Jul. 31--President Bush's former health secretary Tommy Thompson is putting the final touches to a plan that could result in US citizens having a radio frequency identification (RFID) chip inserted under their skin, The Business has learned.

The RFID capsules would be linked to a computerised database being created by the US Department of Health to store and manage the nation's health records. It could be the precursor to a similar scheme in the UK.

The president's budget for 2006 continues to support the use of health information technology by increasing funding to $125m (£70m, E103m) for pilot schemes.

Thompson, now a director of Applied Digital Solutions, the company that makes the chips, intends to publish the proposal in the next 50 days, by which time he plans to have had a VeriChip inserted in his arm. Thompson believes the capsules could help save thousands of lives every year.

VeriChip spokesman John Procter says around 98,000 people die needlessly in the US every year after being given inappropriate treatment because their medical history was not available.

"There is a vast range of people who could benefit from having an RFID chip inserted under their skin as insurance against an accident. People with adverse reactions to certain medicines such as penicillin, people with pacemakers, people with allergies, people with weak hearts, would be made safer by a process that costs around $200 per person. In fact, virtually everyone could benefit from having a chip inserted."

The company intends to lobby the UK health authorities to inject the chips into British patients.

According to Procter, the chips can also be used for financial transactions. In Europe, the Baja Beach Club chain has introduced chipping in the Netherlands and Spain.

The VeriChip is inserted at the club and means club-goers will no longer have to wait in line to pay to get in and will be able to use the chip to pay their bar bill.

Civil liberties groups such as Caspian in the US fear that the need for increased security in the wake of terrorist attacks could act as a catalyst for a more widespread use of VeriChips.

-----