Erik L. Goldman

DENVER — If federal stimulus money to the tune of $44,000 per physician has warmed more solo and small group practices to the idea of adopting electronic health record systems, the new Health Information Technology for Economic and Clinical Health Act could cool their enthusiasm.

The HITECH law imposes significant responsibility on medical practices in the event of a breach of patients' protected personal health information.

“The statute giveth, and the regulations taketh away,” Gerry Hinkley, a partner specializing in health-information law with a San Francisco law firm, said at the annual conference of the Medical Group Management Association.

HITECH imposes a host of new security obligations on all practices covered by the Health Insurance Portability and Accountability Act (HIPAA).

Most worrisome to the average physician are those that pertain to breaches of health-information security, said Mr. Hinkley.

The law defines “breach” as unauthorized acquisition, access, use, or disclosure of personal health information that compromises the security or privacy of that information and carries significant risk of financial, reputational, or other harm to the subjects of the record in question.

If a breach occurs, the medical practice must notify each patient whose personal health information has been accessed, modified, or inappropriately disclosed because of the breach as soon as possible, but definitely within 60 days of breach discovery. The practice must also post information on its Web site indicating that a breach has occurred.

If the breach potentially affects more than 500 residents of a state, the practice is also obliged to notify local newspapers and other media outlets, as well as the office of the U.S. Health and Human Services Secretary.

“You need to state what happened, when it happened, when it was discovered, the specifics of what was breached, what course of action [the affected] patients have, and what you are doing to mitigate the damage,” said Mr. Hinkley.

He added that these notification rules have technically been in effect since late September, but enforcement won't start until March.

The regulations distinguish between mistaken access to a patient's health record by an authorized person vs. access (especially intentional access) by an unauthorized individual. The former is not considered a breach.

“This is really about prevention of leakage of sensitive health information to unauthorized persons,” he said in defense of the rules.

So if a doctor loses a mobile device or laptop computer that contains patient health records, must he or she call the local media?

That really depends on how well the information has been protected. If the patient files are easily opened, then yes, the lost device would likely constitute a breach. But if the records are well encrypted and password protected, then the information is considered secure and unbreachable, even if the device itself falls into unauthorized hands, Mr. Hinkley noted.

“You really need to talk to your [EHR] vendors about how they encrypt patient data,” Mr. Hinkley advised. He added that electronic communications with patients should, when possible, take place via secure online portals rather than ordinary e-mails or text messages. Material exchanged via e-mail could be considered breachable personal health information, and it's a risk doctors need not take.

HITECH extends a medical practice's responsibility for personal health-information security to all of the practice's business associates, which will include any and all entities with which the practice exchanges potentially sensitive information, including other clinics, vendors, health-information exchanges, regional health-information organizations, e-prescribing gateways, and IT vendors.

“Your business associates are directly responsible to comply with the security rules and can be held accountable to the government for any violations,” Mr. Hinkley said. Business associates are required to quickly report any potential breaches or violations to the practice, but the burden is on the practice to ensure that business associates are in compliance with current rules.

That means that all contracts with business associates—especially new ones—need to contain language addressing personal health-information security, and need to demand compliance with HIPAA and HITECH.

Both HIPAA and HITECH stipulate that the exchange of personal health information among authorized clinical staff must be for “meaningful use.”

Furthermore, only the “minimum necessary” amount of information for that meaningful use should be transferred. Currently, the disclosing party has discretion to determine what is the “minimum necessary” information in a given clinical situation. But there could be serious penalties if that determination is contested.

Both “minimum necessary” and “meaningful use” are very vaguely defined in the existing law, leaving a lot of room for interpretation and risk, Mr. Hinkley said, adding that “if you act unreasonably as far as disclosing more patient information than is necessary for a given case, there's some significant enforcement risk.”

Medical groups and health IT organizations are pushing for the U.S. Health and Human Services Department to clarify those terms so that the ground rules and boundaries are well defined. Mr. Hinkley said to expect more clear definitions between now and next summer, when he expects the government to start enforcing this aspect of HITECH.

Under existing laws, patients have the right to “individually requested privacy restrictions,” and the new laws will sustain and extend those rights. As of next year, patients will have the right to prohibit a medical practice from disclosing any information to insurers about a patient's self-pay services.

The regulation is an effort to protect patients from insurance company abuses around preexisting or potentially high-risk conditions, explained Mr. Hinkley. For example, a patient will now have the right to pay out of pocket for an HIV test and know that his or her serostatus will not be reported to an insurer that might drop the patient or significantly increase premiums if the patient were found to be HIV positive.

Expect heavy HHS enforcement of this and other privacy restriction rights, Mr. Hinkley said. “The [department's] Office for Civil Rights will step up efforts to make the public aware of this. It applies to anything a patient wants to do outside the scope of a health plan. So you will need to have procedures to document these requests and set up policies about how you're going to manage them.”

Penalties for breaches of personal health information and other HIPAA/HITECH violations are significant, ranging from $50,000 to $1.5 million per violation if judges deem that “willful neglect” was involved. But even “unknowing” violations can cost as much as $25,000 per incident. And this is not including any criminal penalties that might be associated with violations.

Mr. Hinkley said to expect significantly ramped-up enforcement of HIPAA and HITECH beginning in the spring.

So “this is a great time to do a HIPAA compliance tune-up,” he added. “Go back and review your electronic health record system [and] all your practice procedures, talk to your vendors, and make sure everything is in compliance.”

DENVER — If federal stimulus money to the tune of $44,000 per physician has warmed more solo and small group practices to the idea of adopting electronic health record systems, the new Health Information Technology for Economic and Clinical Health Act could cool their enthusiasm.

The HITECH law imposes significant responsibility on medical practices in the event of a breach of patients' protected personal health information.

“The statute giveth, and the regulations taketh away,” Gerry Hinkley, a partner specializing in health-information law with a San Francisco law firm, said at the annual conference of the Medical Group Management Association.

HITECH imposes a host of new security obligations on all practices covered by the Health Insurance Portability and Accountability Act (HIPAA).

Most worrisome to the average physician are those that pertain to breaches of health-information security, said Mr. Hinkley.

The law defines “breach” as unauthorized acquisition, access, use, or disclosure of personal health information that compromises the security or privacy of that information and carries significant risk of financial, reputational, or other harm to the subjects of the record in question.

If a breach occurs, the medical practice must notify each patient whose personal health information has been accessed, modified, or inappropriately disclosed because of the breach as soon as possible, but definitely within 60 days of breach discovery. The practice must also post information on its Web site indicating that a breach has occurred.

If the breach potentially affects more than 500 residents of a state, the practice is also obliged to notify local newspapers and other media outlets, as well as the office of the U.S. Health and Human Services Secretary.

“You need to state what happened, when it happened, when it was discovered, the specifics of what was breached, what course of action [the affected] patients have, and what you are doing to mitigate the damage,” said Mr. Hinkley.

He added that these notification rules have technically been in effect since late September, but enforcement won't start until March.

The regulations distinguish between mistaken access to a patient's health record by an authorized person vs. access (especially intentional access) by an unauthorized individual. The former is not considered a breach.

“This is really about prevention of leakage of sensitive health information to unauthorized persons,” he said in defense of the rules.

So if a doctor loses a mobile device or laptop computer that contains patient health records, must he or she call the local media?

That really depends on how well the information has been protected. If the patient files are easily opened, then yes, the lost device would likely constitute a breach. But if the records are well encrypted and password protected, then the information is considered secure and unbreachable, even if the device itself falls into unauthorized hands, Mr. Hinkley noted.

“You really need to talk to your [EHR] vendors about how they encrypt patient data,” Mr. Hinkley advised. He added that electronic communications with patients should, when possible, take place via secure online portals rather than ordinary e-mails or text messages. Material exchanged via e-mail could be considered breachable personal health information, and it's a risk doctors need not take.

HITECH extends a medical practice's responsibility for personal health-information security to all of the practice's business associates, which will include any and all entities with which the practice exchanges potentially sensitive information, including other clinics, vendors, health-information exchanges, regional health-information organizations, e-prescribing gateways, and IT vendors.

“Your business associates are directly responsible to comply with the security rules and can be held accountable to the government for any violations,” Mr. Hinkley said. Business associates are required to quickly report any potential breaches or violations to the practice, but the burden is on the practice to ensure that business associates are in compliance with current rules.

That means that all contracts with business associates—especially new ones—need to contain language addressing personal health-information security, and need to demand compliance with HIPAA and HITECH.

Both HIPAA and HITECH stipulate that the exchange of personal health information among authorized clinical staff must be for “meaningful use.”

Furthermore, only the “minimum necessary” amount of information for that meaningful use should be transferred. Currently, the disclosing party has discretion to determine what is the “minimum necessary” information in a given clinical situation. But there could be serious penalties if that determination is contested.

Both “minimum necessary” and “meaningful use” are very vaguely defined in the existing law, leaving a lot of room for interpretation and risk, Mr. Hinkley said, adding that “if you act unreasonably as far as disclosing more patient information than is necessary for a given case, there's some significant enforcement risk.”

Medical groups and health IT organizations are pushing for the U.S. Health and Human Services Department to clarify those terms so that the ground rules and boundaries are well defined. Mr. Hinkley said to expect more clear definitions between now and next summer, when he expects the government to start enforcing this aspect of HITECH.

Under existing laws, patients have the right to “individually requested privacy restrictions,” and the new laws will sustain and extend those rights. As of next year, patients will have the right to prohibit a medical practice from disclosing any information to insurers about a patient's self-pay services.

The regulation is an effort to protect patients from insurance company abuses around preexisting or potentially high-risk conditions, explained Mr. Hinkley. For example, a patient will now have the right to pay out of pocket for an HIV test and know that his or her serostatus will not be reported to an insurer that might drop the patient or significantly increase premiums if the patient were found to be HIV positive.

Expect heavy HHS enforcement of this and other privacy restriction rights, Mr. Hinkley said. “The [department's] Office for Civil Rights will step up efforts to make the public aware of this. It applies to anything a patient wants to do outside the scope of a health plan. So you will need to have procedures to document these requests and set up policies about how you're going to manage them.”

Penalties for breaches of personal health information and other HIPAA/HITECH violations are significant, ranging from $50,000 to $1.5 million per violation if judges deem that “willful neglect” was involved. But even “unknowing” violations can cost as much as $25,000 per incident. And this is not including any criminal penalties that might be associated with violations.

Mr. Hinkley said to expect significantly ramped-up enforcement of HIPAA and HITECH beginning in the spring.

So “this is a great time to do a HIPAA compliance tune-up,” he added. “Go back and review your electronic health record system [and] all your practice procedures, talk to your vendors, and make sure everything is in compliance.”

DENVER — If federal stimulus money to the tune of $44,000 per physician has warmed more solo and small group practices to the idea of adopting electronic health record systems, the new Health Information Technology for Economic and Clinical Health Act could cool their enthusiasm.

The HITECH law imposes significant responsibility on medical practices in the event of a breach of patients' protected personal health information.

“The statute giveth, and the regulations taketh away,” Gerry Hinkley, a partner specializing in health-information law with a San Francisco law firm, said at the annual conference of the Medical Group Management Association.

HITECH imposes a host of new security obligations on all practices covered by the Health Insurance Portability and Accountability Act (HIPAA).

Most worrisome to the average physician are those that pertain to breaches of health-information security, said Mr. Hinkley.

The law defines “breach” as unauthorized acquisition, access, use, or disclosure of personal health information that compromises the security or privacy of that information and carries significant risk of financial, reputational, or other harm to the subjects of the record in question.

If a breach occurs, the medical practice must notify each patient whose personal health information has been accessed, modified, or inappropriately disclosed because of the breach as soon as possible, but definitely within 60 days of breach discovery. The practice must also post information on its Web site indicating that a breach has occurred.

If the breach potentially affects more than 500 residents of a state, the practice is also obliged to notify local newspapers and other media outlets, as well as the office of the U.S. Health and Human Services Secretary.

“You need to state what happened, when it happened, when it was discovered, the specifics of what was breached, what course of action [the affected] patients have, and what you are doing to mitigate the damage,” said Mr. Hinkley.

He added that these notification rules have technically been in effect since late September, but enforcement won't start until March.

The regulations distinguish between mistaken access to a patient's health record by an authorized person vs. access (especially intentional access) by an unauthorized individual. The former is not considered a breach.

“This is really about prevention of leakage of sensitive health information to unauthorized persons,” he said in defense of the rules.

So if a doctor loses a mobile device or laptop computer that contains patient health records, must he or she call the local media?

That really depends on how well the information has been protected. If the patient files are easily opened, then yes, the lost device would likely constitute a breach. But if the records are well encrypted and password protected, then the information is considered secure and unbreachable, even if the device itself falls into unauthorized hands, Mr. Hinkley noted.

“You really need to talk to your [EHR] vendors about how they encrypt patient data,” Mr. Hinkley advised. He added that electronic communications with patients should, when possible, take place via secure online portals rather than ordinary e-mails or text messages. Material exchanged via e-mail could be considered breachable personal health information, and it's a risk doctors need not take.

HITECH extends a medical practice's responsibility for personal health-information security to all of the practice's business associates, which will include any and all entities with which the practice exchanges potentially sensitive information, including other clinics, vendors, health-information exchanges, regional health-information organizations, e-prescribing gateways, and IT vendors.

“Your business associates are directly responsible to comply with the security rules and can be held accountable to the government for any violations,” Mr. Hinkley said. Business associates are required to quickly report any potential breaches or violations to the practice, but the burden is on the practice to ensure that business associates are in compliance with current rules.

That means that all contracts with business associates—especially new ones—need to contain language addressing personal health-information security, and need to demand compliance with HIPAA and HITECH.

Both HIPAA and HITECH stipulate that the exchange of personal health information among authorized clinical staff must be for “meaningful use.”

Furthermore, only the “minimum necessary” amount of information for that meaningful use should be transferred. Currently, the disclosing party has discretion to determine what is the “minimum necessary” information in a given clinical situation. But there could be serious penalties if that determination is contested.

Both “minimum necessary” and “meaningful use” are very vaguely defined in the existing law, leaving a lot of room for interpretation and risk, Mr. Hinkley said, adding that “if you act unreasonably as far as disclosing more patient information than is necessary for a given case, there's some significant enforcement risk.”

Medical groups and health IT organizations are pushing for the U.S. Health and Human Services Department to clarify those terms so that the ground rules and boundaries are well defined. Mr. Hinkley said to expect more clear definitions between now and next summer, when he expects the government to start enforcing this aspect of HITECH.

Under existing laws, patients have the right to “individually requested privacy restrictions,” and the new laws will sustain and extend those rights. As of next year, patients will have the right to prohibit a medical practice from disclosing any information to insurers about a patient's self-pay services.

