Everyone Loves e-Prescribing! Right?

November 12, 2008
Daniel Hier, MD, MBA

MDNG Pediatrics, November 2008, Volume 6, Issue 7

Electronic prescribing is rapidly gaining support from a diverse array of healthcare organizations, government agencies, and technology corporations.

Electronic prescribing is rapidly gaining support from a diverse array of healthcare organizations, government agencies, and technology corporations, including CMS; the American College of Cardiology; the Department of Defense; the Institute of Medicine; Blue Cross and Blue Shield Association; all of the major pharmacy chains; as well as Dell, Microsoft, Sprint, Fujitsu, and Cisco. Although it may seem as though everyone loves electronic prescribing, there are a few notable exceptions, especially within the physician community. Pharmacists dispensed nearly 4 billion prescriptions in 2007, accounting for roughly 10% of healthcare costs, or about $286.5 billion. Forrester Research has estimated 900 million prescription-related phone calls per year, with 30% requiring callbacks to physician offi ces to clarify prescriptions (Forrester Research, 2002; Medco Health, via ePharmaceuticals). In addition, pharmacists make 500 million calls to physician offices annually to get approval for expired refills. The Institute for Safe Medical Practices estimates up to 3 million of the 8.8 million adverse drug events that occur annually are preventable. Preventable errors include unclear telephone orders, ambiguous orders, illegible handwriting, incorrect dosages, and unclear abbreviations. Electronic prescribing has been heralded as a technology that will improve effi ciency, reduce these errors, and decrease costs. But is everyone on board?

Vendors love e-prescribing

Increased electronic prescribing will benefi t the electronic prescribing vendors, as they earn revenue by selling software to physicians. E-prescribing vendors include standalone e-prescribing software, as well as software integrated into EHRs. Refer to the table for a list of standalone products and vendors off ering EHRs with integrated e-prescribing capabilities, or standalone e-prescribing software, along with Web addresses for each.

The NEPSI eRx Now product is Web-based and currently available at no charge to physicians in the US. Cost of other standalone or integrated e-prescribing programs varies from $20 to $80 per physician, per month.

Capabilities of e-prescribing software vary by vendor. SureScripts has identified five core features: e-prescribing (the ability to transmit prescriptions electronically to pharmacies); eRefills (the ability to receive refill requests from pharmacies electronically); Rx history (the ability to access a patient’s prescription history); eligibility (the ability to determine a patient’s prescription benefits); and formulary (the ability to determine the cost of drugs for each patient depending on the benefits plan). SureScripts has currently certified six products as GoldRx, meaning that they are capable of each of these functions. The vendors are Allscripts, eRx, DrFirst, eClinicalworks, NextGen, and Networking Technologies (vendor for RxNT).

CMS loves e-prescribing CMS has been a strong advocate for e-prescribing, and as a result of legislation passed in July 2008, beginning January 1, 2009, doctors will get a 2% bonus for e-prescribing, continuing into 2010. The bonus drops to 1% in 2011 and 2012, and then to 0.5% in 2013. CMS believes that e-prescribing will increase generic drug prescribing, reduce drug costs, reduce adverse drug events, and improve effi ciency of the healthcare system.

CMS has defined e-prescribing as “the transmission, using electronic media, of prescription or prescription-related information between a prescriber, dispenser, pharmacy benefi t manager, or health plan, either directly or through an intermediary, including an e-prescribing network. E-prescribing includes, but is not limited to, two-way transmissions between the point of care and the dispenser.”

Insurers and third-party payers love e-prescribing

Major insurers, in my experience, tend to believe e-prescribing will reduce adverse drug reactions and decrease drug costs by encouraging better compliance with drug formularies and more use of generics. BCBS of North Carolina estimates that it will save $250 per doctor per month with e-prescribing, due to increased use of generics. Anthem BCBS of New Hampshire has announced it will provide free e-prescribing software to every physician in the state. BCBS of Massachusetts estimated that it saves $20 to $25 per prescription when an e-prescribing prompt causes a physician to switch his drug choice to a less expensive alternative. Henry Ford Medical Group found that e-prescribing increased its use of generic drugs by 7.3% and saved the plan $3.1 million in pharmacy expenses.

