Interoperable Electronic Prescribing In The United States: A Progress Report

Although the vast majority of U.S. physicians still handwrite prescriptions, adoption of electronic prescribing is slowly growing. Major barriers to adoption remain, including the inability to electronically submit prescriptions for controlled substances and confusion about standards for data exchange. Federal and state governments and private insurers are using payment and policy incentives to boost e-prescribing because they still believe in its promise for improving the quality and efficiency of health care. However, additional efforts and further investments are needed to reap the benefits of e-prescribing on a national scale.

ELECTRONIC PRESCRIBING BURST ONTO THE health policy scene in 2003 with passage of the Medicare Prescription Drug, Improvement, and Modernization Act (MMA). MMA created a prescription drug benefit for Medicare beneficiaries (Part D) and required that Part D plans support an “electronic prescription program,” should any of their providers and pharmacies voluntarily choose to prescribe using computer systems. MMA also called for the adoption and testing of specific technical standards for the data exchange transactions that Part D plans would use.

Medicare and other payers are particularly interested in fostering the use of e-prescribing because it could provide information at the point of care to improve the quality and safety of medication use while lowering medication costs.2 Health plans that have sponsored e-prescribing programs expect an initial return on investment (ROI) simply through increased generic drug use and formulary compliance. For example, the Health Alliance Plan of Michigan estimated a five-year ROI of more than $14 million, based on the 2005 and 2006 improvement in its generic use rate. A new study based on e-prescribing in Massachusetts found that physicians who adopted e-prescribing systems with the ability to check formulary status increased their prescribing of generics and other lower-cost options, resulting in a conservative estimate of savings for consumers and insurers of $845,000 per 100,000 patients per year. Such savings could be particularly important for Medicare, which spent $42.2 billion in 2007 for beneficiaries’ prescription drugs. Such savings also could become increasingly important for private insurers that are facing decreasing investment earnings and enrollment because of the recent economic crisis.

With the impetus from Medicare, e-prescribing has gained momentum. In many areas of the United States, payers, employers, pharmacies, technology partners, professional associations, state governments, legislators, and other stakeholders are working to spur its adoption through incentive payments; legislation; and funding for software, hardware, and connectivity fees.

Since 2006 we have seen a dramatic rise in volume for key transactions: prescription transmissions, eligibility checks, formulary and benefit information, medication history requests in ambulatory settings, and medication requests for patients in acute care settings (Exhibit 1). The numbers reflect both maturing of the market as well as expanding use by prescribers, which is still primarily occurring among early adopters. Read MOre Electronic Prescription