The regulation is an effort to protect patients from insurance company abuses around preexisting or potentially high-risk conditions, explained Mr. Hinkley. For example, a patient will now have the right to pay out of pocket for an HIV test and know that his or her serostatus will not be reported to an insurer that might drop the patient or significantly increase premiums if the patient were found to be HIV positive.

Expect heavy HHS enforcement of this and other privacy restriction rights, Mr. Hinkley said. “The [department's] Office for Civil Rights will step up efforts to make the public aware of this. It applies to anything a patient wants to do outside the scope of a health plan. So you will need to have procedures to document these requests and set up policies about how you're going to manage them.”

Penalties for breaches of personal health information and other HIPAA/HITECH violations are significant, ranging from $50,000 to $1.5 million per violation if judges deem that “willful neglect” was involved. But even “unknowing” violations can cost as much as $25,000 per incident. And this is not including any criminal penalties that might be associated with violations.

Mr. Hinkley said to expect significantly ramped-up enforcement of HIPAA and HITECH beginning in the spring.

So “this is a great time to do a HIPAA compliance tune-up,” he added. “Go back and review your electronic health record system [and] all your practice procedures, talk to your vendors, and make sure everything is in compliance.”

If you want to see the impact that health care costs have had on corporate America, just take a look at the measures some companies are taking to encourage employee health.

Paid leave, reduced insurance copayments and premium shares, as well as straight cash rewards are among the inducements corporations now offer employees who participate in company-sponsored wellness programs centered on weight loss, smoking cessation, healthy eating, and ongoing management of chronic diseases.

When corporate wellness programs first emerged 2 decades ago, companies hoped that they would be able to woo participants with the promise of better health and inexpensive gifts like T-shirts, and emblazoned water bottles, ant the tchotchke era is over, according to leaders in the field, who spoke at a conference on wellness programs sponsored by the World Research Group.

These days, CEOs who want employee participation in wellness programs are putting real money on the table. The myriad incentive programs now in play, and the size of the rewards—which can reach thousands of dollars per employee per year on top of the costs of implementing the programs—underscore the lengths some companies are willing to go to get their people healthy.

The first step in most corporate wellness plans is an employee-completed health risk assessment (HRA), a tool used to identify employees' risk for diabetes, heart disease, cancer and other serious diseases, and to guide nutrition and fitness plans aimed at prevention.

Some companies are offering cash incentives just for completing the HRA. For larger companies, that can become a significant line item.

A WebMD survey of more than 20,000 employees participating in corporate wellness plans at eight U.S. companies shows that when it comes to inducements, employee expectations are high, according to Larry Chapman, senior vice president of WebMD Health Services.

Almost half (49%) of respondents said their preferred incentive was a lower monthly health insurance premium, something Mr. Chapman said more companies are beginning to offer. Thirty-three percent said they preferred cash rewards. Gift cards were favored by 9%, and 1% said that they would respond to logo-imprinted merchandise.

He added that corporate leaders have learned some hard lessons in their 20 years' experience with wellness plans. For one, they have learned what many physicians could have told them: Most people are not intrinsically motivated to improve their health, and it takes a combination of carrots and sticks.

They also are learning how to create meaningful incentives by listening to their employees' wishes, which usually come down to time and money. Lastly, they are learning that healthy behaviors don't occur in a vacuum, and they don't just happen. They're part of a culture of health that involves community and family outreach.

The challenge for employers, according to Stuart Slutsky, chief marketing officer for Vitality Health Engagement Systems, is to properly size the incentives and link them to behaviors that will ultimately lead to net reductions in overall health care spending. Mr. Sluksky's firm provides wellness programs under contract to large corporations and serves over 1.5 million employees across the globe.

The Vitality program offers employees multiple chances to earn employer-subsidized “Vitality Bucks” that can be redeemed for fitness club memberships, hairfares, moporting goods, homd more. It's akin to a frequent flyer program: The more an employee engages in ongoing health-promoting practices, the more Vitality Bucks he or she earns.

The Kellogg Company, as part of an effort to return to its roots as a health and nutrition company, has one of the most comprehensive and proactive corporate wellness programs in the country. Employees have opportunities to shave up to $1,100 per year off their health insurance premiums if they complete an HRA, demonstrate that they are non-smokers (or participate in a cessation program), and engage in other healthy lifestyle change, said David Tanis, one of the company's health promotion specialists.

Kellogg's employees have opportunities to earn additional rewards for getting vaccinated against influenza, meeting weight loss goals, and taking part in company fitness challenges.

Patti Clavier, manager of Intel Corporation's “Health For Life” program, said her company offers employees a $25 American Express gift card for scheduling a health check—getting a quick blood draw and blood-pressure check—and another $75 for completing a thorough online HRA developed by the Mayo Clinic. She estimated that the program costs Intel roughly $4 million per year, just for its U.S. employees.

Some companies find that paid time off is even more of an incentive than premium reductions or cash rewards.

“This is particularly true for higher-ranking employees who are already well compensated,” said Tanya Lewis-Walls, senior director of UnitedHealth Group's Clinical Solutions wellness program.

Cathy Murphy, vice president of human resources for Blue Shield of California, strongly agreed. Under its new WellVolution program, the insurer offers its employees a day off just for completing an HRA and undergoing some basic biometric testing. Ms. Murphy said 52% of all company employees have now taken advantage of this.

All that paid leave cost the company $2 million last year. “It's a big commitment, but it is very important,” she said.

If you want to see the impact that health care costs have had on corporate America, just take a look at the measures some companies are taking to encourage employee health.

Paid leave, reduced insurance copayments and premium shares, as well as straight cash rewards are among the inducements corporations now offer employees who participate in company-sponsored wellness programs centered on weight loss, smoking cessation, healthy eating, and ongoing management of chronic diseases.

When corporate wellness programs first emerged 2 decades ago, companies hoped that they would be able to woo participants with the promise of better health and inexpensive gifts like T-shirts, and emblazoned water bottles, ant the tchotchke era is over, according to leaders in the field, who spoke at a conference on wellness programs sponsored by the World Research Group.

These days, CEOs who want employee participation in wellness programs are putting real money on the table. The myriad incentive programs now in play, and the size of the rewards—which can reach thousands of dollars per employee per year on top of the costs of implementing the programs—underscore the lengths some companies are willing to go to get their people healthy.

The first step in most corporate wellness plans is an employee-completed health risk assessment (HRA), a tool used to identify employees' risk for diabetes, heart disease, cancer and other serious diseases, and to guide nutrition and fitness plans aimed at prevention.

Some companies are offering cash incentives just for completing the HRA. For larger companies, that can become a significant line item.

A WebMD survey of more than 20,000 employees participating in corporate wellness plans at eight U.S. companies shows that when it comes to inducements, employee expectations are high, according to Larry Chapman, senior vice president of WebMD Health Services.

Almost half (49%) of respondents said their preferred incentive was a lower monthly health insurance premium, something Mr. Chapman said more companies are beginning to offer. Thirty-three percent said they preferred cash rewards. Gift cards were favored by 9%, and 1% said that they would respond to logo-imprinted merchandise.

He added that corporate leaders have learned some hard lessons in their 20 years' experience with wellness plans. For one, they have learned what many physicians could have told them: Most people are not intrinsically motivated to improve their health, and it takes a combination of carrots and sticks.

They also are learning how to create meaningful incentives by listening to their employees' wishes, which usually come down to time and money. Lastly, they are learning that healthy behaviors don't occur in a vacuum, and they don't just happen. They're part of a culture of health that involves community and family outreach.

The challenge for employers, according to Stuart Slutsky, chief marketing officer for Vitality Health Engagement Systems, is to properly size the incentives and link them to behaviors that will ultimately lead to net reductions in overall health care spending. Mr. Sluksky's firm provides wellness programs under contract to large corporations and serves over 1.5 million employees across the globe.

The Vitality program offers employees multiple chances to earn employer-subsidized “Vitality Bucks” that can be redeemed for fitness club memberships, hairfares, moporting goods, homd more. It's akin to a frequent flyer program: The more an employee engages in ongoing health-promoting practices, the more Vitality Bucks he or she earns.

The Kellogg Company, as part of an effort to return to its roots as a health and nutrition company, has one of the most comprehensive and proactive corporate wellness programs in the country. Employees have opportunities to shave up to $1,100 per year off their health insurance premiums if they complete an HRA, demonstrate that they are non-smokers (or participate in a cessation program), and engage in other healthy lifestyle change, said David Tanis, one of the company's health promotion specialists.

Kellogg's employees have opportunities to earn additional rewards for getting vaccinated against influenza, meeting weight loss goals, and taking part in company fitness challenges.

Patti Clavier, manager of Intel Corporation's “Health For Life” program, said her company offers employees a $25 American Express gift card for scheduling a health check—getting a quick blood draw and blood-pressure check—and another $75 for completing a thorough online HRA developed by the Mayo Clinic. She estimated that the program costs Intel roughly $4 million per year, just for its U.S. employees.

Some companies find that paid time off is even more of an incentive than premium reductions or cash rewards.

“This is particularly true for higher-ranking employees who are already well compensated,” said Tanya Lewis-Walls, senior director of UnitedHealth Group's Clinical Solutions wellness program.

Cathy Murphy, vice president of human resources for Blue Shield of California, strongly agreed. Under its new WellVolution program, the insurer offers its employees a day off just for completing an HRA and undergoing some basic biometric testing. Ms. Murphy said 52% of all company employees have now taken advantage of this.

All that paid leave cost the company $2 million last year. “It's a big commitment, but it is very important,” she said.

If you want to see the impact that health care costs have had on corporate America, just take a look at the measures some companies are taking to encourage employee health.

Paid leave, reduced insurance copayments and premium shares, as well as straight cash rewards are among the inducements corporations now offer employees who participate in company-sponsored wellness programs centered on weight loss, smoking cessation, healthy eating, and ongoing management of chronic diseases.

When corporate wellness programs first emerged 2 decades ago, companies hoped that they would be able to woo participants with the promise of better health and inexpensive gifts like T-shirts, and emblazoned water bottles, ant the tchotchke era is over, according to leaders in the field, who spoke at a conference on wellness programs sponsored by the World Research Group.

These days, CEOs who want employee participation in wellness programs are putting real money on the table. The myriad incentive programs now in play, and the size of the rewards—which can reach thousands of dollars per employee per year on top of the costs of implementing the programs—underscore the lengths some companies are willing to go to get their people healthy.

The first step in most corporate wellness plans is an employee-completed health risk assessment (HRA), a tool used to identify employees' risk for diabetes, heart disease, cancer and other serious diseases, and to guide nutrition and fitness plans aimed at prevention.

Some companies are offering cash incentives just for completing the HRA. For larger companies, that can become a significant line item.

A WebMD survey of more than 20,000 employees participating in corporate wellness plans at eight U.S. companies shows that when it comes to inducements, employee expectations are high, according to Larry Chapman, senior vice president of WebMD Health Services.

Almost half (49%) of respondents said their preferred incentive was a lower monthly health insurance premium, something Mr. Chapman said more companies are beginning to offer. Thirty-three percent said they preferred cash rewards. Gift cards were favored by 9%, and 1% said that they would respond to logo-imprinted merchandise.

He added that corporate leaders have learned some hard lessons in their 20 years' experience with wellness plans. For one, they have learned what many physicians could have told them: Most people are not intrinsically motivated to improve their health, and it takes a combination of carrots and sticks.

They also are learning how to create meaningful incentives by listening to their employees' wishes, which usually come down to time and money. Lastly, they are learning that healthy behaviors don't occur in a vacuum, and they don't just happen. They're part of a culture of health that involves community and family outreach.

The challenge for employers, according to Stuart Slutsky, chief marketing officer for Vitality Health Engagement Systems, is to properly size the incentives and link them to behaviors that will ultimately lead to net reductions in overall health care spending. Mr. Sluksky's firm provides wellness programs under contract to large corporations and serves over 1.5 million employees across the globe.

The Vitality program offers employees multiple chances to earn employer-subsidized “Vitality Bucks” that can be redeemed for fitness club memberships, hairfares, moporting goods, homd more. It's akin to a frequent flyer program: The more an employee engages in ongoing health-promoting practices, the more Vitality Bucks he or she earns.

The Kellogg Company, as part of an effort to return to its roots as a health and nutrition company, has one of the most comprehensive and proactive corporate wellness programs in the country. Employees have opportunities to shave up to $1,100 per year off their health insurance premiums if they complete an HRA, demonstrate that they are non-smokers (or participate in a cessation program), and engage in other healthy lifestyle change, said David Tanis, one of the company's health promotion specialists.

Kellogg's employees have opportunities to earn additional rewards for getting vaccinated against influenza, meeting weight loss goals, and taking part in company fitness challenges.

Patti Clavier, manager of Intel Corporation's “Health For Life” program, said her company offers employees a $25 American Express gift card for scheduling a health check—getting a quick blood draw and blood-pressure check—and another $75 for completing a thorough online HRA developed by the Mayo Clinic. She estimated that the program costs Intel roughly $4 million per year, just for its U.S. employees.

Some companies find that paid time off is even more of an incentive than premium reductions or cash rewards.

“This is particularly true for higher-ranking employees who are already well compensated,” said Tanya Lewis-Walls, senior director of UnitedHealth Group's Clinical Solutions wellness program.

Cathy Murphy, vice president of human resources for Blue Shield of California, strongly agreed. Under its new WellVolution program, the insurer offers its employees a day off just for completing an HRA and undergoing some basic biometric testing. Ms. Murphy said 52% of all company employees have now taken advantage of this.

All that paid leave cost the company $2 million last year. “It's a big commitment, but it is very important,” she said.

WASHINGTON – With health savings accounts serving as a point of entry, banks and other financial institutions are rapidly moving into the health care sector, and bankers think they have much to offer in streamlining health care transactions and bringing greater efficiency to the medical world.

In this era of e-commerce, it is difficult to remember a time when cash was not available 24/7 and all of one's personal financial information wasn't just a few mouse-clicks away. It is hard to imagine that at the advent of electronic banking, it was a scary prospect for many people.

In terms of the digitization of health care financing, we are still in that paper-based era, and many people feel distrust for electronic health care management in the same way they felt distrust for electronic banking when it was first introduced.

But bankers engaged in health care believe we're on the cusp of rapid change. Over the next decade, broader adoption of health savings accounts (HSAs) coupled with interoperable personal health records systems on the patient side, and wider use of electronic medical records on the physician side, will bring health care in line with nearly all other industries in terms of maximal use of electronic information exchange.

James S. Gandolfo, senior vice president of PFPC, a division of PNC Financial Services, and chairman of the American Bankers' Association's HSA Council, told people attending the annual fifth World Health Care Congress that banks' involvement in health care could be profoundly transformational.

For one, banks can provide interoperable and widely accepted technology platforms, something the health care sector has yet to develop on its own. Banks are also very tightly regulated and standardized; they have exhaustive experience conducting rapid and high-volume data exchange in a secure environment; they provide multiple but interrelated services for millions of people.

