely used because they are both reasonable to implement and easy to use on devices such as cell phones.

Meridien Research plans to continue researching the use of biometric technology in the coming months, and Schmidt said insurance is one of the industries that might be researched.