Smart Card Project Spans Three Cities

By Steve LeSueur, Staff Writer



Siemens Information and Communication Networks Inc. is leading a three-city demonstration project in which more than 25,000 parents will use smart cards for public health programs, making it the largest undertaking of its kind at the state and local level.

The Health Passport Project, which was launched June 2 in Bismarck, N.D., will test whether electronic smart cards can cut costs, reduce fraud, streamline services and improve the quality of health care to women and children that use public health programs. Also participating in the project, which will last at least 18 months, are Cheyenne, Wyo., and Reno, Nev.

Those targeted for this project are pregnant women, mothers and children who are eligible for programs including Head Start; Women, Infants and Children (WIC); Medicaid; and Maternal and Child Health Services. The state and public health organizations that sponsor these programs, along with a number of private foundations, are providing the $3.5 million to $4 million cost of the entire demonstration.

"This is quite significant because it's making use of smart cards in multiple jurisdictions with different applications," said Lesley Kao, a senior analyst in the global public sector for Dataquest, a research arm of the GartnerGroup, Stamford, Conn.

Siemens Information and Communication Networks designed the demonstration project and is serving as the systems integrator under a $2.3 million contract. The Boca Raton, Fla., company has 7,000 U.S. employees and generated sales of $2 billion last year.

Other companies participating with Siemens in the demonstration include: Dreifus Associates, Orlando, Fla., which is providing site management services, training and educational materials; Open Domain Inc., San Ramon, Calif., which is programming the smart cards; and Stored Value Systems, Louisville, Ky., which is responsible for the WIC electronic benefits transfer application. Siemens' Infineon Technologies of Munich, Germany, is providing the computer chips used in the smart card devices.

The Health Passport card stores information on an integrated microprocessor chip located within the card, and so it is more sophisticated than a "memory" card, such as a phone card. Also known as a "chip card," it can perform multiple functions and new applications can be added to it. A chip card costs about six times as much as a memory card, said Kao.

The electronic smart cards allow the users to carry health- and benefits-related information to doctors, clinics, schools and other places. This includes demographic information, health records, appointments, and, in Cheyenne and Reno, WIC food benefits.

Project officials are considering a second phase in which the U.S. Navy would use Health Passport cards for service personnel who qualify for selected public health programs, said Chris McKinnon, project leader for the Western Governors' Association, Denver. The association, which represents governors in the western states and territories, is overseeing the project and handling administrative duties such as soliciting bids and selecting the contractor for the effort.

The advantage of the Health Passport cards is that they provide people with a comprehensive health profile in a single place, said Mike Irvine, project manager for Siemens' Health Passport team.

Consequently, there will be less gaps in information, less duplication, and less time spent ? by both patients and health-care providers ?processing paperwork or scrambling to find up-to-date information about such things as a child's allergies or most recent immunization shots.

In rural states like North Dakota, for example, many clinics and facilities are open only one or two days a week. "It's important that clients have accurate information with them because it may be difficult to get that information quickly if a clinic is closed on the day they need it," said Bertie Bishop, project manager for North Dakota's Health Passport project.

And with more complete medical information, people can get health benefits that they otherwise would not know they are entitled to, said Irvine.

Currently, 900 people are using Health Passport cards in Bismarck, but that number will reach 5,000 when the program is completely up and running, Bishop said. Parents can view the information on their cards and get printouts at kiosks that will be installed in public places, such as Head Start offices or an all-night supermarket. That way if participants need to provide an immunization history of their children for a school or camp, they can get it quickly and at their own convenience, she said.

Worldwide use of smart "chip" cards is expected to increase dramatically during the next several years, according to a July forecast by Dataquest.

In health care applications, smart card revenue is projected to grow from $59.2 million in 1998 to $145.3 million in 2003, an annual compounded growth rate of 19.7 percent; in transportation applications, from $8.6 million in 1998 to $69.3 million in 2003, an annual compounded growth rate of 51.8 percent; and in identification card applications, from $14.8 million in 1998 to $117.6 million in 2003, an annual compounded growth rate of 51.4 percent.

"These applications will be predominately in the public sector," said Kao, who recently authored a study on smart card use in the public sector.

The United States is lagging behind Europe in the use of smart cards, in part because of privacy concerns by citizens using smart cards, industry officials said. By the end of 1999 in France, for example, everyone in the nation's social security system will use a smart card for reimbursement of health care fees, said Kao.

One of the goals of the Health Passport Project is to demonstrate that smart cards can maintain the users' privacy while giving them greater control over their health information. Project officials said this would enable participants to take more responsibility for their health and the health of their families.

Federal agencies like the General Services Administration have taken the lead in using smart cards in the public sector, but the states also are looking more closely at smart cards, industry officials said.

Texas and New Mexico, for example, are considering smart cards for food stamps. And the six-state New England Partners Project is in the beginning stages of a program that uses smart cards to provide users with access to health services and benefits. A pilot program would start in the first quarter of 2001.

In addition to Siemens, dozens of U.S. and international companies likely would be interested in these new smart card programs.

IBM Corp., Unisys Corp. and KPMG all provide smart card solutions while companies like Hitachi Ltd., Koninklijke Philips Electronics N.V., and STMicroelectronics N.V. provide the electronics for the chip cards.