Anyone know where the biggest identity project in the world is going on today? Would you believe Germany?

It's true, though. The "Electronic Healthcard" or "elektronische Gesundheitskarte" (known as the "eGK") will soon be issued to some 80 million citizens, providing them for the first time with a digital identity aimed at reducing healthcare costs and improving the quality of service for patients. It may actually save some lives, too, by giving doctors a way to track patient histories and avoid possible side effects or drug allergies.

Of course, simply handing out 80 million chip cards isn't going to transform the German healthcare system. First, some 120,000 family physicians and specialists, 65,000 dentists, 21,000 apothecaries, 2,200 clinics and 260 health insurance providers need to be hooked up, too. And this is turning out to be an identity management nightmare of truly historic dimensions.

Scheduled to go online in 2006, the project has been held up by bureaucratic hassles and technical glitches. The next round of tests are now set to begin sometime in 2008, roughly two years behind schedule. And it's anybody's guess when the system will really be up and running.

Even then, hopes are low that the initial goal of lowering the costs for Germany's compulsive healthcare program will materialize. Experts agree that things like digital patient records and telemedicine can streamline the clunky system now in place. Unfortunately, that isn't going to happen anytime soon.

Instead, government has chosen prescribe only the first step of the project which will focus only on the administrative side and designed to reduce paperwork. Okay, better than nothing, proponents say. But this could have been achieved by pimping the current system of insurance cards ("Versichertenkarte") which already have chips baked into them but lack a photo of the patient. This, along with the fact that there is no way to quickly crosscheck to see if the patient is already being treated somewhere else, is an invitation to insurance fraud. "We get whole families of Turkish guest workers coming in and using mommy's card to get free treatment", a doctor recently told me.

All the goodies that might really make a difference in healthcare costs have been classified as "voluntary". In the case of Germany's cash-strapped clinics, many of which are tottering on the brink of bankruptcy, this probably means never. So much for telemedicine and the future hospital.

Identity management vendors face an uphill fight in pursuading German healtcare officials and clinic IT admins to invest in hot new technology. Especially so since in typical German fashion the so-called "service providers" (read: insurance companies) and the German government have formed a bureaucratic monster called "Gematik", a joint venture charged with developing the infrastructure framework and setting the standards for things like card readers and network interfaces.

Since most IdM vendors are from the U.S., they of course don't have a say in the internal deliberations of Gematik and the German government. Instead, they are currently attempting to pursuade individual public and university hosptials and private clincs to buy their products. Good luck, I say! Since Gematik takes it's cues from the Delphic oracle, no purchaser or decision maker in his or her right mind will go out on a limb today and sign a check, since they may have to mothball the system in a year or two when Gematik finally draws back the curtain and reveal - surprise, surprise! - something completely different than expected.

Safe to say, therefore, that Germany's eGK is not only the biggest identity project in the world, but one of the most enigmatic, too. Many clinic operators will use this as an excuse to keep their heads down and wait for Gematik to get its act together. Smart operators should focus on things like standardizing their systems, beefing up their infrastructure and doing identity data housecleaning, all of which will pay off some day no matter what technical framework Gematik finally comes up with.

IdM Vendors should up the pressure on Gematik to force them to provide a better glimpse of the direction they are thinking in, while touting schemes like identity federation based on open international standards as an alternative to a national German solo effort. They might also casually suggest that the German penchant for cramming everything they can possibly dream of into a single bloated solution may not be the best way to solve the cost crisis in healthcare. They might want to use a quaint German expression to describe the worst-case end result: It's called "eierlegende Wollmilchsau" - an egg-laying, wool-growing, milk-giving pig.