Banking technology has given ordinary people far greater control over their financial lives. “Banks provide established rules for information exchange, and worldwide standardization. That's why your American ATM card and credit card work when you're traveling in Italy,” Mr. Gandolfo said.

PNC Financial Services, which has assets of roughly $90.7 billion and $58.7 billion in total deposits, is the eighth largest treasury management group in the country. It is moving steadily into health care, positioning itself as a health care financial clearinghouse currently serving 1,200 corporate clients, including Medicare and Medicaid programs, Blue Cross/Blue Shield plans, commercial insurance carriers, and pharmacy benefits managers.

As an industry, health care has lagged far behind other industries in terms of information technology investments. Mr. Gandolfo estimated that about $3,000/worker per year is spent on technology advances in the health care sector, while about $7,000/worker per year is spent by other private sector industries, and about $15,000/worker per year is spent in the banking industry.

He said he strongly believes it is time for the health care sector to embrace the technology developed by the banking world, and he doesn't think it will be long before we routinely see card-based health care transactions, real-time information exchange, and real-time financial transaction settlements.

According to Chad Wilkins, who serves as CEO of OptumHealth Bank, the growth of health savings accounts is a major driver of change, and a strong magnet for banks and other financial service firms eyeing the health care sector.

Mr. Wilkins estimated that currently, financial services companies hold about $3.2 billion in HSAs, in 2.2 million accounts that cover health care for around 6.5 million Americans. According to a survey by the industry group America's Health Insurance Plans, 27% of individuals who selected HSAs were previously uninsured. “It is still new, but employees are starting to take advantage of HSAs.”

Bankers like Mr. Wilkins and Mr. Gandolfo want to see those numbers grow. “The biggest issue is education. We need to educate the market, educate consumers, educate policy makers, and educate employers,” Mr. Wilkins said.

OptumHealth Bank is piloting a new HSA debit card that links to a user's personal health record and facilitates transactions for both patient and physician. The “OptumHealth Bank Mastercard” gives real-time access to benefits information, as well as funds. It essentially eliminates claims forms and the attendant processing. Doctors are paid right away and no longer have to wait 60 days for reimbursement.

Both Mr. Wilkins and Mr. Gandolfo said they and others in the health care banking community vigorously oppose proposed federal legislation that would mandate new HSA expenditure substantiation rules. They contend that new regulations would only add costs, create complications, and slow the widespread adoption of HSAs.

One of the primary virtues of banking technology is its capacity to eliminate paper-based transactions, something health care desperately needs to do, Mr. Wilkins said. “Ninety-five percent of current payments to providers and explanations of benefits are still done on paper. That's crazy! It's a staggering amount of paper, and much of this can be computerized.”

He estimated that it costs banks about $1 per paper check or provider remittance advice form, roughly $30 for each voided and reissued paper check, and about $5 per phone call to see what's wrong in a given transaction. Universal electronic claims could save up to $35 billion for health care providers and $1 billion for health care plans.

Mr. Gandolfo said savings on this order are very, very real. A large health care provider group that implemented PNC's E-Healthcare platform realized $2.9 million in annual cost avoidance, and 64% time savings in its accounts receivables. Electronic funds transfers reduced the average time from claims submission to payment by 43%, from 49 days down to 28 days. The average time to make claims adjustments improved by 29%.

The health care congress was sponsored by the Wall Street Journal and CNBC.

WASHINGTON – With health savings accounts serving as a point of entry, banks and other financial institutions are rapidly moving into the health care sector, and bankers think they have much to offer in streamlining health care transactions and bringing greater efficiency to the medical world.

In this era of e-commerce, it is difficult to remember a time when cash was not available 24/7 and all of one's personal financial information wasn't just a few mouse-clicks away. It is hard to imagine that at the advent of electronic banking, it was a scary prospect for many people.

In terms of the digitization of health care financing, we are still in that paper-based era, and many people feel distrust for electronic health care management in the same way they felt distrust for electronic banking when it was first introduced.

But bankers engaged in health care believe we're on the cusp of rapid change. Over the next decade, broader adoption of health savings accounts (HSAs) coupled with interoperable personal health records systems on the patient side, and wider use of electronic medical records on the physician side, will bring health care in line with nearly all other industries in terms of maximal use of electronic information exchange.

James S. Gandolfo, senior vice president of PFPC, a division of PNC Financial Services, and chairman of the American Bankers' Association's HSA Council, told people attending the annual fifth World Health Care Congress that banks' involvement in health care could be profoundly transformational.

For one, banks can provide interoperable and widely accepted technology platforms, something the health care sector has yet to develop on its own. Banks are also very tightly regulated and standardized; they have exhaustive experience conducting rapid and high-volume data exchange in a secure environment; they provide multiple but interrelated services for millions of people.

Banking technology has given ordinary people far greater control over their financial lives. “Banks provide established rules for information exchange, and worldwide standardization. That's why your American ATM card and credit card work when you're traveling in Italy,” Mr. Gandolfo said.

PNC Financial Services, which has assets of roughly $90.7 billion and $58.7 billion in total deposits, is the eighth largest treasury management group in the country. It is moving steadily into health care, positioning itself as a health care financial clearinghouse currently serving 1,200 corporate clients, including Medicare and Medicaid programs, Blue Cross/Blue Shield plans, commercial insurance carriers, and pharmacy benefits managers.

As an industry, health care has lagged far behind other industries in terms of information technology investments. Mr. Gandolfo estimated that about $3,000/worker per year is spent on technology advances in the health care sector, while about $7,000/worker per year is spent by other private sector industries, and about $15,000/worker per year is spent in the banking industry.

He said he strongly believes it is time for the health care sector to embrace the technology developed by the banking world, and he doesn't think it will be long before we routinely see card-based health care transactions, real-time information exchange, and real-time financial transaction settlements.

According to Chad Wilkins, who serves as CEO of OptumHealth Bank, the growth of health savings accounts is a major driver of change, and a strong magnet for banks and other financial service firms eyeing the health care sector.

Mr. Wilkins estimated that currently, financial services companies hold about $3.2 billion in HSAs, in 2.2 million accounts that cover health care for around 6.5 million Americans. According to a survey by the industry group America's Health Insurance Plans, 27% of individuals who selected HSAs were previously uninsured. “It is still new, but employees are starting to take advantage of HSAs.”

Bankers like Mr. Wilkins and Mr. Gandolfo want to see those numbers grow. “The biggest issue is education. We need to educate the market, educate consumers, educate policy makers, and educate employers,” Mr. Wilkins said.

OptumHealth Bank is piloting a new HSA debit card that links to a user's personal health record and facilitates transactions for both patient and physician. The “OptumHealth Bank Mastercard” gives real-time access to benefits information, as well as funds. It essentially eliminates claims forms and the attendant processing. Doctors are paid right away and no longer have to wait 60 days for reimbursement.

Both Mr. Wilkins and Mr. Gandolfo said they and others in the health care banking community vigorously oppose proposed federal legislation that would mandate new HSA expenditure substantiation rules. They contend that new regulations would only add costs, create complications, and slow the widespread adoption of HSAs.

One of the primary virtues of banking technology is its capacity to eliminate paper-based transactions, something health care desperately needs to do, Mr. Wilkins said. “Ninety-five percent of current payments to providers and explanations of benefits are still done on paper. That's crazy! It's a staggering amount of paper, and much of this can be computerized.”

He estimated that it costs banks about $1 per paper check or provider remittance advice form, roughly $30 for each voided and reissued paper check, and about $5 per phone call to see what's wrong in a given transaction. Universal electronic claims could save up to $35 billion for health care providers and $1 billion for health care plans.

Mr. Gandolfo said savings on this order are very, very real. A large health care provider group that implemented PNC's E-Healthcare platform realized $2.9 million in annual cost avoidance, and 64% time savings in its accounts receivables. Electronic funds transfers reduced the average time from claims submission to payment by 43%, from 49 days down to 28 days. The average time to make claims adjustments improved by 29%.

The health care congress was sponsored by the Wall Street Journal and CNBC.

WASHINGTON – With health savings accounts serving as a point of entry, banks and other financial institutions are rapidly moving into the health care sector, and bankers think they have much to offer in streamlining health care transactions and bringing greater efficiency to the medical world.

In this era of e-commerce, it is difficult to remember a time when cash was not available 24/7 and all of one's personal financial information wasn't just a few mouse-clicks away. It is hard to imagine that at the advent of electronic banking, it was a scary prospect for many people.

In terms of the digitization of health care financing, we are still in that paper-based era, and many people feel distrust for electronic health care management in the same way they felt distrust for electronic banking when it was first introduced.

But bankers engaged in health care believe we're on the cusp of rapid change. Over the next decade, broader adoption of health savings accounts (HSAs) coupled with interoperable personal health records systems on the patient side, and wider use of electronic medical records on the physician side, will bring health care in line with nearly all other industries in terms of maximal use of electronic information exchange.

James S. Gandolfo, senior vice president of PFPC, a division of PNC Financial Services, and chairman of the American Bankers' Association's HSA Council, told people attending the annual fifth World Health Care Congress that banks' involvement in health care could be profoundly transformational.

For one, banks can provide interoperable and widely accepted technology platforms, something the health care sector has yet to develop on its own. Banks are also very tightly regulated and standardized; they have exhaustive experience conducting rapid and high-volume data exchange in a secure environment; they provide multiple but interrelated services for millions of people.

Banking technology has given ordinary people far greater control over their financial lives. “Banks provide established rules for information exchange, and worldwide standardization. That's why your American ATM card and credit card work when you're traveling in Italy,” Mr. Gandolfo said.

PNC Financial Services, which has assets of roughly $90.7 billion and $58.7 billion in total deposits, is the eighth largest treasury management group in the country. It is moving steadily into health care, positioning itself as a health care financial clearinghouse currently serving 1,200 corporate clients, including Medicare and Medicaid programs, Blue Cross/Blue Shield plans, commercial insurance carriers, and pharmacy benefits managers.

As an industry, health care has lagged far behind other industries in terms of information technology investments. Mr. Gandolfo estimated that about $3,000/worker per year is spent on technology advances in the health care sector, while about $7,000/worker per year is spent by other private sector industries, and about $15,000/worker per year is spent in the banking industry.

He said he strongly believes it is time for the health care sector to embrace the technology developed by the banking world, and he doesn't think it will be long before we routinely see card-based health care transactions, real-time information exchange, and real-time financial transaction settlements.

According to Chad Wilkins, who serves as CEO of OptumHealth Bank, the growth of health savings accounts is a major driver of change, and a strong magnet for banks and other financial service firms eyeing the health care sector.

Mr. Wilkins estimated that currently, financial services companies hold about $3.2 billion in HSAs, in 2.2 million accounts that cover health care for around 6.5 million Americans. According to a survey by the industry group America's Health Insurance Plans, 27% of individuals who selected HSAs were previously uninsured. “It is still new, but employees are starting to take advantage of HSAs.”

Bankers like Mr. Wilkins and Mr. Gandolfo want to see those numbers grow. “The biggest issue is education. We need to educate the market, educate consumers, educate policy makers, and educate employers,” Mr. Wilkins said.

OptumHealth Bank is piloting a new HSA debit card that links to a user's personal health record and facilitates transactions for both patient and physician. The “OptumHealth Bank Mastercard” gives real-time access to benefits information, as well as funds. It essentially eliminates claims forms and the attendant processing. Doctors are paid right away and no longer have to wait 60 days for reimbursement.

Both Mr. Wilkins and Mr. Gandolfo said they and others in the health care banking community vigorously oppose proposed federal legislation that would mandate new HSA expenditure substantiation rules. They contend that new regulations would only add costs, create complications, and slow the widespread adoption of HSAs.

One of the primary virtues of banking technology is its capacity to eliminate paper-based transactions, something health care desperately needs to do, Mr. Wilkins said. “Ninety-five percent of current payments to providers and explanations of benefits are still done on paper. That's crazy! It's a staggering amount of paper, and much of this can be computerized.”

He estimated that it costs banks about $1 per paper check or provider remittance advice form, roughly $30 for each voided and reissued paper check, and about $5 per phone call to see what's wrong in a given transaction. Universal electronic claims could save up to $35 billion for health care providers and $1 billion for health care plans.

Mr. Gandolfo said savings on this order are very, very real. A large health care provider group that implemented PNC's E-Healthcare platform realized $2.9 million in annual cost avoidance, and 64% time savings in its accounts receivables. Electronic funds transfers reduced the average time from claims submission to payment by 43%, from 49 days down to 28 days. The average time to make claims adjustments improved by 29%.

The health care congress was sponsored by the Wall Street Journal and CNBC.

WASHINGTON — With health savings accounts serving as a point of entry, banks and other financial institutions are rapidly moving into the health care sector, and bankers believe they have much to offer in streamlining health care transactions and bringing greater efficiency to the medical world.

In this era of e-commerce, it is difficult to remember a time when even the simplest personal financial transactions involved paper and required direct interactions with tellers, a time when cash was not available 24/7, and a world where all of one's personal financial information wasn't simply a few mouse-clicks away. In terms of the digitization of health care financing, we are still in that paper-based era, and many people feel distrust for electronic health care management in the same way they felt distrust for electronic banking when it was first introduced.

But bankers engaged in health care believe we're on the cusp of rapid change. Over the next decade, broader adoption of health savings accounts (HSAs) coupled with interoperable personal health records systems on the patient side, and wider use of electronic medical records on the physician side, will bring health care in line with nearly all other industries in terms of maximal use of electronic information exchange.

James S. Gandolfo, senior vice president of PFPC, a division of PNC Financial Services, and chairman of the American Bankers' Association's HSA Council, told attendees at the fifth annual World Health Care Congress that banks' involvement in health care could be profoundly transformational.

For one, banks can provide interoperable and widely accepted technology platforms, something the health care sector has yet to develop on its own. Banks are also very tightly regulated and standardized; they have exhaustive experience conducting rapid and high-volume data exchange in a secure environment; they provide multiple but interrelated services for millions of people.

As an industry, health care has lagged far behind other industries in terms of information technology investments. Mr. Gandolfo estimated that about $3,000/worker per year is spent on technology advances in the health care sector, while about $7,000/worker per year is spent by other private sector industries, and about $15,000/worker per year is spent in the banking industry.

He said that he strongly believes it is time for the health care sector to embrace the technology developed by the banking world, and he anticipates it won't be long before we routinely see card-based health care transactions, real-time information exchange, and real-time financial transaction settlements.

According to Chad Wilkins, CEO of OptumHealth Bank, the growth of health savings accounts is a major driver of change, and a strong magnet for banks and other financial service firms eyeing the health care sector.

Mr. Wilkins estimated that currently, financial services companies hold about $3.2 billion in HSAs, in 2.2 million accounts that cover health care for around 6.5 million Americans. According to a survey by the industry group America's Health Insurance Plans, 27% of individuals who selected HSAs were previously uninsured.

