October 19 2006

By Thomas Gaudio

BIZ SPOTLIGHT - Health Care

A little future history: A woman goes to a doctor and has a rice-sized microchip injected under the skin of her right upper arm. Months later, she is brought unconscious into an emergency room. There, instead of ordering a broad battery of tests, a doctor first scans her arm. The scanner picks up a 16-digit code stored on the chip, unlocking her electronic health record that contains information used to save her life.

A number of Garden State organizations are working to make this a day-to-day reality, rather than a novelty. Hackensack University Medical Center, Horizon Blue Cross Blue Shield of New Jersey and Emergency Medical Associates in Livingston are involved in tagging patients using the VeriMed Patient Identification System. It features the VeriChip, the only radiofrequency identification (RFID) device approved for use in humans by the U.S. Food and Drug Administration.

In the above scenario, everybody came out ahead: The woman lived because she received the right treatment before it was too late, and she was spared unnecessary and expensive medical procedures. The doctor saved time by not having to work up her illness from scratch. The patient’s medical insurance carrier kept the money it would have been spent on extraneous tests.

Needless testing—and the accompanying delays—are a problem at emergency rooms across the country, says Joseph Feldman, chairman of emergency/trauma at Hackensack University Medical Center. If VeriChips were to replace iPods as the next must-have accessory, hospitals would see a “big financial gain,” he says.

“It’s part of our mission to look at new and evolving technologies,” says Feldman. “We look to see if they improve quality of care, patient safety and economics. We saw it [VeriChip] hitting all of those buckets.”

The VeriMed System is made by VeriChip, a subsidiary of Florida-based Applied Digital. It was approved for use in humans by the FDA in October 2004.

While the federal agency raised concerns in its approval letter to the company about potential health risks associated with the device—including tissue damage—Feldman says none of the 40 patients who have been implanted with the device at Hackensack has reported any adverse effects. He says the chip can be easily removed if the patient so desires.

The VeriMed System got its first test in Hackensack this past summer. Sgt. William Koretsky, a Bergen County police officer who had the device implanted last year, was brought to the center in July with head, neck and back injuries after a high-speed car chase ended in an accident. The system worked fine, says Feldman, giving the hospital staff instant access to Koretsky’s medical records. The officer was able to return to duty shortly after, says Feldman. Koretsky is the only chip-bearing patient the staff has seen, says Feldman.

The RFID technology in Koretsky has been around for years. Similar devices track products through the supply chain in many industries and are used by veterinarians, animal lovers and animal shelters to keep tabs on pets.

The very ubiquity of the technology is what worries civil liberties groups. They say people with the chips could one day be tracked as easily as their pets or their E-Z Pass-equipped cars.

So far the VeriChip is used at more than 5,000 institutions across the globe in security, government and health care environments, according to Applied Digital. The company has a variation of the device that can be located by satellites but it is not yet on the market, says spokeswoman Nicole Philbin.

Hackensack University Medical Center was provided with the equipment at no cost by Applied Digital, which is giving away scanners to the first 200 hospitals that come on board. The technology maker hasn’t yet determined how much it will charge hospitals thereafter, says Philbin.

Applied Digital says private-practice physicians will perform the bulk of the implantations. The company says doctors are charging between $200 and $400 for the procedure, pulling from a VeriMed kit that contains 10 chips and scanner.

Hackensack is not charging people to be implanted, but may begin to do so soon, Feldman says. Any patients who enter the center’s ER will be scanned if they are unconscious, awake but incoherent or indicate that they have been tagged with the chip.

The code picked up by the scanner opens an online e-health record created and managed by Applied Digital that contains information provided by the patient. Applied Digital charges patients a yearly fee of $20 to maintain basic data such as contact and organ-donor information. The annual fee increases to $80 to store more advanced information such as medications, diagnoses and results of lab work.

This is not the ongoing medical record maintained by the patient’s doctors, but whatever information the client chooses to supply. It could be as little as an emergency-contact phone number. But that may change soon.

In July, Hackensack and its network of affiliated private-practice doctors agreed to join a two-year pilot project led by Horizon Blue Cross Blue Shield of New Jersey, the Newark-based health insurer, in which 300 of its sickest customers will get the implant.

No Horizon members have received the device yet, but plans call for their VeriMed Patient Identification System records to be populated with data from Horizon, including past diagnoses and medication history, says Vidya Raman-Tangella, manager of clinical innovation at Horizon.

But “down the road we could very well host a record of our own and have the chip point to it,” she says. Customers may opt out of the project at any time, says Raman-Tangella.

Hori zon is covering all costs associated with the pilot project. The insurer will be evaluating whether to continue covering the procedure after the pilot program, basing its decision largely on how effective the system is in improving its patients’ care, says Raman-Tangella.

Another group trying the system is Emergency Medical Associates (EMA), a group comprising about 200 ER doctors and other medical workers who work at 18 hospitals in New Jersey and New York. It is going to seed the emergency rooms in its network with VeriMed scanners.

Meanwhile, private-practice physicians affiliated with the hospitals in EMA’s network are marketing VeriChip to patients with conditions including chronic obstructive pulmonary disease, says Scott Serbin, EMA’s director of education and research.

EMA staff can be found in 13 hospitals throughout the Garden State including five of the seven medical centers that comprise the Saint Barnabas Health Care System.

“The sooner you can identify chronic conditions in an emergency situation, the easier it is to order the appropriate treatment. From a disease-management perspective, it’s what everyone in health care is looking for,” says Serbin. “Ultimately, it makes the process more cost effective.”

He says savings would also occur, for example, if a doctor who was thinking about ordering a magnetic resonance image of a patient didn’t because the VeriMed record showed that an MRI had been done the day before.

EMA has its own e-health record that the group is “exploring the possibility” of linking to the VeriMed system’s database, says Serbin.

The prospect of merging repositories of sensitive data that is linked electronically to individuals has the Electronic Privacy Information Center spooked. The public interest research group, based in Washington, D.C., has called for legislation to rein in potential abuses of VeriChip. The FDA, too, has warned that VeriChip could be vulnerable to data thieves.

Philbin says security and privacy is not a concern because the system cannot be hacked or cloned. She says the chip does not emit a signal and can only be read by the company’s proprietary scanner from a maximum distance of three feet.