Incentives to e-Prescribe

Everyone, it seems, wants doctors to e-prescribe. Physicians are facing an onslaught of government incentives, state and local urgings, and healthcare and consumer organizations’ guilt to make the transition from antiquated paper prescription pads to 21st century electronic prescription systems.

Medicare Incentive Program

The biggest step toward universal e-prescribing was the passage on July 15, 2008 of the new Medicare law that includes an incentive program to increase the use of e-prescribing. Under the measure, physicians participating in Medicare Part D who e-prescribe will receive an incentive bonus of 2% starting in 2009 and for 2010. The bonus goes down to 1% for 2011 and 2012, and to 0.5% in 2013. In addition, Medicare doctors who do not e-prescribe will see their Medicare payments reduced by 1% in 2012, 1.5% in 2013, and 2% thereafter. 

Some states are sweetening the Medicare deal. For instance, Tennessee has offered a grant of $3,500 to doctors who e-prescribe for two years. And while New Hampshire has not offered monetary incentives, the state’s Citizens Health Initiative, backed by the governor, developed a plan two years ago to encourage all physicians to e-prescribe by October 2008.

The new Medicare rule has the blessings of the Pharmaceutical Care Management Association (PCMA), which says the policy would save $26.3 billion in the next 10 years. A study commissioned by PCMA found that only 7 percent of physicians e-prescribe. On the other hand, the American Medical Association projects no savings from e-prescribing and is leery of an unfunded mandate on already overburdened physicians complying with Medicare.

So vital to the safety and efficiency of our healthcare system is the need for physicians to make the transition to electronic prescribing, Republicans and Democrats in the House and Senate came together to override President Bush’s veto of the Medicare initiative to push the measure through.

Benefits of E-Prescribing

The benefits of e-prescribing are immense.

Medication errors. The most obvious is the elimination of devastating and costly medication errors due to doctors’ poor handwriting. According to the Institute of Medicine, 7,000 patients die and 1.5 million people are injured annually by medication errors. With an electronic system, patients won’t lose their prescriptions, and pharmacies will fill the right prescription for the right patient.

Contraindications. E-prescribing systems keep track of each drug, its side effects, and its contraindications, as well as all the medications a particular patient is taking, his allergies and drug history. With 1.9 million adverse drug events in the last 10 years, e-prescribing can avoid negative drug interactions. Medicare’s incentive could save it $156 million in five years by reducing adverse drug effects.

Insurance coverage. Also with e-prescribing systems, physicians have complete access to information about their patients’ private or government insurance information and coverage for specific drugs. 

Speed. When a physician submits a prescription order electronically to a pharmacist, the patient can leave the doctor’s office and go right to the pharmacy to find the medication waiting for him.

Merger Spurs Use of E-prescribing

Entrepreneurial companies have not been waiting for the government to encourage physicians to e-prescribe. Up until recently there were two private, competing electronic prescription networks that have been developing their own e-prescribing infrastructure and vying for the attention of physicians.

One is SureScripts, begun in 2001 and based in Alexandria, VA, which is owned by the retail focused National Association of Chain Drug Stores and by independent pharmacies represented by the National Community Pharmacists Association. 

The other is St. Paul-based, RxHub, owned by three major drug benefit managers and leading mail-order pharmacies CVS Caremark, Express Scripts, and Medco Health Solutions. 

The two companies recently announced a merger of their integrated network, to be called SureScripts-RxHub. It’s a seemingly perfect match, as SureScripts routs prescriptions to pharmacies, while RxHub coordinates information about insurance coverage and offers mail-order pharmacy services.

The new company wants to be a major force in creating a national electronic health records system in the country that connects physicians, pharmacies, and insurance companies. Physicians can electronically send prescriptions directly to pharmacies and to mail-order suppliers. And the technology will be easier to use, as companies that make the software and hardware will need to be certified by both SureScripts and RxHub.

Will Doctors Really Change?

Some say the Medicare incentives will result in a doubling of the number of doctors who e-prescribe, while others are skeptical that the mandate will see any discernable changes. Doctors are notoriously reluctant to change their ways. High start-up costs for the technology and the learning curve to be comfortable with the software are contributing to the reluctance. Currently only 2 percent of the 1.5 billion annual prescriptions received by pharmacies are submitted electronically.

Concerns about E-Prescribing Technology

Understandably, some physicians, organizations, and consumer groups are concerned about the safety of electronic systems. Human error is still a factor, as doctors could type in the wrong prescription they intended or the wrong dosage. In addition, a pharmacist could misread the drug or misinterpret directions for the medication.

Cost is another main factor. The Medicare program provides no per-prescription cost incentive for e-prescribing. Moreover, some industry analysts say the few thousand dollars physicians will receive in incentives will make them only break even after spending an equal amount in upfront technology investments. Physician groups say the monetary incentives to switch to e-prescribing need to be higher.

Privacy concerns are common, as some groups are itchy about vast amounts of patient data sitting in one network and passing through various doctors’ offices, insurance agencies, and drug stores. There’s also the risk of hackers and identify theft. Patients and physicians need to be confident that sensitive medical information will be used properly and not resold or tampered with.