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A Western New York entrepreneur's plans to launch a system to process healthcare transactions electronically has taken a step forward after the new venture inked a deal to license the necessary technology from an Australian company.

Health Transaction Network, a Buffalo-based company started by ATM network veteran Joseph Wolfson, said it has signed an agreement with ICS Global Ltd. of Sydney, Australia, to use ICS' software.

"This was clearly the one (part) that was the most important," Wolfson said. "It's probably a little faster and sooner than I had expected, but it's very good news for us."

ICS, a publicly traded health technology and engineering firm, has been focusing on similar work in Australia since late 2001, and now handles transactions for 56 percent of the privately insured population and 30 percent of private hospital beds. But it wants to license its software in other countries in a bid to eventually develop an international medical transaction network.

It signed up a licensee in the United Kingdom in August, and is now in talks with companies in Japan, France, Greece and Turkey. ICS hopes the companies will all sign reciprocal agreements to link their networks, eventually allowing a Buffalo patient traveling in London, Paris, Athens, Tokyo or Istanbul to see a doctor without delays and paperwork.

"That's never been done before. It's a very exciting concept," Wolfson said. "It adds a whole new dimension to what we were talking about."

Wolfson, who previously founded the Metroteller and Cartel automated teller machine networks, unveiled a plan two months ago to link Western New York providers, insurers and financial institutions electronically in order to automate a health-care system that today is still largely paper-based. He has received commitment letters from many of the region's hospitals and large insurers.

The card system would make it easier to get and pay for medical care without phone calls, faxes and paperwork, he said. And the concept could cut back-office costs by hundreds of billions of dollars, speed payments for providers, and reduce fraud.

The network is centered around a plastic Visa or MasterCard debit card that, besides the traditional magnetic stripe linking the card to a bank, also has a bar code containing the digital equivalent of the customer's fingerprint and signature.

After customers verify their identity by signing on a screen and touching their finger to a scanner, the network would automatically link to the insurer to see what the customers are eligible for, what the co-pay or deductible is, and whether any referrals are necessary. At the end, the customers could swipe the card through a traditional card reader to pay via a health savings account.

Wolfson first developed the concept nearly two years ago, but didn't have the technology two months ago. The deal with ICS advances his plans.

"I'm really bullish on the fact that they've landed this particular partnership," said John Casillas, executive director of The Medical Banking Project, a Franklin, Tenn.-based think-tank focused on medical banking technology.

But he and another technology expert cautioned that the health systems are very different in Australia and the United States, and the companies have to make sure the technology reflects that.

"Nobody has the kind of crazy health system that we do," said Deborah Kohn, principal of Dak Systems Consulting, a national healthcare information technology consulting firm in San Mateo, Calif. "The fact that they speak English means nothing. The fact that they have completely different health payment systems means a lot."

The agreement calls for Health Transaction Network to pay ICS an upfront fee of less than $100,000 to modify the software. The network will also pay a flat fee per transaction.

The final agreement will be signed within 45 days.

"The time to market has been cut down dramatically," Wolfson said. "We want to be first. We want to really get a jump on the market."

ICS president and chief executive Tim Murray learned of Wolfson's plans while in New York City for a meeting with a consulting firm. At the time, Murray was seeking a U.S. partner.

Initially, Health Transaction Network can use ICS's data center in Sydney, but will eventually be able to bring everything in-house in Buffalo. Wolfson plans a short pilot before the full launch of the new program.

"I'm excited about it," Wolfson said. "It was my biggest headache. It was the one big insecurity I had."


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