More Neat Stuff: Medical Swipe Cards

There is a simple way to reduce health care costs and improve coordination of care and patient satisfaction: widespread adoption among doctors, hospitals and health insurance companies of magnetic stripe health care ID cards.

Everyone with health insurance has a card that they give to the receptionist at the doctor’s office. The receptionist usually makes a photocopy of the card and then fills out all the forms by hand or through repetitive data entry to file a claim with the insurance company.

With a health care ID card that uses magnetic stripe technology, the patient simply swipes the card through a device similar to a credit card terminal, and the physician’s office has access to all appropriate patient-eligibility information and personal health records. Some of the information will even automatically populate into the claim form for the physician’s office staff with the swipe of the card, enabling them to submit claims online and receive approvals from the insurance company in a matter of seconds.

The new cards have a number of built-in protections for consumers – information is never stored directly on the card, and access through the card can only be made with the patient’s permission.

Unlike many other industries facing revolutionary new technologies, the medical industry has been slow to adapt swipe card technology. In fact, according to a recent survey published in the New England Journal of Medicine, just 17 percent of all physicians’ offices use any kind of advanced card technology.

Imagine the savings in administrative costs to both health care providers and insurance companies if most or all health care facilities used swipe cards. Millions of administrative transactions per day would become faster and easier. In fact, the Medical Group Management Association (MGMA) estimates that machine-readable patient ID cards could save physician offices and hospitals as much as $1 billion a year by eliminating unnecessary administrative efforts and denied claims. MGMA recently launched a campaign to promote machine-readable cards.

The cost to install card readers is relatively minor, and once installed, the swipe card soon pays for itself in lower administrative costs.

I encourage all health care providers and insurance carriers to adopt swipe card technology using the new universal standards. Other industries have seen rapid adoption of information technologies that lead to cost savings and quality improvements. The health care industry has an opportunity to follow suit, and thereby make a tremendous impact in reducing costs, enhancing quality and playing a critical role in positive health care reform.