Stimulus Package to Promote E-prescribing, Reduce Costs

March 20, 2009

The stimulus package incentives for health IT will double the amount of e-prescribing by physicians and lower drug and medical costs by $22 billion over the next decade.

The stimulus package incentives for health information technology (health IT) will double the amount of e-prescribing by physicians and lower drug and medical costs by $22 billion over the next decade, according to a study from consulting firm Visante.

By 2014, more than three-quarters of prescribers will use electronic methods, according to the report, which was commissioned by the Pharmaceutical Care Management Association.

This is double the number that is anticipated after passage of the Medicare Improvements for Patients and Providers Act of 2008, which included incentives for Medicare providers to use e-prescribing.

The $22 billion that would be saved by e-prescribing would more than cover the $19 billion dollars included in the stimulus package in health IT spending, called the American Recovery and Reinvestment Act of 2009, according to an iHealthBeat article.

However, the law’s provisions will not entirely cover the cost to providers of adopting electronic health records.

Currently, less than 15% of prescribers use electronic methods, according to the Visante report, which also described how e-prescribing would save money:

- Informing doctors at the point of prescribing about the cost and clinical characteristics of medication options and letting doctors choose the best and most affordable drugs, including more generic drugs.

- Giving doctors the patient’s medication history so that harmful drug interactions and duplicate prescriptions can be avoided.

- Notifying doctors of pharmacy options, including mail-order and retail drug stores, to help them hold down patients’ out-of-pocket costs

- Transmitting the prescription to the pharmacy electronically, thereby reducing waiting times and errors associated with illegible handwriting.

In addition to cutting the federal government’s costs by $22 billion, the report states that healthcare payers will save a total of $56.2 billion under the American Recovery and Reinvestment Act.

The increase in health IT adoption will also prevent 3.5 million adverse drug reactions and 585,000 hospitalizations stemming from those reactions, the report states.

To read the Visante report online, click here.