Bankers like Mr. Wilkins and Mr. Gandolfo want to see those numbers grow. "The biggest issue is education. We need to educate the market, educate consumers, educate policy makers, and educate employers," Mr. Wilkins said.

"Once employers get on board with HSAs, you need to help them roll out and implement them. You need good decision-support tools. If you do it right, you see a dramatic increase in the number of people choosing HSAs, and the amount of money going in. It should all be as simple as dealing with your 401(k)," he asserted.

One of the primary virtues of banking technology is its capacity to eliminate paper-based transactions, something health care desperately needs to do, Mr. Wilkins said. "Ninety-five percent of current payments to providers and explanations of benefits are still done on paper. That's crazy! It's a staggering amount of paper, and much of this can be computerized."

He estimated that it costs banks about $1 per paper check or provider remittance advice form, roughly $30 for each voided and reissued paper check, and about $5 per phone call to see what's wrong in a given transaction. Universal electronic claims could save up to $35 billion for health care providers and $1 billion for health care plans.

Mr. Gandolfo said savings on this order are very real. A large health care provider group that implemented PNC's E-Healthcare platform realized $2.9 million in annual cost avoidance, and 64% time savings in its accounts receivables. Electronic funds transfers cut the average time from claims submission to payment by 43%, from 49 days down to 28 days. The average time to make claims adjustments improved by 29%, and automated matching of payments streamlined the accounts-receivable closeout process.

That sounds promising, right? So why aren't electronic health care transactions the rule instead of the exception? Mr. Gandolfo and Mr. Wilkins both stated that as a nation, we're moving in that direction, but there are some hurdles: Most doctors' offices are not yet electronically enabled; HSA adoption is still fairly low; and most of all, there's a lack of interoperability among all the various health IT systems. "We need a solid, common infrastructure to do this on a wide scale, and we're very, very far from that right now," Mr. Wilkins said.

WASHINGTON — With health savings accounts serving as a point of entry, banks and other financial institutions are rapidly moving into the health care sector, and bankers believe they have much to offer in streamlining health care transactions and bringing greater efficiency to the medical world.

In this era of e-commerce, it is difficult to remember a time when even the simplest personal financial transactions involved paper and required direct interactions with tellers, a time when cash was not available 24/7, and a world where all of one's personal financial information wasn't simply a few mouse-clicks away. In terms of the digitization of health care financing, we are still in that paper-based era, and many people feel distrust for electronic health care management in the same way they felt distrust for electronic banking when it was first introduced.

But bankers engaged in health care believe we're on the cusp of rapid change. Over the next decade, broader adoption of health savings accounts (HSAs) coupled with interoperable personal health records systems on the patient side, and wider use of electronic medical records on the physician side, will bring health care in line with nearly all other industries in terms of maximal use of electronic information exchange.

James S. Gandolfo, senior vice president of PFPC, a division of PNC Financial Services, and chairman of the American Bankers' Association's HSA Council, told attendees at the fifth annual World Health Care Congress that banks' involvement in health care could be profoundly transformational.

For one, banks can provide interoperable and widely accepted technology platforms, something the health care sector has yet to develop on its own. Banks are also very tightly regulated and standardized; they have exhaustive experience conducting rapid and high-volume data exchange in a secure environment; they provide multiple but interrelated services for millions of people.

As an industry, health care has lagged far behind other industries in terms of information technology investments. Mr. Gandolfo estimated that about $3,000/worker per year is spent on technology advances in the health care sector, while about $7,000/worker per year is spent by other private sector industries, and about $15,000/worker per year is spent in the banking industry.

He said that he strongly believes it is time for the health care sector to embrace the technology developed by the banking world, and he anticipates it won't be long before we routinely see card-based health care transactions, real-time information exchange, and real-time financial transaction settlements.

According to Chad Wilkins, CEO of OptumHealth Bank, the growth of health savings accounts is a major driver of change, and a strong magnet for banks and other financial service firms eyeing the health care sector.

Mr. Wilkins estimated that currently, financial services companies hold about $3.2 billion in HSAs, in 2.2 million accounts that cover health care for around 6.5 million Americans. According to a survey by the industry group America's Health Insurance Plans, 27% of individuals who selected HSAs were previously uninsured.

Bankers like Mr. Wilkins and Mr. Gandolfo want to see those numbers grow. "The biggest issue is education. We need to educate the market, educate consumers, educate policy makers, and educate employers," Mr. Wilkins said.

"Once employers get on board with HSAs, you need to help them roll out and implement them. You need good decision-support tools. If you do it right, you see a dramatic increase in the number of people choosing HSAs, and the amount of money going in. It should all be as simple as dealing with your 401(k)," he asserted.

One of the primary virtues of banking technology is its capacity to eliminate paper-based transactions, something health care desperately needs to do, Mr. Wilkins said. "Ninety-five percent of current payments to providers and explanations of benefits are still done on paper. That's crazy! It's a staggering amount of paper, and much of this can be computerized."

He estimated that it costs banks about $1 per paper check or provider remittance advice form, roughly $30 for each voided and reissued paper check, and about $5 per phone call to see what's wrong in a given transaction. Universal electronic claims could save up to $35 billion for health care providers and $1 billion for health care plans.

Mr. Gandolfo said savings on this order are very real. A large health care provider group that implemented PNC's E-Healthcare platform realized $2.9 million in annual cost avoidance, and 64% time savings in its accounts receivables. Electronic funds transfers cut the average time from claims submission to payment by 43%, from 49 days down to 28 days. The average time to make claims adjustments improved by 29%, and automated matching of payments streamlined the accounts-receivable closeout process.

That sounds promising, right? So why aren't electronic health care transactions the rule instead of the exception? Mr. Gandolfo and Mr. Wilkins both stated that as a nation, we're moving in that direction, but there are some hurdles: Most doctors' offices are not yet electronically enabled; HSA adoption is still fairly low; and most of all, there's a lack of interoperability among all the various health IT systems. "We need a solid, common infrastructure to do this on a wide scale, and we're very, very far from that right now," Mr. Wilkins said.

WASHINGTON — With health savings accounts serving as a point of entry, banks and other financial institutions are rapidly moving into the health care sector, and bankers believe they have much to offer in streamlining health care transactions and bringing greater efficiency to the medical world.

In this era of e-commerce, it is difficult to remember a time when even the simplest personal financial transactions involved paper and required direct interactions with tellers, a time when cash was not available 24/7, and a world where all of one's personal financial information wasn't simply a few mouse-clicks away. In terms of the digitization of health care financing, we are still in that paper-based era, and many people feel distrust for electronic health care management in the same way they felt distrust for electronic banking when it was first introduced.

But bankers engaged in health care believe we're on the cusp of rapid change. Over the next decade, broader adoption of health savings accounts (HSAs) coupled with interoperable personal health records systems on the patient side, and wider use of electronic medical records on the physician side, will bring health care in line with nearly all other industries in terms of maximal use of electronic information exchange.

James S. Gandolfo, senior vice president of PFPC, a division of PNC Financial Services, and chairman of the American Bankers' Association's HSA Council, told attendees at the fifth annual World Health Care Congress that banks' involvement in health care could be profoundly transformational.

For one, banks can provide interoperable and widely accepted technology platforms, something the health care sector has yet to develop on its own. Banks are also very tightly regulated and standardized; they have exhaustive experience conducting rapid and high-volume data exchange in a secure environment; they provide multiple but interrelated services for millions of people.

As an industry, health care has lagged far behind other industries in terms of information technology investments. Mr. Gandolfo estimated that about $3,000/worker per year is spent on technology advances in the health care sector, while about $7,000/worker per year is spent by other private sector industries, and about $15,000/worker per year is spent in the banking industry.

He said that he strongly believes it is time for the health care sector to embrace the technology developed by the banking world, and he anticipates it won't be long before we routinely see card-based health care transactions, real-time information exchange, and real-time financial transaction settlements.

According to Chad Wilkins, CEO of OptumHealth Bank, the growth of health savings accounts is a major driver of change, and a strong magnet for banks and other financial service firms eyeing the health care sector.

Mr. Wilkins estimated that currently, financial services companies hold about $3.2 billion in HSAs, in 2.2 million accounts that cover health care for around 6.5 million Americans. According to a survey by the industry group America's Health Insurance Plans, 27% of individuals who selected HSAs were previously uninsured.

Bankers like Mr. Wilkins and Mr. Gandolfo want to see those numbers grow. "The biggest issue is education. We need to educate the market, educate consumers, educate policy makers, and educate employers," Mr. Wilkins said.

"Once employers get on board with HSAs, you need to help them roll out and implement them. You need good decision-support tools. If you do it right, you see a dramatic increase in the number of people choosing HSAs, and the amount of money going in. It should all be as simple as dealing with your 401(k)," he asserted.

One of the primary virtues of banking technology is its capacity to eliminate paper-based transactions, something health care desperately needs to do, Mr. Wilkins said. "Ninety-five percent of current payments to providers and explanations of benefits are still done on paper. That's crazy! It's a staggering amount of paper, and much of this can be computerized."

He estimated that it costs banks about $1 per paper check or provider remittance advice form, roughly $30 for each voided and reissued paper check, and about $5 per phone call to see what's wrong in a given transaction. Universal electronic claims could save up to $35 billion for health care providers and $1 billion for health care plans.

Mr. Gandolfo said savings on this order are very real. A large health care provider group that implemented PNC's E-Healthcare platform realized $2.9 million in annual cost avoidance, and 64% time savings in its accounts receivables. Electronic funds transfers cut the average time from claims submission to payment by 43%, from 49 days down to 28 days. The average time to make claims adjustments improved by 29%, and automated matching of payments streamlined the accounts-receivable closeout process.

That sounds promising, right? So why aren't electronic health care transactions the rule instead of the exception? Mr. Gandolfo and Mr. Wilkins both stated that as a nation, we're moving in that direction, but there are some hurdles: Most doctors' offices are not yet electronically enabled; HSA adoption is still fairly low; and most of all, there's a lack of interoperability among all the various health IT systems. "We need a solid, common infrastructure to do this on a wide scale, and we're very, very far from that right now," Mr. Wilkins said.

WASHINGTON – While health savings accounts and other forms of tax-deferred, consumer-driven health care financing options have captured the fancy of many policy makers, such options have met with a lukewarm welcome among American employers and the people who work for them.

According to data from Forrester Research Inc., an independent technology and market research company, between 8 million and 9 million Americans were enrolled in a health savings account (HSA) or other tax-deferred plan as of June 2007, with 4.5 million new enrollees in 2007 alone. But consumer awareness of these options is still very low. A recent study by the Visa Corporation indicated that only 35% of all Americans have even heard of HSAs, and only 14% expressed any interest in starting one.

That is likely to change as HSAs prove their worth, Elizabeth Bierbower, vice president of product innovation for Humana Inc., said at the fifth annual World Health Care Congress.

She pointed out that 5 years after the introduction of health maintenance organizations (HMOs), combined enrollment in existing plans was only 5.5 million. That changed quickly, once major employers became convinced–for better or for worse–that HMOs would save them money. Ms. Bierbower predicted a similar trajectory for HSAs.

Diamond Management & Technology Consultants, an industry consulting company, projects that by 2010 employees and their employers will have put over $75 billion in assets into HSAs. Last year, employer contributions to HSAs already were up over 50% from the previous year.

Some companies are taking a very proactive role in pushing HSAs, especially for lower and middle-income workers. Ms. Bierbower said Humana has been a strong HSA advocate for its employees. For those making under $50,000 annually, Humana will contribute $6 for every $1 an employee contributes to an HSA. “We try to encourage long-term thinking.”

That, she said, is something grossly lacking in this country. People are simply not saving money, especially for health care needs, and they're in for a rude awakening as they reach retirement age. “People do not understand that Medicare does not cover everything.”

Many baby boomers and Gen Xers will not be able to retire comfortably because they have not saved any money to do so. According to research from the Employee Benefit Research Institute, a majority of near retirees has already spent 95% of their preretirement income. The majority of workers aged 45-55 years have less than $50,000 in savings.

With copayments, pharmacy costs, and out-of-pocket expenses on the rise, even people with relatively generous health plans are finding that they still come up short. A Kaiser Family Foundation survey in 2006 showed that 29% of families reported that one or more members had difficulty paying medical bills.

Doctors, said Ms. Bierbower, often bear the brunt of Americans' lack of planning for health care expenses. In a Humana survey of consumer attitudes, researchers found that many Americans are quite willing to leave their physicians holding the bag, in the form of unpaid bills. “They tell us that health care providers are the last ones they will pay. They say things like, 'We know the doctor will take $10 a month.' They perceive that doctors are rich and don't really need the money.”

Advocates of HSAs and other forms of consumer-driven coverage say that one of the primary virtues of these plans is that they push end-users of services to become more cost conscious, and presumably more judicious, in their health care choices. In practice, this seems to be borne out.

A McKinsey survey showed that people enrolled in HSAs or other consumer-driven plans were 50% more likely to ask about overall costs of health care services, and 100% more likely to ask about drug costs, compared with people in traditional health care plans.

Similarly, a Blue Cross Blue Shield Association study showed that 33% of HSA enrollees asked about prescription costs, compared with only 18% of enrollees in traditional plans. Twenty percent of those in HSAs asked about the costs of physician visits, versus 14% of those who have traditional insurance.

WASHINGTON – While health savings accounts and other forms of tax-deferred, consumer-driven health care financing options have captured the fancy of many policy makers, such options have met with a lukewarm welcome among American employers and the people who work for them.

According to data from Forrester Research Inc., an independent technology and market research company, between 8 million and 9 million Americans were enrolled in a health savings account (HSA) or other tax-deferred plan as of June 2007, with 4.5 million new enrollees in 2007 alone. But consumer awareness of these options is still very low. A recent study by the Visa Corporation indicated that only 35% of all Americans have even heard of HSAs, and only 14% expressed any interest in starting one.

That is likely to change as HSAs prove their worth, Elizabeth Bierbower, vice president of product innovation for Humana Inc., said at the fifth annual World Health Care Congress.

She pointed out that 5 years after the introduction of health maintenance organizations (HMOs), combined enrollment in existing plans was only 5.5 million. That changed quickly, once major employers became convinced–for better or for worse–that HMOs would save them money. Ms. Bierbower predicted a similar trajectory for HSAs.

Diamond Management & Technology Consultants, an industry consulting company, projects that by 2010 employees and their employers will have put over $75 billion in assets into HSAs. Last year, employer contributions to HSAs already were up over 50% from the previous year.

Some companies are taking a very proactive role in pushing HSAs, especially for lower and middle-income workers. Ms. Bierbower said Humana has been a strong HSA advocate for its employees. For those making under $50,000 annually, Humana will contribute $6 for every $1 an employee contributes to an HSA. “We try to encourage long-term thinking.”

