Embracing Possibilities

February 1, 2005

Following the flow of dollars through the healthcare system can be a dizzying experience, especially as billions of transactions increasingly shift responsibility to consumers, as they have recently. Co-founder of the strategic advisory firm Y&M Partners in Beverly Hills, Calif., Beverly Macy specializes in forecasting just what will happen with each new shift and how consumers, employers, providers and plans can be prepared.

Among the opportunities she sees emerging right now in healthcare delivery are consumer-based mobile technologies and the melding of insurance and financial services.

A. There's now an increase in healthcare benefits that require financial management. We're seeing smart card technology and debit card technology gain acceptance in the healthcare consumer sector. M-commerce, or mobile commerce, is the next frontier for payment stream technology. It's being used in retail or lifestyle sectors currently in Asia and Europe where you can receive, for example, coupons delivered to your mobile phone. And there's the ability to do some payment transactions via the cell phone beginning to take place.

There are a number of plans and large employer groups who offer some kind of debit card to pay for any or all of the benefit products. In some cases you'll see the products stacked on the card so the flexible spending account, health reimbursement account and HSA are all on one card.

In healthcare, m-commerce offers an alternative to smart card or debit card payment stream solutions because consumers want simple technologies that will pay their out-of-pocket and other expenses directly.

Q. So you see the cell phone as the new vehicle for consumers to manage and pay for their healthcare. Is that truly a realistic application, or is it more of a fun gadget that few people will really adopt?

A. The cell phone is becoming ubiquitous. As it turns out, more people have cell phones than are connected to the Internet. When people leave their homes, they take their keys and their cell phones with them. It's becoming a stronger computing platform, and a lot of people are eyeing it as the new member touch point. It is an authenticatable and secure computing platform. The phone would incorporate primarily radio frequency identification technology. You could use your phone not only to pay for services but also to do point-of-sale adjudication.

For example, I'm at the pharmacy and I want to know if I have enough money in my account and if the drug qualifies for the benefit, and the phone could display that. Using cellular technology in healthcare is not new, but using cell phones to pay for things is new. This application is probably three to five years away.

Q. Everyone talks about slow adoption of new technology among providers. Will physician offices be ready to adapt their administrative processes to cell-phone-based payment? It sounds as if physicians will need to have some type of reader device on hand.