Employers, Lawmakers Push Doctors to Adopt Electronic Prescriptions

Motivated by mounting medical costs, lawmakers and executives are urging doctors to embrace a seemingly simple way to save billions of dollars a year: prescribe medications online.

Officials in the public and private sectors say electronic prescriptions will make transactions more efficient, reduce medication errors and entice doctors to prescribe less expensive drugs.

The next generation of doctors, who shop and socialize online, are already using the technology in medical school. But older physicians have been reluctant to go paperless, arguing that the upfront costs of going digital fall on their shoulders, while the immediate savings go to pharmacy benefits managers that are paid to keep prescription costs low.

A majority of pharmacies are equipped to receive electronic prescriptions, but just six percent of U.S. physicians own the software, according to Surescripts, an electronic-prescribing network operator.

That number is too low for corporate America, which has jumped in on the side of electronic prescribing in the technology tug-of-war. Ford Motor Co., Verizon and Wal-Mart are pulling for electronic prescribing to keep their health care costs from pummeling profits.

Health care expenses are on track to account for $1 of every $5 spent in the U.S. by 2018. However, a widespread shift to electronic prescriptions could save the government $29 billion over a ten year period, according to one industry estimate.

The technology itself is simple: a doctor uses a computer to send an electronic copy of a prescription to a pharmacy, eliminating messy handwriting. Some programs also warn doctors if they prescribe medicine that may counteract with others the patient takes. Most important for employers, programs display prices to help doctors choose cheaper medications.

When doctors choose cheaper drugs patients also save on lower co-pays.

But doctors complain the programs often give unnecessary warnings and provide incomplete information.

And without government subsidies, like those paid to European doctors, physicians say they have little reason to invest in the programs.

Their complaints are falling on deaf ears in Washington.

“It saves lives. It saves money and it’s time,” Health and Human Services Secretary Mike Leavitt told lawmakers at a recent budget hearing. Warning that Medicare is on course to go bankrupt in 11 years, Leavitt urged Congress to push cost-saving technology now before expenses of retiring baby boomers overwhelm the system.

Medicare is completing standards for electronic prescribing software. Doctors in the program who prescribe electronically would have to use Medicare-approved software to ensure seniors’ medical information is kept secure.

Leavitt supports a proposal that would help doctors pay for electronic prescribing, reward them each time they use it and penalize doctors who aren’t using the technology by 2011.

While the focus on electronic prescribing is new, the technology is not. Companies like Allscripts and DrFirst have been making the software for nearly a decade, but physicians have had few incentives to use it.

The challenge is convincing doctors that electronic prescribing benefits them, not just the government, employers and patients.

Corporations are finding ways to ensure doctors benefit, by paying those who use the technology extra.

Ford said it saved $3 million last year after buying electronic prescribing software for physicians in its employee health network.

The savings mainly came from higher use of generic drugs, which rose to 70 percent from 55 percent. Doctors received an annual bonus for prescribing more generics.

That’s a savings other corporate giants can’t ignore.

Wal-Mart’s chief executive pledged last month to work with doctors and insurers to increase the number of electronic prescriptions filled in the U.S.

And General Motors Corp., Verizon and Dow Chemical Co. are among the companies urging Congress to pass electronic prescribing legislation.

Pharmacy benefits managers like MedcoHealth Solutions and CVS Caremark Corp., who stand to gain the most from the technology, have invested even more in the effort.

Their trade group spent more than $250,000 lobbying Congress last year, including on a bill, proposed by Democratic Sen. John Kerry that would pay a bonus to doctors in Medicare each time they prescribe electronically, and later cut payments each time they don’t.

With broad support in Congress and from the administration, the legislation has a good chance of becoming law this year, analysts say.

The American Medical Association, the nation’s largest physician group, says it opposes penalties for handwriting prescriptions.

“As these programs improve more people are going to be using them, but to force people to use them now I think is a mistake,” said Dr. Joseph Heyman, AMA’s chairman-elect.

While electronic prescribing makes sense for doctors just starting out, Heyman said, the software can be cumbersome for doctors transferring from a paper system.

The software-is-hard complaint is familiar, say champions of electronic prescribing.

In the late 80s, most doctors billed insurance companies using paper submissions, much to the frustration of executives looking to reduce costs. Prodded by the insurance industry, Medicare began rewarding doctors for filing electronically, and more doctors eventually used the technology.

Regardless of what Beltway bureaucrats do, MySpace-fluent medical students may be the biggest pusher of a new drug-prescribing culture.

Electronic prescribing is standard at urban hospitals where most medical students are trained.

“As soon as they arrive on the ward we teach them how to send prescriptions and review results via computer,” said University of Washington’s Dr. Thomas Payne, who oversees technology at the medical school. “To be honest, we don’t spend much time on it because they pick it up so quickly.”