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Blog | Operations Management

Digital Identity in Healthcare: Building on the Banking Model

Blog | Operations Management

Digital Identity in Healthcare: Building on the Banking Model

Gus Malezis describes lessons healthcare organizations can learn from the banking industry.

Today, digital identity is integral to transactions and interactions in the financial world. For many years the banking industry has used passwords and tokens to provide consumers access to accounts and virtual services. But outside of high-security spaces like banking and government services, adoption of digital identity has been slow, even in health care.

In the financial services industry, a bank card (e.g., a debit or credit card) serves as identification for the financial transaction system. 

Banking has succeeded with this system of digital identity because of its use of identity-proofing and validation. This has proven to clean, simple, trusted, and flexible system. Identity theft is a risk but statistically the exception to the rule.

Application in Health Care

The banking industry’s version of identification serves as a useful template for health care, although some adjustments are necessary.

In some form or another, health care must include identity proofing, and banking has provided a useful model through validation of the relevant state/country legal entity via a passport or driver’s license. In this vector, multiple layers are preferred and add to the quality of validation.

Health care could add additional vectors such as biometrics. Biometrics, with multiple layers, will define the physical biological entity (via iris, palm vein, etc.) as associated to the legal entity. 

Biometrics are a critical safeguard that also can help clinically. Imagine a patient is unable to present his or her name after, for example, an accident that renders the patient unconscious. EMTs and other care providers can use biometrics to identify the patient, accessing medical history and other information such as the patient’s primary care physician.  

Physicians, too, could have identity proofing for accreditation. Such identity proofing is important because physicians, nurses, and others now are interacting with more than one clinic, or more than one acute care facility. Digital identity is of high value in these contexts. 

The positive financial impacts of comprehensive patient digital identity are represented largely in two areas: hospital revenue cycles and operational efficiencies. 

In the first case, hospital revenue cycles, when patients are misidentified, hospitals lose revenue. Patient identification errors result in denied medical claims and write-offs, unnecessary duplicative testing, costly clean-up of duplicate and overlaid medical records, and a loss in patient retention.

Duplicate medical records make up 8 percent of all hospital medical records and are a large source of patient misidentification, costing hospitals up to $1,000 to fix. Overlays are even more complex, costing up to $5,000 to cleanse and unmerge. Further, in many scenarios, a physician may not have the correct medical history for the patient and they order unnecessary orders and testing, for which the hospital is later unable to get paid.

In the second case, operational efficiencies and financial benefits are realized when comprehensive patient digital identity is applied throughout the workflow of the hospital and care delivery system. This kind of digitization has helped the financial and airline industries deliver better service by automating repeatable tasks. 

In health care, not having a clear identity leads to unfortunate outcomes. Fortunately, the financial sector has laid much of the groundwork for us. There are lessons we can start with as we build a robust digital identification system for healthcare.

Gus Malezis is president and CEO at Imprivata, Lexington, Mass.

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Gus Malezis

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