e-prescribingFor several years, health care industry experts have urged physicians to adopt electronic prescribing, to improve quality and contain health care costs.  Nevertheless, adoption of e-prescribing technology lags; in 2005, the U.S. Dept. of Health and Human Services estimated that fewer than 18% of physicians used the technology [1]. Are physicians not sold on the benefits of e-prescribing? If physicians do believe that e-prescribing is beneficial, what accounts for the low rate of adoption?

Benefits of e-prescribing

  • Quality: The Institute of Medicine’s 2006 study of medication errors found that annually, 1.5 billion people are harmed by medication errors, and the extra cost of treating drug-related errors amounted to $3.5 billion a year. To address these problems, the IOM urged improvements in patient education and in drug naming, labeling and packaging. The IOM also found that paper-based prescribing was error-prone, due to problems in handwriting legibility and the absence of decision-support tools. Therefore, the IOM recommended that by 2010 all physicians should be able to write prescriptions electronically, and all pharmacies should be able to process electronic prescriptions.
  • Efficiency: When a pharmacist can’t read the physician’s handwriting, the pharmacist must call the doctor’s office to clarify, wasting time for the practice, the pharmacy and the patient. By some estimates [2], callbacks are required 30% of the time. Health plans promote e-prescribing, because it saves them money through increased use of generics and formulary drugs. The Henry Ford Health System’s Health Alliance Plan estimates that it saves over $3 million per year through its e-prescribing program, dwarfing the cost of paying $1,000 for each physician participating in the program.


  • Cost: While a stand-alone e-prescribing system may start at around $500, the cost escalates to $2,500 and more for integration with practice management software and clinical decision support [4]. While some payors offer financial incentives for adoption of e-prescribing, health plans garner greater financial returns through e-prescribing than does the physician practice. The potential for cost savings has attracted attention from the federal government as well as commercial payors. Legislation was introduced in December 2007 that would require physicians participating in Medicare to adopt e-prescribing. The Medicare Electronic Medication and Safety Protection Act, H.R. 4296, uses a carrot-and-stick approach to spur adoption. The bill provides for a one-time payment to physicians adopting e-prescribing ($2,000 for physicians implementing e-prescribing in 2008 or 2009, down to $1,000 for physicians adopting in 2012 or later), and a 1% add-on for each prescription written electronically. The “stick” portion applies to physicians who have not started e-prescribing by January 2011, and would reduce the physician’s fee schedule by 10%.
  • Prohibition on use of e-prescribing for controlled substances: Currently, regulations of the Drug Enforcement Administration require a written prescription for schedule II controlled substances. In testimony before the Senate Judiciary Committee in December 2007, the DEA Deputy Assistant Administrator explained that DEA cannot discharge its responsibilities for criminal prosecution of drug diversion without the reliable evidence provided by the signature requirement for written prescriptions. The DEA is developing regulations that would permit electronic prescribing, provided that strict standards are maintained for authentication, nonrepudiation and record integrity.
  • Technical limitations: A study last April by the Center for Studying Health System Change reported that physicians found that commercial e-prescribing systems lacked advanced features, or were difficult to implement. Criticisms of existing systems included lack of access to information on medications prescribed by physicians outside the practice; pop-up alerts that were triggered too easily (and therefore were overridden by physicians); difficulty in obtaining accurate patient-specific formulary information; and limited connectivity with pharmacies and pharmacy benefit managers.


While electronic prescribing offers great promise, several factors hinder universal physician adoption in the current state of development.


[1] E-Prescribing and the Medicare Prescription Drug Program, proposed rule, 70 Fed. Reg. 6256 (Feb. 4, 2005), cited in testimony of the Director of the Office of E-Health Standards and Services, Centers for Medicare and Medicaid Services, before the Senate Judiciary Committee on Dec. 4, 2007.

[2] Ibid.

[3] The Riches of E-Prescribing, published at www.modernhealthcare.com on February 18, 2008.

[4] Source: MGMA Connexion, Jan. 2006.

Patricia KingAbout the Author

Patricia King is a health care attorney in Illinois, and principal of the web-based business Digital Age Healthcare LLC (www.digitalagemd.com).

Topics #e-prescribing #electronic medical records #emr