Smart cards have had significant positive outcomes on our consumer world since they first became available with many industries having used smart card technology very successfully. In addition to its robustness of being able to store information, its stored value capabilities can be used for multiple functions. The use of smart cards offers potential solutions to improve efficiency by streamlining work processes. Finally, data stored can be easily read and modified with the right access but it can also be protected against unauthorized viewing. This paper reviews the evolution of the smart card as well as the present and future uses of this technology with focus on the health care industry. In addition, this paper also examines security features that offer ways to significantly reduce identity theft and fraud which are critical in maintaining patient privacy and security of protected health information.
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A brief history of smart cards goes back to the early 1950s when Diner’s Club manufactured the first plastic card to use for financial payments. Using a synthetic material called PVC was a major improvement for longer lasting cards over conventional paper-based cards used at that time. Those who held these prestigious cards were allowed to pay with their good name rather than cash. The first credit cards were issued by Bank of America and Interbank and their cards later became known as VISA and MasterCard. These early cards were limited in storing embossed identification such as names, numbers, or codes. In the 1970s this evolved to a machine-readable format where the introduction of the magnetic strip allowed for additional digitized information to be stored on the cards. While magnetic stripe cards are commonly used today, this technology has a critical flaw in that anyone with access to the appropriate device can read, re-write, or delete data. For this reason, it is not an acceptable medium for storing sensitive data. In late 1960s and early 1970s, European countries introduced the integrated circuit card (ICC) which was a huge improvement over the magnetic stripe technology. As cryptography made great progress and security mechanisms could be proved, smart cards proved to be ideal for safely storing information on these chip-incorporating cards. While the smart card began to be mass-produced in the late 1970s, improvements to these cards continued to be made. The first chip cards contained only memory modules and today, they possess increasingly memory and computation power, capable of executing commands from the outside, and running separate programs. Access to the data stored on the programmable smart card is controlled by the card itself. The smart card reached a pivotal point in 1984 when ATM bank cards with chips were successfully tested. Around that same time in Europe, The French Postal and Telecommunications services carried out a successful field trail with telephone cards and two years later, millions of these cards were in circulation. In 1994, Europay, MasterCard and VISA agreed on specifications for the use of smart cards in banking (Chiedozie, 2009). Today, the use of smart cards is applied to several activities.
One of the most widely accepted uses of smart cards are in its stored value which has been especially useful for creating cashless transactions that can be audited. Stored value is much more convenient and safer than cash. This technology paves the way for more efficient work processes that facilitates electronic payment of health care benefits transmitting a stored-value card account payment on behalf of the insurance company, government payer, or self-insured individual. Along with the authorized benefit amount, an explanation of benefits would be transmitted at the same time. Second, stored-value cards also include a financial mechanism. Health savings account payments are made as credit or debit payments from a health savings account held at a bank. While there are tax advantages to health savings accounts, this type of payment mechanism could monitor of how these dollars are spent. Value-stored smart cards could effectively be used where only approved vendors could accept the stored value. Third, several healthcare companies are rolling out gift cards similar to the ones offered by retail stores. Some of these can be used to help cover out-of-pocket medical expenses or insurance premiums while others give discounts on specific services or purchases (“Alternate health care,” 2009).. Finally, it is not uncommon for low income populations to not use banking services. To ensure their access to healthcare facilities, local and county government could work with financial institutions to provide underserved residents with stored value cards. These stored-value cards offer underserved consumers that ability to seek health care as needed.
Use of a smart healthcare ID card streamlines administrative procedures by reducing the resources dedicated to those functions. A considerable amount of time and effort is required to admit a patient into the hospital. As a result of busy waiting rooms, limited staffing resources, language barriers, and transcription of information taken from handwritten forms, many opportunities for error exist. Smart cards provide ready access to accurate and current patient information and much of the admissions process can be automated with this technology. Patients can pursue on-line pre-registration by downloading information onto their smart card. Registration can occur quickly with ease by inserting an ID card in a reader at an unmanned kiosk or station which significantly reduces the need for staff to perform that function. Better medical records management eliminates costly duplicate records. Claims reimbursement can be expedited because complete and accurate information was provided during the registration process and eliminating errors associated with language or manual data greatly reduces the frequency of denied or delayed claims. Lastly, this provides for better continuity of care because it enables instantaneous access to a comprehensive medical record by many healthcare providers.
Fraud can best be reduced through the use of smart card technology which has an embedded computer chip that encrypts messages, making it very difficult for unauthorized users to access or use the information on a smart card or create duplicate cards. These capabilities help protect patients from identity theft because they can securely store various identity credentials on the card, making it difficult to forge or steal this information. Digital signatures can be used to guarantee that information has not been modified, similar to a tamper-proof seal. As a result, consumers, healthcare institutions and others would be less vulnerable to the effects of fraud and the cost of fraud prevention would decrease. The use of these cards would also help meet HIPAA privacy and security requirements.
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In conclusion, smart cards are the only card technology that can process as well as store information. Smart card technology continues to deliver powerful new solutions for a number of different markets and still, there is no end to the potential uses. Their special features offer solutions to some key issues of security and confidentiality and they have the potential to play a pivotal role in effectively managing health information.
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