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Payers are Driving E-Prescribing


By Bill Briggs, Senior Editor May 2006
Drug prescribing is one of the health care industry's traditional sore spots. Until recently, the watchwords have been "clumsy" and "dangerous" as the process relied on often illegible handwritten notes and multiple follow-up telephone calls to clarify a doctor's order or approve a refill.

Problems associated with prescription errors range from patient inconvenience-such as a return trip to the pharmacy to get the right medicine-to harmful or fatal reactions from ingesting the wrong medicine or dosage.

Payer organizations believe e-prescribing can have a dramatic impact on such problems. CareFirst BlueCross BlueShield, for one, estimates that each adverse drug event affecting one of its 3.3 million members costs the organization about $200.

In 2005, the first full year of CareFirst's electronic prescribing program, Pete Stoessel calculates the Owings Mills, Md.-based payer organization avoided about $1.3 million in costs, mostly associated with prescribing errors. Stoessel, the director of medical affairs and networks management, minces no words when it comes to describing who is reaping the most benefits from e-prescribing technology. "It does streamline some processes for providers, but frankly, this helps us and helps members."

The potential for cutting costs associated with medication errors is one reason that payers increasingly are pushing physicians to adopt electronic prescribing technology. Other reasons include substituting generic drugs for high-cost branded alternatives and keeping doctors attuned to drug formularies. Both can save millions of dollars for payers, and ultimately bring down the cost of health care.

Benefits also accrue to providers, pharmacists and patients, because, at the most fundamental level, all stand to gain precious time that in the past was devoured by telephone calls to clarify or refill prescriptions.

When electronic prescribing software is combined with drug reference information and interfaced with decision support and electronic medical records systems, the benefits expand. Among them: reduced duplicate prescriptions, better records of all medications a patient is taking and detailed patient records, including drug allergies.

Just a few years ago, electronic prescribing began and ended with the PDA or personal computer where the prescription was entered. Technological limits were quickly reached as physicians sent the prescription to a printer and either handed it to the patient or faxed it to the patient's pharmacy.

Now many electronic prescriptions are flowing from computer to computer via direct Internet connection between physician and pharmacy or through clearinghouses such as SureScripts, Alexandria, Va., and RxHub LLC, St. Paul, Minn. SureScripts manages the electronic flow of prescriptions among physicians and pharmacies, while RxHub links physicians to patient medication histories and prescription benefits information.

"Now prescriptions can flow electronically to the pharmacy," says Tony Schueth, managing partner at Point-of-Care Partners LLC, a Coral Springs, Fla.-based consulting firm specializing in e-prescribing. "It's also possible to get claims histories from many payers loaded into an e-prescribing system so the prescriber is aware of other medications a patient is taking."

Cost avoidance

Since the Institute of Medicine study in 1999 lit the beacon for patient safety, health care organizations have been trying to assign value-in the form of avoided costs-to preventing bad things from happening to patients. Payer organizations in particular have been calculating the savings derived from various initiatives to hold down health care costs and improve patient safety.

The business case for electronic prescribing is easiest to make for payers, Schueth says. "There is value from switching a patient from a brand-name drug to a generic, and in reduced hospitalizations from fewer medication errors."

Payers are driving the movement, Schueth says, led by Medicare, which is funding a $1.85 million pilot program to study standards for e-prescribing. "And private payers are succeeding with some rollouts, particularly in the Massachusetts area," Schueth adds. Even though there is little statistically significant data on the use of e-prescribing technology, small-scale studies are increasingly identifying cost savings.

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