Electronic Prescribing Reduces Health Costs!

February 26, 2010 in Health Care "Reform", Health Policy by RangelMD

Electronic medical prescribing utilizes an office based electronic medical records system to send prescriptions directly to a pharmacy. It has been shown to dramatically reduce errors and in theory it can improve efficiency and convenience for the patient. And, yes, it can reduce health care costs. A 2008 study from researchers at Brigham and Women’s Hospital and Massachusetts General Hospital in Boston found that an electronic system that is set up to allow physicians to choose lower cost or generic equivalent medications from various formulary lists can save almost a million Dollars a year per 100,000 patients.

Doctors using e-prescribing with formulary decision support, which accounted for more than 200,000 filled prescriptions in the study, increased their use of generic prescriptions by 3.3 percent, study authors found. These changes were above and beyond increasing use of generics that was occurring among all doctors and the already high rate of generic drug use in Massachusetts . . Based on average costs for private insurers, study authors estimated that the use of e-prescribing could save $845,000 per 100,000 patients per year and generate even higher savings with greater use.

And this was only with a seemingly small increase of 3.3% in the use of generic medications in an area that already uses a ton of generic medications (the liberal intellectual northeastern establishment appears to be less susceptible than the rest of the nation to the bright, shinny colors of newer brand name medications that are heavily promoted by the pharmaceutical industry).The authors noted that e-prescribing was only used about 20% of the time so these number estimates are very conservative.

There are several hundred million patients in this country with some time of government or private health insurance plan and so much greater adoption of EMRs and use of e-prescribing with the ability to interface with drug formularies could reduce overall prescription usage by tens of Billions of Dollars!

You would think that the Federal government and private  health insurance companies are rushing to help physicians adopt EMRs and e-prescribing but you’d be wrong. Right now, private insurance companies use the rather low tech, caveman method of throwing up bureaucratic barriers in the form of requiring “prior authorizations” to force physicians and patients to use cheaper alternative medications by making it as inconvenient and ineffective as possible to get brand name meds.The drug formulary with its various cost tiers is an understandable concept but the use of which is often impractical. Patient’s almost always defer to their physicians as to what medications to take and busy physicians usually defer to whatever medication they are most familiar with prescribing rather then take 5-15 mins to find a formulary and look up a certain medication.

An EMR that instantly gives the physician lower cost alternatives based on a formulary that is tied into the patient’s listed insurance would make this process far easier and increase compliance. This is exactly what this study showed but the idea of cooperating with or even financially assisting physicians in getting set up with e-prescribing must be a totally foreign concept to private health insurance companies. But then again, spending short term money to increase long term savings is not a concept that is endemic to American businesses.

For its part, the Federal government appears to be too plagued by special interests (i.e.the pharmaceutical industry a la the disaster that is Medicare Part D) and bureaucracy to properly and promptly act on the proven safety and cost reduction benefits of electronic prescribing. The paltry $44,000 promised to physicians who convert to EMR systems is the government’s idea of a joke since payment comes only after several years and a ton of bureaucratic hassles. If there were only some way for physicians to tell the Federal government that they are too big to fail!

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