That, she said, is something grossly lacking in this country. People are simply not saving money, especially for health care needs, and they're in for a rude awakening as they reach retirement age. “People do not understand that Medicare does not cover everything.”

Many baby boomers and Gen Xers will not be able to retire comfortably because they have not saved any money to do so. According to research from the Employee Benefit Research Institute, a majority of near retirees has already spent 95% of their preretirement income. The majority of workers aged 45-55 years have less than $50,000 in savings.

With copayments, pharmacy costs, and out-of-pocket expenses on the rise, even people with relatively generous health plans are finding that they still come up short. A Kaiser Family Foundation survey in 2006 showed that 29% of families reported that one or more members had difficulty paying medical bills.

Doctors, said Ms. Bierbower, often bear the brunt of Americans' lack of planning for health care expenses. In a Humana survey of consumer attitudes, researchers found that many Americans are quite willing to leave their physicians holding the bag, in the form of unpaid bills. “They tell us that health care providers are the last ones they will pay. They say things like, 'We know the doctor will take $10 a month.' They perceive that doctors are rich and don't really need the money.”

Advocates of HSAs and other forms of consumer-driven coverage say that one of the primary virtues of these plans is that they push end-users of services to become more cost conscious, and presumably more judicious, in their health care choices. In practice, this seems to be borne out.

A McKinsey survey showed that people enrolled in HSAs or other consumer-driven plans were 50% more likely to ask about overall costs of health care services, and 100% more likely to ask about drug costs, compared with people in traditional health care plans.

Similarly, a Blue Cross Blue Shield Association study showed that 33% of HSA enrollees asked about prescription costs, compared with only 18% of enrollees in traditional plans. Twenty percent of those in HSAs asked about the costs of physician visits, versus 14% of those who have traditional insurance.

WASHINGTON – While health savings accounts and other forms of tax-deferred, consumer-driven health care financing options have captured the fancy of many policy makers, such options have met with a lukewarm welcome among American employers and the people who work for them.

According to data from Forrester Research Inc., an independent technology and market research company, between 8 million and 9 million Americans were enrolled in a health savings account (HSA) or other tax-deferred plan as of June 2007, with 4.5 million new enrollees in 2007 alone. But consumer awareness of these options is still very low. A recent study by the Visa Corporation indicated that only 35% of all Americans have even heard of HSAs, and only 14% expressed any interest in starting one.

That is likely to change as HSAs prove their worth, Elizabeth Bierbower, vice president of product innovation for Humana Inc., said at the fifth annual World Health Care Congress.

She pointed out that 5 years after the introduction of health maintenance organizations (HMOs), combined enrollment in existing plans was only 5.5 million. That changed quickly, once major employers became convinced–for better or for worse–that HMOs would save them money. Ms. Bierbower predicted a similar trajectory for HSAs.

Diamond Management & Technology Consultants, an industry consulting company, projects that by 2010 employees and their employers will have put over $75 billion in assets into HSAs. Last year, employer contributions to HSAs already were up over 50% from the previous year.

Some companies are taking a very proactive role in pushing HSAs, especially for lower and middle-income workers. Ms. Bierbower said Humana has been a strong HSA advocate for its employees. For those making under $50,000 annually, Humana will contribute $6 for every $1 an employee contributes to an HSA. “We try to encourage long-term thinking.”

That, she said, is something grossly lacking in this country. People are simply not saving money, especially for health care needs, and they're in for a rude awakening as they reach retirement age. “People do not understand that Medicare does not cover everything.”

Many baby boomers and Gen Xers will not be able to retire comfortably because they have not saved any money to do so. According to research from the Employee Benefit Research Institute, a majority of near retirees has already spent 95% of their preretirement income. The majority of workers aged 45-55 years have less than $50,000 in savings.

With copayments, pharmacy costs, and out-of-pocket expenses on the rise, even people with relatively generous health plans are finding that they still come up short. A Kaiser Family Foundation survey in 2006 showed that 29% of families reported that one or more members had difficulty paying medical bills.

Doctors, said Ms. Bierbower, often bear the brunt of Americans' lack of planning for health care expenses. In a Humana survey of consumer attitudes, researchers found that many Americans are quite willing to leave their physicians holding the bag, in the form of unpaid bills. “They tell us that health care providers are the last ones they will pay. They say things like, 'We know the doctor will take $10 a month.' They perceive that doctors are rich and don't really need the money.”

Advocates of HSAs and other forms of consumer-driven coverage say that one of the primary virtues of these plans is that they push end-users of services to become more cost conscious, and presumably more judicious, in their health care choices. In practice, this seems to be borne out.

A McKinsey survey showed that people enrolled in HSAs or other consumer-driven plans were 50% more likely to ask about overall costs of health care services, and 100% more likely to ask about drug costs, compared with people in traditional health care plans.

Similarly, a Blue Cross Blue Shield Association study showed that 33% of HSA enrollees asked about prescription costs, compared with only 18% of enrollees in traditional plans. Twenty percent of those in HSAs asked about the costs of physician visits, versus 14% of those who have traditional insurance.

WASHINGTON — Health savings accounts and other forms of tax-deferred, consumer-driven health care financing options have captured the fancy of many policy makers, but such options have met with a lukewarm welcome among American employers and the people who work for them.

According to data from Forrester Research Inc., an independent technology and market research company, between 8 million and 9 million Americans were enrolled in a health savings account (HSA) or other tax-deferred plan as of June 2007, with 4.5 million new enrollees in 2007 alone.

But consumer awareness of these options is still very low. A recent study by the Visa Corporation indicated that only 35% of all Americans have even heard of HSAs, and only 14% expressed any interest in starting one.

That is likely to change as HSAs prove their worth, Elizabeth Bierbower, vice president of product innovation for Humana Inc., said at the fifth annual World Health Care Congress. She pointed out that 5 years after the introduction of health maintenance organizations (HMOs), combined enrollment in all existing plans was only 5.5 million. That changed quickly, once major employers became convinced—for better or for worse—that HMOs would save them money. Ms. Bierbower predicted a similar trajectory for HSAs.

Diamond Management & Technology Consultants, an industry consulting company, projects that by 2010 employees and their employers will have put over $75 billion in assets into HSAs. Last year, employer contributions to HSAs already were up over 50% from the previous year.

Some companies are taking a very proactive role in pushing HSAs, especially for lower and middle-income workers. Ms. Bierbower said Humana has been a strong HSA advocate for its employees. For those making under $50,000 annually, Humana will contribute $6 for every $1 an employee contributes to an HSA. “[The ratio is] lower if your salary is higher, but there's still a big incentive to do this. We try to encourage long-term thinking.”

That, she said, is something grossly lacking in this country. People are simply not saving money, especially for health care needs, and they're in for a rude awakening as they reach retirement age. “Most people do not budget for health care, and they don't understand their cost-sharing levels. People do not understand that Medicare does not cover everything.”

Many baby boomers and Gen Xers will not be able to retire comfortably because they have not saved any money to do so. According to research from the Employee Benefit Research Institute, a majority of near retirees has already spent 95% of their preretirement income. The majority of workers aged 45–55 years have less than $50,000 in savings.

With copayments, pharmacy costs, and out-of-pocket expenses on the rise, even people with relatively generous health plans are finding that they still come up short. A Kaiser Family Foundation survey in 2006 showed that 29% of families reported that one or more members had difficulty paying medical bills.

Doctors often bear the brunt of Americans' lack of planning for health care expenses, Ms. Bierbower said. In a Humana survey of consumer attitudes, researchers found that many Americans are quite willing to leave their physicians holding the bag, in the form of unpaid bills. “They tell us that health care providers are the last ones they will pay. They say things like, 'We know the doctor will take $10 a month.' They perceive that doctors are rich and don't really need the money.”

She added that people are much more inclined to ignore a doctor's bills than a hospital's, for the simple reason that hospitals tend to pursue their payments more aggressively and they can hurt peoples' credit ratings, something they perceive that individual doctors don't do.

“We have to work with our employees and consumers to change this attitude. Doctors need to get paid,” Ms. Bierbower stressed.

She said Humana, and many other insurance carriers like Aetna, WellChoice/WellPoint, UnitedHealth Group, Kaiser Permanente, and Great-West have begun offering health care lines of credit to help people cover their out of pocket expenses, copayments, or gaps in existing coverage. The line of credit strategy is also a good option in conjunction with HSAs, to help cover sudden large expenses or as a stopgap in cases in which patients have exhausted their HSA savings.

Humana's line-of-credit card is activated at the time of need, and can only be used to pay credentialed health care providers. The charges are interest free for 6 months. “We're not trying to encourage more credit card debt,” Ms. Bierbower said.

Advocates of HSAs and other forms of consumer-driven coverage say that one of the primary virtues of these plans is that they push the end-user of health care services to become more cost conscious, and presumably more judicious, in their health care choices. In practice, this seems to be borne out.

A McKinsey survey showed that people enrolled in HSAs or other consumer-driven plans were 50% more likely to ask about overall costs of health care services, and 100% more likely to ask about drug costs, compared with people in traditional health care plans.

Similarly, a Blue Cross Blue Shield Association study showed that 33% of HSA enrollees asked about prescription costs, compared with only 18% of enrollees in traditional plans. Of those in HSAs, 20% asked about the costs of physician visits, versus 14% of those who have traditional insurance.

WASHINGTON — Health savings accounts and other forms of tax-deferred, consumer-driven health care financing options have captured the fancy of many policy makers, but such options have met with a lukewarm welcome among American employers and the people who work for them.

According to data from Forrester Research Inc., an independent technology and market research company, between 8 million and 9 million Americans were enrolled in a health savings account (HSA) or other tax-deferred plan as of June 2007, with 4.5 million new enrollees in 2007 alone.

But consumer awareness of these options is still very low. A recent study by the Visa Corporation indicated that only 35% of all Americans have even heard of HSAs, and only 14% expressed any interest in starting one.

That is likely to change as HSAs prove their worth, Elizabeth Bierbower, vice president of product innovation for Humana Inc., said at the fifth annual World Health Care Congress. She pointed out that 5 years after the introduction of health maintenance organizations (HMOs), combined enrollment in all existing plans was only 5.5 million. That changed quickly, once major employers became convinced—for better or for worse—that HMOs would save them money. Ms. Bierbower predicted a similar trajectory for HSAs.

Diamond Management & Technology Consultants, an industry consulting company, projects that by 2010 employees and their employers will have put over $75 billion in assets into HSAs. Last year, employer contributions to HSAs already were up over 50% from the previous year.

Some companies are taking a very proactive role in pushing HSAs, especially for lower and middle-income workers. Ms. Bierbower said Humana has been a strong HSA advocate for its employees. For those making under $50,000 annually, Humana will contribute $6 for every $1 an employee contributes to an HSA. “[The ratio is] lower if your salary is higher, but there's still a big incentive to do this. We try to encourage long-term thinking.”

That, she said, is something grossly lacking in this country. People are simply not saving money, especially for health care needs, and they're in for a rude awakening as they reach retirement age. “Most people do not budget for health care, and they don't understand their cost-sharing levels. People do not understand that Medicare does not cover everything.”

Many baby boomers and Gen Xers will not be able to retire comfortably because they have not saved any money to do so. According to research from the Employee Benefit Research Institute, a majority of near retirees has already spent 95% of their preretirement income. The majority of workers aged 45–55 years have less than $50,000 in savings.

With copayments, pharmacy costs, and out-of-pocket expenses on the rise, even people with relatively generous health plans are finding that they still come up short. A Kaiser Family Foundation survey in 2006 showed that 29% of families reported that one or more members had difficulty paying medical bills.

Doctors often bear the brunt of Americans' lack of planning for health care expenses, Ms. Bierbower said. In a Humana survey of consumer attitudes, researchers found that many Americans are quite willing to leave their physicians holding the bag, in the form of unpaid bills. “They tell us that health care providers are the last ones they will pay. They say things like, 'We know the doctor will take $10 a month.' They perceive that doctors are rich and don't really need the money.”

She added that people are much more inclined to ignore a doctor's bills than a hospital's, for the simple reason that hospitals tend to pursue their payments more aggressively and they can hurt peoples' credit ratings, something they perceive that individual doctors don't do.

“We have to work with our employees and consumers to change this attitude. Doctors need to get paid,” Ms. Bierbower stressed.

She said Humana, and many other insurance carriers like Aetna, WellChoice/WellPoint, UnitedHealth Group, Kaiser Permanente, and Great-West have begun offering health care lines of credit to help people cover their out of pocket expenses, copayments, or gaps in existing coverage. The line of credit strategy is also a good option in conjunction with HSAs, to help cover sudden large expenses or as a stopgap in cases in which patients have exhausted their HSA savings.

Humana's line-of-credit card is activated at the time of need, and can only be used to pay credentialed health care providers. The charges are interest free for 6 months. “We're not trying to encourage more credit card debt,” Ms. Bierbower said.

Advocates of HSAs and other forms of consumer-driven coverage say that one of the primary virtues of these plans is that they push the end-user of health care services to become more cost conscious, and presumably more judicious, in their health care choices. In practice, this seems to be borne out.

A McKinsey survey showed that people enrolled in HSAs or other consumer-driven plans were 50% more likely to ask about overall costs of health care services, and 100% more likely to ask about drug costs, compared with people in traditional health care plans.

Similarly, a Blue Cross Blue Shield Association study showed that 33% of HSA enrollees asked about prescription costs, compared with only 18% of enrollees in traditional plans. Of those in HSAs, 20% asked about the costs of physician visits, versus 14% of those who have traditional insurance.

WASHINGTON — Health savings accounts and other forms of tax-deferred, consumer-driven health care financing options have captured the fancy of many policy makers, but such options have met with a lukewarm welcome among American employers and the people who work for them.

According to data from Forrester Research Inc., an independent technology and market research company, between 8 million and 9 million Americans were enrolled in a health savings account (HSA) or other tax-deferred plan as of June 2007, with 4.5 million new enrollees in 2007 alone.

But consumer awareness of these options is still very low. A recent study by the Visa Corporation indicated that only 35% of all Americans have even heard of HSAs, and only 14% expressed any interest in starting one.

That is likely to change as HSAs prove their worth, Elizabeth Bierbower, vice president of product innovation for Humana Inc., said at the fifth annual World Health Care Congress. She pointed out that 5 years after the introduction of health maintenance organizations (HMOs), combined enrollment in all existing plans was only 5.5 million. That changed quickly, once major employers became convinced—for better or for worse—that HMOs would save them money. Ms. Bierbower predicted a similar trajectory for HSAs.

Diamond Management & Technology Consultants, an industry consulting company, projects that by 2010 employees and their employers will have put over $75 billion in assets into HSAs. Last year, employer contributions to HSAs already were up over 50% from the previous year.