Most consumers love e-prescribing

Consumers may benefit from faster transmission of their prescriptions to pharmacies and not having to wait for prescriptions to be filled. However, patients may experience a hassle factor if their prescriptions are sent electronically and there is no record of the prescription when they arrive at the pharmacy. This may require re-contacting the physician to call in the prescription. Currently, Schedule II medications (most narcotics and sedatives) cannot be transmitted electronically and must either be called in by the physician or prescribed on paper. Consumers are the theoretical benefactors of e-prescribing if the prescriptions are more legible (fewer errors), if physicians adhere to the benefit manager’s formulary (lower costs), and if physicians utilize decision support (fewer drug reactions and allergic reactions). In a survey by the Commonwealth Fund, 71% of consumers favored e-prescribing over traditional paper-based prescriptions.

Some, but not all, physicians love e-prescribing

Physicians have been slow to adopt e-prescribing. Currently, only about 6% of office-based physicians are e-prescribing. Further, physicians e-prescribe only 2% of the 1.47 billion prescriptions that are eligible for electronic transmission. Reasons cited for this include hardware costs, software costs, and training costs. In addition, it has been said that old habits die hard, and physicians have been reluctant to change their workfl ows in order to accommodate e-prescribing. Many observers have noted that it is hard for an electronic prescription to beat the convenience of a pen and prescription pad. The current ban on e-prescribing of controlled substances is another barrier to physician adoption of e-prescribing. Physicians can benefi t by receiving refi ll requests electronically instead of by phone or fax. This can significantly increase office efficiency. A Brown University study suggested that e-prescribing can cut physician time spent on renewals from 35 to 17 minutes per day and staff time spent on renewals from 87 to 43 minutes per day. Although initial prescriptions are probably faster with pen and pad, refi lls can be performed faster electronically than by paper methods.

Physicians can improve patient safety by using e-prescribing with decision support that identifi es allergies and drug interactions. Further benefi ts of e-prescribing are gained when the e-prescribing is integrated with an EHR so that the e-prescribing process automatically assists in maintaining an accurate drug list and assists with the medication reconciliation process.

Pharmacy Health Information Exchange (PHIE) loves e-prescribing

In 2008, SureScripts merged with Rx Hub to form (you guessed it) SureScripts-Rx Hub. This entity provides the electronic infrastructure for e-prescribing and connects physicians, pharmacies, and prescription benefit managers (PBMs) together. Once on this network, physicians can transmit prescriptions to pharmacies, pharmacies can request refill authorizations from physicians, and pharmacies can access formulary and benefit information from PBMs. Some e-prescribing software allows physicians to access formulary information about their patients as well as prescription histories from PBMs through the PHIE. The PHIE earns revenue by charging pharmacies for transactions (either initial prescriptions or refill requests).

Most large pharmacies love e-prescribing

Pharmacies generally favor e-prescribing, as is seen in the 2001 founding of the SureScripts Electronic Prescribing Network, which makes e-prescribing possible, by the National Association of Chain Drug Stores and the National Community Pharmacists Association. Currently, more than 70% of the pharmacies in the US are connected to the SureScripts network and can receive e-prescriptions electronically (most of the remaining 30% can be reached by fax). E-prescribing reduces time spent faxing or calling physicians. Some pharmacies may be able to interface the SureScripts network directly to their in-house computers, reducing time and labor spent re-entering prescription information. Dispensing errors due to illegible handwriting or data entry errors can be reduced. Patient waiting time can be reduced for prescriptions received electronically before the patient arrives at the pharmacy.

On the down side, pharmacies must pay a transaction fee for each refi ll request sent out, as well as for each prescription received. However, labor savings on these transactions should exceed transaction costs.

Not all pharmaceutical manufacturers love e-prescribing Pharmaceutical manufacturers have mixed feelings about e-prescribing. They view positively the eff ects of e-prescribing on patient compliance with prescriptions. However, they have expressed concern that e-prescribing could push more prescribers to substitute generic medications for brand name medications.

Who pays for e-prescribing?

Physicians pay software vendors for the e-prescribing software they use. Free e-prescribing software is available from the NEPSI (eRx Now). Increasingly, both CMS and other payers are realizing that physicians will need fi nancial incentives to switch to e-prescribing, as noted above. Private insurance plans are increasingly willing to subsidize the cost of the software used by physicians. Pharmacies that either receive e-prescriptions or send refill requests electronically to physicians must pay a per-prescription transaction fee. This transaction fee paid by the pharmacies is split between the software vendor and the SureScripts network.

Dr. Hier is a professor of neurology and rehabilitation at the University of Illinois at Chicago, and the outgoing Physician Editor-in-Chief of MDNG: Neurology Edition.