Some companies are taking a very proactive role in pushing HSAs, especially for lower and middle-income workers. Ms. Bierbower said Humana has been a strong HSA advocate for its employees. For those making under $50,000 annually, Humana will contribute $6 for every $1 an employee contributes to an HSA. “[The ratio is] lower if your salary is higher, but there's still a big incentive to do this. We try to encourage long-term thinking.”

That, she said, is something grossly lacking in this country. People are simply not saving money, especially for health care needs, and they're in for a rude awakening as they reach retirement age. “Most people do not budget for health care, and they don't understand their cost-sharing levels. People do not understand that Medicare does not cover everything.”

Many baby boomers and Gen Xers will not be able to retire comfortably because they have not saved any money to do so. According to research from the Employee Benefit Research Institute, a majority of near retirees has already spent 95% of their preretirement income. The majority of workers aged 45–55 years have less than $50,000 in savings.

With copayments, pharmacy costs, and out-of-pocket expenses on the rise, even people with relatively generous health plans are finding that they still come up short. A Kaiser Family Foundation survey in 2006 showed that 29% of families reported that one or more members had difficulty paying medical bills.

Doctors often bear the brunt of Americans' lack of planning for health care expenses, Ms. Bierbower said. In a Humana survey of consumer attitudes, researchers found that many Americans are quite willing to leave their physicians holding the bag, in the form of unpaid bills. “They tell us that health care providers are the last ones they will pay. They say things like, 'We know the doctor will take $10 a month.' They perceive that doctors are rich and don't really need the money.”

She added that people are much more inclined to ignore a doctor's bills than a hospital's, for the simple reason that hospitals tend to pursue their payments more aggressively and they can hurt peoples' credit ratings, something they perceive that individual doctors don't do.

“We have to work with our employees and consumers to change this attitude. Doctors need to get paid,” Ms. Bierbower stressed.

She said Humana, and many other insurance carriers like Aetna, WellChoice/WellPoint, UnitedHealth Group, Kaiser Permanente, and Great-West have begun offering health care lines of credit to help people cover their out of pocket expenses, copayments, or gaps in existing coverage. The line of credit strategy is also a good option in conjunction with HSAs, to help cover sudden large expenses or as a stopgap in cases in which patients have exhausted their HSA savings.

Humana's line-of-credit card is activated at the time of need, and can only be used to pay credentialed health care providers. The charges are interest free for 6 months. “We're not trying to encourage more credit card debt,” Ms. Bierbower said.

Advocates of HSAs and other forms of consumer-driven coverage say that one of the primary virtues of these plans is that they push the end-user of health care services to become more cost conscious, and presumably more judicious, in their health care choices. In practice, this seems to be borne out.

A McKinsey survey showed that people enrolled in HSAs or other consumer-driven plans were 50% more likely to ask about overall costs of health care services, and 100% more likely to ask about drug costs, compared with people in traditional health care plans.

Similarly, a Blue Cross Blue Shield Association study showed that 33% of HSA enrollees asked about prescription costs, compared with only 18% of enrollees in traditional plans. Of those in HSAs, 20% asked about the costs of physician visits, versus 14% of those who have traditional insurance.

WASHINGTON — With health savings accounts serving as a point of entry, banks and other financial institutions are rapidly moving into the health care sector, and bankers believe they have much to offer in streamlining health care transactions and bringing greater efficiency to the medical world.

In this era of e-commerce, it is difficult to remember a time when even the simplest personal financial transactions involved paper and required direct interactions with tellers, a time when cash was not available 24/7, and a world where all of one's personal financial information wasn't simply a few mouse-clicks away. It is hard to imagine that at the advent of electronic banking, it was a scary prospect for many people.

In terms of the digitization of health care financing, we are still in that paper-based era, and many people feel distrust for electronic health care management in the same way they felt distrust for electronic banking when it was first introduced.

But bankers engaged in health care believe we're on the cusp of rapid change. Over the next decade, broader adoption of health savings accounts (HSAs) coupled with interoperable personal health records systems on the patient side, and wider use of electronic medical records on the physician side, will bring health care in line with nearly all other industries in terms of maximal use of electronic information exchange.

James S. Gandolfo, senior vice president of PFPC, a division of PNC Financial Services, and chairman of the American Bankers' Association's HSA Council, told attendees at the fifth annual World Health Care Congress that banks' involvement in health care could be profoundly transformational.

For one, banks can provide interoperable and widely accepted technology platforms, something the health care sector has yet to develop on its own. Banks are also very tightly regulated and standardized; they have exhaustive experience conducting rapid and high-volume data exchange in a secure environment; they provide multiple but interrelated services for millions of people. Banking technology has given ordinary people far greater control over their financial lives.

“Banks provide established rules for information exchange, and worldwide standardization. That's why your American ATM card and credit card work when you're traveling in Italy,” Mr. Gandolfo said.

PNC Financial Services, which has assets of roughly $90.7 billion and $58.7 billion in total deposits, is the eighth largest treasury management group in the country. It is moving steadily into health care, positioning itself as a health care financial clearinghouse serving 1,200 corporate clients, including Medicare and Medicaid programs, Blue Cross/Blue Shield plans, commercial insurance carriers, and pharmacy benefits managers.

As an industry, health care has lagged far behind other industries in terms of information technology investments. Mr. Gandolfo estimated that about $3,000/worker per year is spent on technology advances in the health care sector, while about $7,000/worker per year is spent by other private sector industries, and about $15,000/worker per year is spent in the banking industry.

He said that he strongly believes it is time for the health care sector to embrace the technology developed by the banking world, and he anticipates it won't be long before we routinely see card-based health care transactions, real-time information exchange, and real-time financial transaction settlements.

According to Chad Wilkins, CEO of OptumHealth Bank, the growth of health savings accounts is a major driver of change, and a strong magnet for banks and other financial service firms eyeing the health care sector.

Mr. Wilkins estimated that currently, financial services companies hold about $3.2 billion in HSAs, in 2.2 million accounts that cover health care for around 6.5 million Americans. According to a survey by the industry group America's Health Insurance Plans, 27% of individuals who selected HSAs were previously uninsured. “It is still new, but employees are starting to take advantage of HSAs.”

Bankers like Mr. Wilkins and Mr. Gandolfo want to see those numbers grow. “The biggest issue is education. We need to educate the market, educate consumers, educate policy makers, and educate employers,” Mr. Wilkins said.

“Once employers get on board with HSAs, you need to help them roll out and implement them. You need good decision-support tools. If you do it right, you see a dramatic increase in the number of people choosing HSAs, and the amount of money going in. It should all be as simple as dealing with your 401(k).”

OptumHealth Bank is piloting a new HSA debit card that links to a user's personal health record and facilitates transactions for both patient and physician. The “OptumHealth Bank Mastercard” gives real-time access to benefits information, as well as funds. It essentially eliminates claims forms and the attendant processing. Doctors are paid right away and no longer have to wait 60 days for reimbursement.

Both Mr. Wilkins and Mr. Gandolfo said they and others in the health care banking community vigorously oppose proposed federal legislation that would mandate new HSA expenditure substantiation rules. They contend that new regulations would only add costs, create complications, and slow the widespread adoption of HSAs.

One of the primary virtues of banking technology is its capacity to eliminate paper-based transactions, something health care desperately needs to do, Mr. Wilkins said. “Ninety-five percent of current payments to providers and explanations of benefits are still done on paper. That's crazy! It's a staggering amount of paper, and much of this can be computerized.”

He estimated that it costs banks about $1 per paper check or provider remittance advice form, roughly $30 for each voided and reissued paper check, and about $5 per phone call to see what's wrong in a given transaction. Universal electronic claims could save up to $35 billion for health care providers and $1 billion for health care plans.

Mr. Gandolfo said savings on this order are very real. A large health care provider group that implemented PNC's E-Healthcare platform realized $2.9 million in annual cost avoidance, and 64% time savings in its accounts receivables. Electronic funds transfers cut the average time from claims submission to payment by 43%, from 49 days down to 28 days. The average time to make claims adjustments improved by 29%, and automated matching of payments streamlined the accounts-receivable closeout process.

That sounds promising, right? So why aren't electronic health care transactions the rule instead of the exception? Mr. Gandolfo and Mr. Wilkins both stated that as a nation, we're moving in that direction, but there are some hurdles: Most doctors' offices are not yet electronically enabled; HSA adoption is still fairly low; and most of all, there's a lack of interoperability among all the various health IT systems.

“We need a solid, common infrastructure to do this on a wide scale, and we're very, very far from that right now,” Mr. Wilkins said.

WASHINGTON — With health savings accounts serving as a point of entry, banks and other financial institutions are rapidly moving into the health care sector, and bankers believe they have much to offer in streamlining health care transactions and bringing greater efficiency to the medical world.

In this era of e-commerce, it is difficult to remember a time when even the simplest personal financial transactions involved paper and required direct interactions with tellers, a time when cash was not available 24/7, and a world where all of one's personal financial information wasn't simply a few mouse-clicks away. It is hard to imagine that at the advent of electronic banking, it was a scary prospect for many people.

In terms of the digitization of health care financing, we are still in that paper-based era, and many people feel distrust for electronic health care management in the same way they felt distrust for electronic banking when it was first introduced.

But bankers engaged in health care believe we're on the cusp of rapid change. Over the next decade, broader adoption of health savings accounts (HSAs) coupled with interoperable personal health records systems on the patient side, and wider use of electronic medical records on the physician side, will bring health care in line with nearly all other industries in terms of maximal use of electronic information exchange.

James S. Gandolfo, senior vice president of PFPC, a division of PNC Financial Services, and chairman of the American Bankers' Association's HSA Council, told attendees at the fifth annual World Health Care Congress that banks' involvement in health care could be profoundly transformational.

For one, banks can provide interoperable and widely accepted technology platforms, something the health care sector has yet to develop on its own. Banks are also very tightly regulated and standardized; they have exhaustive experience conducting rapid and high-volume data exchange in a secure environment; they provide multiple but interrelated services for millions of people. Banking technology has given ordinary people far greater control over their financial lives.

“Banks provide established rules for information exchange, and worldwide standardization. That's why your American ATM card and credit card work when you're traveling in Italy,” Mr. Gandolfo said.

PNC Financial Services, which has assets of roughly $90.7 billion and $58.7 billion in total deposits, is the eighth largest treasury management group in the country. It is moving steadily into health care, positioning itself as a health care financial clearinghouse serving 1,200 corporate clients, including Medicare and Medicaid programs, Blue Cross/Blue Shield plans, commercial insurance carriers, and pharmacy benefits managers.

As an industry, health care has lagged far behind other industries in terms of information technology investments. Mr. Gandolfo estimated that about $3,000/worker per year is spent on technology advances in the health care sector, while about $7,000/worker per year is spent by other private sector industries, and about $15,000/worker per year is spent in the banking industry.

He said that he strongly believes it is time for the health care sector to embrace the technology developed by the banking world, and he anticipates it won't be long before we routinely see card-based health care transactions, real-time information exchange, and real-time financial transaction settlements.

According to Chad Wilkins, CEO of OptumHealth Bank, the growth of health savings accounts is a major driver of change, and a strong magnet for banks and other financial service firms eyeing the health care sector.

Mr. Wilkins estimated that currently, financial services companies hold about $3.2 billion in HSAs, in 2.2 million accounts that cover health care for around 6.5 million Americans. According to a survey by the industry group America's Health Insurance Plans, 27% of individuals who selected HSAs were previously uninsured. “It is still new, but employees are starting to take advantage of HSAs.”

Bankers like Mr. Wilkins and Mr. Gandolfo want to see those numbers grow. “The biggest issue is education. We need to educate the market, educate consumers, educate policy makers, and educate employers,” Mr. Wilkins said.

“Once employers get on board with HSAs, you need to help them roll out and implement them. You need good decision-support tools. If you do it right, you see a dramatic increase in the number of people choosing HSAs, and the amount of money going in. It should all be as simple as dealing with your 401(k).”

OptumHealth Bank is piloting a new HSA debit card that links to a user's personal health record and facilitates transactions for both patient and physician. The “OptumHealth Bank Mastercard” gives real-time access to benefits information, as well as funds. It essentially eliminates claims forms and the attendant processing. Doctors are paid right away and no longer have to wait 60 days for reimbursement.

Both Mr. Wilkins and Mr. Gandolfo said they and others in the health care banking community vigorously oppose proposed federal legislation that would mandate new HSA expenditure substantiation rules. They contend that new regulations would only add costs, create complications, and slow the widespread adoption of HSAs.

One of the primary virtues of banking technology is its capacity to eliminate paper-based transactions, something health care desperately needs to do, Mr. Wilkins said. “Ninety-five percent of current payments to providers and explanations of benefits are still done on paper. That's crazy! It's a staggering amount of paper, and much of this can be computerized.”

He estimated that it costs banks about $1 per paper check or provider remittance advice form, roughly $30 for each voided and reissued paper check, and about $5 per phone call to see what's wrong in a given transaction. Universal electronic claims could save up to $35 billion for health care providers and $1 billion for health care plans.

Mr. Gandolfo said savings on this order are very real. A large health care provider group that implemented PNC's E-Healthcare platform realized $2.9 million in annual cost avoidance, and 64% time savings in its accounts receivables. Electronic funds transfers cut the average time from claims submission to payment by 43%, from 49 days down to 28 days. The average time to make claims adjustments improved by 29%, and automated matching of payments streamlined the accounts-receivable closeout process.

That sounds promising, right? So why aren't electronic health care transactions the rule instead of the exception? Mr. Gandolfo and Mr. Wilkins both stated that as a nation, we're moving in that direction, but there are some hurdles: Most doctors' offices are not yet electronically enabled; HSA adoption is still fairly low; and most of all, there's a lack of interoperability among all the various health IT systems.

“We need a solid, common infrastructure to do this on a wide scale, and we're very, very far from that right now,” Mr. Wilkins said.

WASHINGTON — With health savings accounts serving as a point of entry, banks and other financial institutions are rapidly moving into the health care sector, and bankers believe they have much to offer in streamlining health care transactions and bringing greater efficiency to the medical world.

In this era of e-commerce, it is difficult to remember a time when even the simplest personal financial transactions involved paper and required direct interactions with tellers, a time when cash was not available 24/7, and a world where all of one's personal financial information wasn't simply a few mouse-clicks away. It is hard to imagine that at the advent of electronic banking, it was a scary prospect for many people.

In terms of the digitization of health care financing, we are still in that paper-based era, and many people feel distrust for electronic health care management in the same way they felt distrust for electronic banking when it was first introduced.

But bankers engaged in health care believe we're on the cusp of rapid change. Over the next decade, broader adoption of health savings accounts (HSAs) coupled with interoperable personal health records systems on the patient side, and wider use of electronic medical records on the physician side, will bring health care in line with nearly all other industries in terms of maximal use of electronic information exchange.

James S. Gandolfo, senior vice president of PFPC, a division of PNC Financial Services, and chairman of the American Bankers' Association's HSA Council, told attendees at the fifth annual World Health Care Congress that banks' involvement in health care could be profoundly transformational.

For one, banks can provide interoperable and widely accepted technology platforms, something the health care sector has yet to develop on its own. Banks are also very tightly regulated and standardized; they have exhaustive experience conducting rapid and high-volume data exchange in a secure environment; they provide multiple but interrelated services for millions of people. Banking technology has given ordinary people far greater control over their financial lives.

“Banks provide established rules for information exchange, and worldwide standardization. That's why your American ATM card and credit card work when you're traveling in Italy,” Mr. Gandolfo said.

PNC Financial Services, which has assets of roughly $90.7 billion and $58.7 billion in total deposits, is the eighth largest treasury management group in the country. It is moving steadily into health care, positioning itself as a health care financial clearinghouse serving 1,200 corporate clients, including Medicare and Medicaid programs, Blue Cross/Blue Shield plans, commercial insurance carriers, and pharmacy benefits managers.

As an industry, health care has lagged far behind other industries in terms of information technology investments. Mr. Gandolfo estimated that about $3,000/worker per year is spent on technology advances in the health care sector, while about $7,000/worker per year is spent by other private sector industries, and about $15,000/worker per year is spent in the banking industry.

He said that he strongly believes it is time for the health care sector to embrace the technology developed by the banking world, and he anticipates it won't be long before we routinely see card-based health care transactions, real-time information exchange, and real-time financial transaction settlements.

According to Chad Wilkins, CEO of OptumHealth Bank, the growth of health savings accounts is a major driver of change, and a strong magnet for banks and other financial service firms eyeing the health care sector.

Mr. Wilkins estimated that currently, financial services companies hold about $3.2 billion in HSAs, in 2.2 million accounts that cover health care for around 6.5 million Americans. According to a survey by the industry group America's Health Insurance Plans, 27% of individuals who selected HSAs were previously uninsured. “It is still new, but employees are starting to take advantage of HSAs.”

Bankers like Mr. Wilkins and Mr. Gandolfo want to see those numbers grow. “The biggest issue is education. We need to educate the market, educate consumers, educate policy makers, and educate employers,” Mr. Wilkins said.

“Once employers get on board with HSAs, you need to help them roll out and implement them. You need good decision-support tools. If you do it right, you see a dramatic increase in the number of people choosing HSAs, and the amount of money going in. It should all be as simple as dealing with your 401(k).”

OptumHealth Bank is piloting a new HSA debit card that links to a user's personal health record and facilitates transactions for both patient and physician. The “OptumHealth Bank Mastercard” gives real-time access to benefits information, as well as funds. It essentially eliminates claims forms and the attendant processing. Doctors are paid right away and no longer have to wait 60 days for reimbursement.

Both Mr. Wilkins and Mr. Gandolfo said they and others in the health care banking community vigorously oppose proposed federal legislation that would mandate new HSA expenditure substantiation rules. They contend that new regulations would only add costs, create complications, and slow the widespread adoption of HSAs.

One of the primary virtues of banking technology is its capacity to eliminate paper-based transactions, something health care desperately needs to do, Mr. Wilkins said. “Ninety-five percent of current payments to providers and explanations of benefits are still done on paper. That's crazy! It's a staggering amount of paper, and much of this can be computerized.”

He estimated that it costs banks about $1 per paper check or provider remittance advice form, roughly $30 for each voided and reissued paper check, and about $5 per phone call to see what's wrong in a given transaction. Universal electronic claims could save up to $35 billion for health care providers and $1 billion for health care plans.

Mr. Gandolfo said savings on this order are very real. A large health care provider group that implemented PNC's E-Healthcare platform realized $2.9 million in annual cost avoidance, and 64% time savings in its accounts receivables. Electronic funds transfers cut the average time from claims submission to payment by 43%, from 49 days down to 28 days. The average time to make claims adjustments improved by 29%, and automated matching of payments streamlined the accounts-receivable closeout process.

That sounds promising, right? So why aren't electronic health care transactions the rule instead of the exception? Mr. Gandolfo and Mr. Wilkins both stated that as a nation, we're moving in that direction, but there are some hurdles: Most doctors' offices are not yet electronically enabled; HSA adoption is still fairly low; and most of all, there's a lack of interoperability among all the various health IT systems.

“We need a solid, common infrastructure to do this on a wide scale, and we're very, very far from that right now,” Mr. Wilkins said.

WASHINGTON — While health savings accounts and other forms of tax-deferred, consumer-driven health care financing options have captured the fancy of many policy makers, such options have met with a lukewarm welcome among American employers and the people who work for them.

According to data from Forrester Research Inc., an independent technology and market research company, between 8 million and 9 million Americans were enrolled in a health savings account (HSA) or other tax-deferred plan as of June 2007, with 4.5 million new enrollees in 2007 alone. But consumer awareness of these options is still very low. A recent study by the Visa Corporation indicated that only 35% of all Americans have even heard of HSAs, and only 14% expressed any interest in starting one.

That is likely to change as HSAs prove their worth, Elizabeth Bierbower, vice president of product innovation for Humana Inc., said at the fifth annual World Health Care Congress. She pointed out that 5 years after the introduction of health maintenance organizations (HMOs), combined enrollment in all existing plans was only 5.5 million. That changed quickly, once major employers became convinced—for better or for worse—that HMOs would save them money. Ms. Bierbower predicted a similar trajectory for HSAs.

Some companies are taking a very proactive role in pushing HSAs. Ms. Bierbower said Humana has been a strong HSA advocate for its employees. For those making under $50,000 annually, Humana will contribute $6 for every $1 an employee contributes to an HSA. "[The ratio is] lower if your salary is higher, but there's still a big incentive to do this. We try to encourage long-term thinking."

That, she said, is something grossly lacking in this country. People are simply not saving money, especially for health care needs, and they're in for a rude awakening as they reach retirement age.

Many baby boomers and Gen Xers will not be able to retire comfortably because they have not saved any money to do so. According to research from the Employee Benefit Research Institute, a majority of near retirees has already spent 95% of their preretirement income. The majority of workers aged 45-55 years have less than $50,000 in savings.

With copayments, pharmacy costs, and out-of-pocket expenses on the rise, even people with relatively generous health plans are finding that they still come up short. A Kaiser Family Foundation survey in 2006 showed that 29% of families reported that one or more members had difficulty paying medical bills.

Advocates of HSAs and other forms of consumer-driven coverage say that one of the primary virtues of these plans is that they push the end-user of health care services to become more cost conscious, and presumably more judicious, in their health care choices. In practice, this seems to be borne out.

A McKinsey survey showed that people enrolled in HSAs or other consumer-driven plans were 50% more likely to ask about overall costs of health care services, and 100% more likely to ask about drug costs, compared with people in traditional health care plans.

Similarly, a Blue Cross Blue Shield Association study showed that 33% of HSA enrollees asked about prescription costs, compared with only 18% of enrollees in traditional plans. Twenty percent of those in HSAs asked about the costs of physician visits, versus 14% of those who have traditional insurance.

WASHINGTON — While health savings accounts and other forms of tax-deferred, consumer-driven health care financing options have captured the fancy of many policy makers, such options have met with a lukewarm welcome among American employers and the people who work for them.

According to data from Forrester Research Inc., an independent technology and market research company, between 8 million and 9 million Americans were enrolled in a health savings account (HSA) or other tax-deferred plan as of June 2007, with 4.5 million new enrollees in 2007 alone. But consumer awareness of these options is still very low. A recent study by the Visa Corporation indicated that only 35% of all Americans have even heard of HSAs, and only 14% expressed any interest in starting one.

That is likely to change as HSAs prove their worth, Elizabeth Bierbower, vice president of product innovation for Humana Inc., said at the fifth annual World Health Care Congress. She pointed out that 5 years after the introduction of health maintenance organizations (HMOs), combined enrollment in all existing plans was only 5.5 million. That changed quickly, once major employers became convinced—for better or for worse—that HMOs would save them money. Ms. Bierbower predicted a similar trajectory for HSAs.

Some companies are taking a very proactive role in pushing HSAs. Ms. Bierbower said Humana has been a strong HSA advocate for its employees. For those making under $50,000 annually, Humana will contribute $6 for every $1 an employee contributes to an HSA. "[The ratio is] lower if your salary is higher, but there's still a big incentive to do this. We try to encourage long-term thinking."

That, she said, is something grossly lacking in this country. People are simply not saving money, especially for health care needs, and they're in for a rude awakening as they reach retirement age.

Many baby boomers and Gen Xers will not be able to retire comfortably because they have not saved any money to do so. According to research from the Employee Benefit Research Institute, a majority of near retirees has already spent 95% of their preretirement income. The majority of workers aged 45-55 years have less than $50,000 in savings.

With copayments, pharmacy costs, and out-of-pocket expenses on the rise, even people with relatively generous health plans are finding that they still come up short. A Kaiser Family Foundation survey in 2006 showed that 29% of families reported that one or more members had difficulty paying medical bills.

Advocates of HSAs and other forms of consumer-driven coverage say that one of the primary virtues of these plans is that they push the end-user of health care services to become more cost conscious, and presumably more judicious, in their health care choices. In practice, this seems to be borne out.

A McKinsey survey showed that people enrolled in HSAs or other consumer-driven plans were 50% more likely to ask about overall costs of health care services, and 100% more likely to ask about drug costs, compared with people in traditional health care plans.

Similarly, a Blue Cross Blue Shield Association study showed that 33% of HSA enrollees asked about prescription costs, compared with only 18% of enrollees in traditional plans. Twenty percent of those in HSAs asked about the costs of physician visits, versus 14% of those who have traditional insurance.

WASHINGTON — While health savings accounts and other forms of tax-deferred, consumer-driven health care financing options have captured the fancy of many policy makers, such options have met with a lukewarm welcome among American employers and the people who work for them.

According to data from Forrester Research Inc., an independent technology and market research company, between 8 million and 9 million Americans were enrolled in a health savings account (HSA) or other tax-deferred plan as of June 2007, with 4.5 million new enrollees in 2007 alone. But consumer awareness of these options is still very low. A recent study by the Visa Corporation indicated that only 35% of all Americans have even heard of HSAs, and only 14% expressed any interest in starting one.

That is likely to change as HSAs prove their worth, Elizabeth Bierbower, vice president of product innovation for Humana Inc., said at the fifth annual World Health Care Congress. She pointed out that 5 years after the introduction of health maintenance organizations (HMOs), combined enrollment in all existing plans was only 5.5 million. That changed quickly, once major employers became convinced—for better or for worse—that HMOs would save them money. Ms. Bierbower predicted a similar trajectory for HSAs.

Some companies are taking a very proactive role in pushing HSAs. Ms. Bierbower said Humana has been a strong HSA advocate for its employees. For those making under $50,000 annually, Humana will contribute $6 for every $1 an employee contributes to an HSA. "[The ratio is] lower if your salary is higher, but there's still a big incentive to do this. We try to encourage long-term thinking."

That, she said, is something grossly lacking in this country. People are simply not saving money, especially for health care needs, and they're in for a rude awakening as they reach retirement age.

Many baby boomers and Gen Xers will not be able to retire comfortably because they have not saved any money to do so. According to research from the Employee Benefit Research Institute, a majority of near retirees has already spent 95% of their preretirement income. The majority of workers aged 45-55 years have less than $50,000 in savings.

With copayments, pharmacy costs, and out-of-pocket expenses on the rise, even people with relatively generous health plans are finding that they still come up short. A Kaiser Family Foundation survey in 2006 showed that 29% of families reported that one or more members had difficulty paying medical bills.

Advocates of HSAs and other forms of consumer-driven coverage say that one of the primary virtues of these plans is that they push the end-user of health care services to become more cost conscious, and presumably more judicious, in their health care choices. In practice, this seems to be borne out.

A McKinsey survey showed that people enrolled in HSAs or other consumer-driven plans were 50% more likely to ask about overall costs of health care services, and 100% more likely to ask about drug costs, compared with people in traditional health care plans.

Similarly, a Blue Cross Blue Shield Association study showed that 33% of HSA enrollees asked about prescription costs, compared with only 18% of enrollees in traditional plans. Twenty percent of those in HSAs asked about the costs of physician visits, versus 14% of those who have traditional insurance.

WASHINGTON — While health savings accounts and other forms of tax-deferred, consumer-driven health care financing options have captured the fancy of many policy makers, such options have met with a lukewarm welcome among American employers and the people who work for them.

According to data from Forrester Research Inc., an independent technology and market research company, between 8 million and 9 million Americans were enrolled in a health savings account (HSA) or other tax-deferred plan as of June 2007, with 4.5 million new enrollees in 2007 alone. But consumer awareness of these options is still very low. A recent study by the Visa Corporation indicated that only 35% of all Americans have even heard of HSAs, and only 14% expressed any interest in starting one.

That is likely to change as HSAs prove their worth, Elizabeth Bierbower, vice president of product innovation for Humana Inc., said at a health care congress sponsored by the Wall Street Journal and CNBC. She pointed out that 5 years after the introduction of health maintenance organizations (HMOs), combined enrollment in all existing plans was only 5.5 million. That changed quickly, once major employers became convinced—for better or for worse—that HMOs would save them money. Ms. Bierbower predicted a similar trajectory for HSAs.

Diamond Management & Technology Consultants, an industry consulting company, projects that by 2010 employees and their employers will have put over $75 billion in assets into HSAs. Last year, employer contributions to HSAs already were up over 50% from the previous year.

Some companies are taking a very proactive role in pushing HSAs, especially for lower- and middle-income workers. Ms. Bierbower said Humana has been a strong HSA advocate for its employees. “We try to encourage long-term thinking.”

That, she said, is something grossly lacking in this country. People are simply not saving money, especially for health care needs. “People do not understand that Medicare does not cover everything.” According to research from the Employee Benefit Research Institute, most near-retirees have already spent 95% of their preretirement income. The majority of workers aged 45–55 years have less than $50,000 in savings. With copayments, pharmacy costs, and out-of-pocket expenses on the rise, even people with relatively generous health plans are finding that they still come up short. A Kaiser Family Foundation survey in 2006 showed that 29% of families reported that one or more members had difficulty paying medical bills.

Doctors, said Ms. Bierbower, often bear the brunt of Americans' lack of planning for health care expenses. In a Humana survey of consumer attitudes, researchers found that many Americans are quite willing to leave their physicians holding the bag, in the form of unpaid bills. “They tell us that health care providers are the last ones they will pay. They say things like, 'We know the doctor will take $10 a month.' They perceive that doctors are rich and don't really need the money.”

She added that people are much more inclined to ignore a doctor's bills than a hospital's, for the simple reason that hospitals tend to pursue their payments more aggressively and they can hurt peoples' credit ratings, something they perceive that individual doctors don't do. “We have to work with our employees and consumers to change this attitude. Doctors need to get paid,” Ms. Bierbower stressed.

She said Humana, and many other insurance carriers like Aetna, WellChoice/WellPoint, UnitedHealth Group, Kaiser Permanente, and Great-West have begun offering health care lines of credit to help people cover their out of pocket expenses, copayments, or gaps in existing coverage. The line of credit strategy is also a good option in conjunction with HSAs, to help cover sudden large expenses or as a stopgap in cases in which patients have exhausted their HSA savings. Humana's line-of-credit card is activated at the time of need, and can only be used to pay credentialed health care providers. The charges are interest free for 6 months. “We're not trying to encourage more credit card debt,” Ms. Bierbower said.

Advocates of HSAs and other forms of consumer-driven coverage say that one of the primary virtues of these plans is that they push the end-user of health care services to become more cost conscious, and presumably more judicious, in their health care choices. In practice, this seems to be borne out: a Blue Cross Blue Shield Association study showed that 33% of HSA enrollees asked about prescription costs, compared with only 18% of enrollees in traditional plans.

WASHINGTON — While health savings accounts and other forms of tax-deferred, consumer-driven health care financing options have captured the fancy of many policy makers, such options have met with a lukewarm welcome among American employers and the people who work for them.

According to data from Forrester Research Inc., an independent technology and market research company, between 8 million and 9 million Americans were enrolled in a health savings account (HSA) or other tax-deferred plan as of June 2007, with 4.5 million new enrollees in 2007 alone. But consumer awareness of these options is still very low. A recent study by the Visa Corporation indicated that only 35% of all Americans have even heard of HSAs, and only 14% expressed any interest in starting one.

That is likely to change as HSAs prove their worth, Elizabeth Bierbower, vice president of product innovation for Humana Inc., said at a health care congress sponsored by the Wall Street Journal and CNBC. She pointed out that 5 years after the introduction of health maintenance organizations (HMOs), combined enrollment in all existing plans was only 5.5 million. That changed quickly, once major employers became convinced—for better or for worse—that HMOs would save them money. Ms. Bierbower predicted a similar trajectory for HSAs.

Diamond Management & Technology Consultants, an industry consulting company, projects that by 2010 employees and their employers will have put over $75 billion in assets into HSAs. Last year, employer contributions to HSAs already were up over 50% from the previous year.

Some companies are taking a very proactive role in pushing HSAs, especially for lower- and middle-income workers. Ms. Bierbower said Humana has been a strong HSA advocate for its employees. “We try to encourage long-term thinking.”

That, she said, is something grossly lacking in this country. People are simply not saving money, especially for health care needs. “People do not understand that Medicare does not cover everything.” According to research from the Employee Benefit Research Institute, most near-retirees have already spent 95% of their preretirement income. The majority of workers aged 45–55 years have less than $50,000 in savings. With copayments, pharmacy costs, and out-of-pocket expenses on the rise, even people with relatively generous health plans are finding that they still come up short. A Kaiser Family Foundation survey in 2006 showed that 29% of families reported that one or more members had difficulty paying medical bills.

Doctors, said Ms. Bierbower, often bear the brunt of Americans' lack of planning for health care expenses. In a Humana survey of consumer attitudes, researchers found that many Americans are quite willing to leave their physicians holding the bag, in the form of unpaid bills. “They tell us that health care providers are the last ones they will pay. They say things like, 'We know the doctor will take $10 a month.' They perceive that doctors are rich and don't really need the money.”

She added that people are much more inclined to ignore a doctor's bills than a hospital's, for the simple reason that hospitals tend to pursue their payments more aggressively and they can hurt peoples' credit ratings, something they perceive that individual doctors don't do. “We have to work with our employees and consumers to change this attitude. Doctors need to get paid,” Ms. Bierbower stressed.

She said Humana, and many other insurance carriers like Aetna, WellChoice/WellPoint, UnitedHealth Group, Kaiser Permanente, and Great-West have begun offering health care lines of credit to help people cover their out of pocket expenses, copayments, or gaps in existing coverage. The line of credit strategy is also a good option in conjunction with HSAs, to help cover sudden large expenses or as a stopgap in cases in which patients have exhausted their HSA savings. Humana's line-of-credit card is activated at the time of need, and can only be used to pay credentialed health care providers. The charges are interest free for 6 months. “We're not trying to encourage more credit card debt,” Ms. Bierbower said.

Advocates of HSAs and other forms of consumer-driven coverage say that one of the primary virtues of these plans is that they push the end-user of health care services to become more cost conscious, and presumably more judicious, in their health care choices. In practice, this seems to be borne out: a Blue Cross Blue Shield Association study showed that 33% of HSA enrollees asked about prescription costs, compared with only 18% of enrollees in traditional plans.

WASHINGTON — While health savings accounts and other forms of tax-deferred, consumer-driven health care financing options have captured the fancy of many policy makers, such options have met with a lukewarm welcome among American employers and the people who work for them.

According to data from Forrester Research Inc., an independent technology and market research company, between 8 million and 9 million Americans were enrolled in a health savings account (HSA) or other tax-deferred plan as of June 2007, with 4.5 million new enrollees in 2007 alone. But consumer awareness of these options is still very low. A recent study by the Visa Corporation indicated that only 35% of all Americans have even heard of HSAs, and only 14% expressed any interest in starting one.

That is likely to change as HSAs prove their worth, Elizabeth Bierbower, vice president of product innovation for Humana Inc., said at a health care congress sponsored by the Wall Street Journal and CNBC. She pointed out that 5 years after the introduction of health maintenance organizations (HMOs), combined enrollment in all existing plans was only 5.5 million. That changed quickly, once major employers became convinced—for better or for worse—that HMOs would save them money. Ms. Bierbower predicted a similar trajectory for HSAs.

Diamond Management & Technology Consultants, an industry consulting company, projects that by 2010 employees and their employers will have put over $75 billion in assets into HSAs. Last year, employer contributions to HSAs already were up over 50% from the previous year.

Some companies are taking a very proactive role in pushing HSAs, especially for lower- and middle-income workers. Ms. Bierbower said Humana has been a strong HSA advocate for its employees. “We try to encourage long-term thinking.”

That, she said, is something grossly lacking in this country. People are simply not saving money, especially for health care needs. “People do not understand that Medicare does not cover everything.” According to research from the Employee Benefit Research Institute, most near-retirees have already spent 95% of their preretirement income. The majority of workers aged 45–55 years have less than $50,000 in savings. With copayments, pharmacy costs, and out-of-pocket expenses on the rise, even people with relatively generous health plans are finding that they still come up short. A Kaiser Family Foundation survey in 2006 showed that 29% of families reported that one or more members had difficulty paying medical bills.

Doctors, said Ms. Bierbower, often bear the brunt of Americans' lack of planning for health care expenses. In a Humana survey of consumer attitudes, researchers found that many Americans are quite willing to leave their physicians holding the bag, in the form of unpaid bills. “They tell us that health care providers are the last ones they will pay. They say things like, 'We know the doctor will take $10 a month.' They perceive that doctors are rich and don't really need the money.”

She added that people are much more inclined to ignore a doctor's bills than a hospital's, for the simple reason that hospitals tend to pursue their payments more aggressively and they can hurt peoples' credit ratings, something they perceive that individual doctors don't do. “We have to work with our employees and consumers to change this attitude. Doctors need to get paid,” Ms. Bierbower stressed.

She said Humana, and many other insurance carriers like Aetna, WellChoice/WellPoint, UnitedHealth Group, Kaiser Permanente, and Great-West have begun offering health care lines of credit to help people cover their out of pocket expenses, copayments, or gaps in existing coverage. The line of credit strategy is also a good option in conjunction with HSAs, to help cover sudden large expenses or as a stopgap in cases in which patients have exhausted their HSA savings. Humana's line-of-credit card is activated at the time of need, and can only be used to pay credentialed health care providers. The charges are interest free for 6 months. “We're not trying to encourage more credit card debt,” Ms. Bierbower said.

Advocates of HSAs and other forms of consumer-driven coverage say that one of the primary virtues of these plans is that they push the end-user of health care services to become more cost conscious, and presumably more judicious, in their health care choices. In practice, this seems to be borne out: a Blue Cross Blue Shield Association study showed that 33% of HSA enrollees asked about prescription costs, compared with only 18% of enrollees in traditional plans.

WASHINGTON — With health savings accounts serving as a point of entry, banks and other financial institutions are rapidly moving into the health care sector, and bankers believe they have much to offer in streamlining health care transactions and bringing greater efficiency to the medical world.

In terms of the digitization of health care financing, we are still in a paper-based era, and many people feel distrust for electronic health care management in the same way they felt distrust for electronic banking when it was introduced.

But bankers engaged in health care believe we're on the cusp of rapid change. Over the next decade, broader adoption of health savings accounts (HSAs) coupled with interoperable personal health records systems on the patient side, and wider use of electronic medical records on the physician side, will bring health care in line with nearly all other industries in terms of maximal use of electronic information exchange.

James S. Gandolfo, senior vice president of PFPC, a division of PNC Financial Services, and chairman of the American Bankers' Association's HSA Council, told World Health Care Congress attendees that banks' involvement in health care could be profoundly transformational.

For one, banks can provide interoperable and widely accepted technology platforms, something the health care sector has yet to develop. Banks are also very tightly regulated and standardized; they have exhaustive experience conducting rapid and high-volume data exchange in a secure environment; they provide multiple but interrelated services for millions of people. Banking technology has given ordinary people far greater control over their financial lives.

“Banks provide established rules for information exchange, and worldwide standardization,” said Mr. Gandolfo.

PNC Financial Services, which has assets of roughly $90.7 billion and $58.7 billion in total deposits, is the eighth largest treasury management group in the country. It is moving steadily into health care, positioning itself as a health care financial clearinghouse currently serving 1,200 corporate clients, including Medicare and Medicaid programs, Blue Cross/Blue Shield plans, commercial insurance carriers, and pharmacy benefits managers.

As an industry, health care has lagged far behind other industries in terms of information technology investments. Mr. Gandolfo estimated that about $3,000/worker per year is spent on technology advances in the health care sector, while about $7,000/worker per year is spent by other private sector industries, and about $15,000/worker per year is spent in the banking industry. He said that he strongly believes it is time for the health care sector to embrace the technology developed by the banking world, and he anticipates it won't be long before we routinely see card-based health care transactions, real-time information exchange, and real-time financial transaction settlements.

The health care congress was sponsored by the Wall Street Journal and CNBC.

WASHINGTON — With health savings accounts serving as a point of entry, banks and other financial institutions are rapidly moving into the health care sector, and bankers believe they have much to offer in streamlining health care transactions and bringing greater efficiency to the medical world.

In terms of the digitization of health care financing, we are still in a paper-based era, and many people feel distrust for electronic health care management in the same way they felt distrust for electronic banking when it was introduced.

But bankers engaged in health care believe we're on the cusp of rapid change. Over the next decade, broader adoption of health savings accounts (HSAs) coupled with interoperable personal health records systems on the patient side, and wider use of electronic medical records on the physician side, will bring health care in line with nearly all other industries in terms of maximal use of electronic information exchange.

James S. Gandolfo, senior vice president of PFPC, a division of PNC Financial Services, and chairman of the American Bankers' Association's HSA Council, told World Health Care Congress attendees that banks' involvement in health care could be profoundly transformational.

For one, banks can provide interoperable and widely accepted technology platforms, something the health care sector has yet to develop. Banks are also very tightly regulated and standardized; they have exhaustive experience conducting rapid and high-volume data exchange in a secure environment; they provide multiple but interrelated services for millions of people. Banking technology has given ordinary people far greater control over their financial lives.

“Banks provide established rules for information exchange, and worldwide standardization,” said Mr. Gandolfo.

PNC Financial Services, which has assets of roughly $90.7 billion and $58.7 billion in total deposits, is the eighth largest treasury management group in the country. It is moving steadily into health care, positioning itself as a health care financial clearinghouse currently serving 1,200 corporate clients, including Medicare and Medicaid programs, Blue Cross/Blue Shield plans, commercial insurance carriers, and pharmacy benefits managers.

As an industry, health care has lagged far behind other industries in terms of information technology investments. Mr. Gandolfo estimated that about $3,000/worker per year is spent on technology advances in the health care sector, while about $7,000/worker per year is spent by other private sector industries, and about $15,000/worker per year is spent in the banking industry. He said that he strongly believes it is time for the health care sector to embrace the technology developed by the banking world, and he anticipates it won't be long before we routinely see card-based health care transactions, real-time information exchange, and real-time financial transaction settlements.

The health care congress was sponsored by the Wall Street Journal and CNBC.

WASHINGTON — With health savings accounts serving as a point of entry, banks and other financial institutions are rapidly moving into the health care sector, and bankers believe they have much to offer in streamlining health care transactions and bringing greater efficiency to the medical world.

In terms of the digitization of health care financing, we are still in a paper-based era, and many people feel distrust for electronic health care management in the same way they felt distrust for electronic banking when it was introduced.

But bankers engaged in health care believe we're on the cusp of rapid change. Over the next decade, broader adoption of health savings accounts (HSAs) coupled with interoperable personal health records systems on the patient side, and wider use of electronic medical records on the physician side, will bring health care in line with nearly all other industries in terms of maximal use of electronic information exchange.

James S. Gandolfo, senior vice president of PFPC, a division of PNC Financial Services, and chairman of the American Bankers' Association's HSA Council, told World Health Care Congress attendees that banks' involvement in health care could be profoundly transformational.

For one, banks can provide interoperable and widely accepted technology platforms, something the health care sector has yet to develop. Banks are also very tightly regulated and standardized; they have exhaustive experience conducting rapid and high-volume data exchange in a secure environment; they provide multiple but interrelated services for millions of people. Banking technology has given ordinary people far greater control over their financial lives.

“Banks provide established rules for information exchange, and worldwide standardization,” said Mr. Gandolfo.

PNC Financial Services, which has assets of roughly $90.7 billion and $58.7 billion in total deposits, is the eighth largest treasury management group in the country. It is moving steadily into health care, positioning itself as a health care financial clearinghouse currently serving 1,200 corporate clients, including Medicare and Medicaid programs, Blue Cross/Blue Shield plans, commercial insurance carriers, and pharmacy benefits managers.

As an industry, health care has lagged far behind other industries in terms of information technology investments. Mr. Gandolfo estimated that about $3,000/worker per year is spent on technology advances in the health care sector, while about $7,000/worker per year is spent by other private sector industries, and about $15,000/worker per year is spent in the banking industry. He said that he strongly believes it is time for the health care sector to embrace the technology developed by the banking world, and he anticipates it won't be long before we routinely see card-based health care transactions, real-time information exchange, and real-time financial transaction settlements.

The health care congress was sponsored by the Wall Street Journal and CNBC.