E-prescribing savings will offset $19B

The health IT adoption incentives in the stimulus legislation will double the future rate of e-prescribing and result in a $22 billion reduction in drug and medical costs over the next decade

, according to a study commissioned by the Pharmaceutical Care Management Association. If the study’s authors at consulting firm Visante are correct, the e-prescribing savings alone will more than pay for the $19 billion in adoption incentives and other health IT promotion activities required under the stimulus law.

By 2014, more than three-quarters of prescribers will be using e-prescribing, the study found. That is double the number anticipated after passage of the Medicare Improvements for Patients and Providers Act of 2008, which gives Medicare health care providers incentives for e-prescribing. Today, fewer than 15 percent of prescribers use e-prescribing, according to Visante’s report.

The report said e-prescribing saves money in four ways:

  • Informs doctors at the point of prescribing about the cost and the clinical characteristics of medications that could be prescribed, letting doctors choose the best and most affordable drugs, including more generics.
  • Gives doctors the patient’s medication history, so that harmful drug-drug interactions and duplicate prescriptions can be avoided.
  • Notifies doctors of pharmacy options, including mail-order and retail drug stores, to help them hold down patients’ out-of-pocket costs.
  • Transmits the prescription to the pharmacy electronically, reducing waiting times and errors associated with poor handwriting.

Besides cutting the federal government’s costs by $22 billion, the report said all health care payers will save a total of $56.2 billion under the stimulus law, officially titled the American Recovery and Reinvestment Act of 2009 (ARRA).ARRA’s effect on health IT adoption also will prevent 3.5 million adverse drug effects on patients and 585,000 hospitalizations stemming from the adverse drug effects, the report said.

Although incentives under ARRA will not totally offset providers’ outlays for e-health records acquisition, the report predicted that “pay-for-performance measures implemented by the private sector will likely provide further financial inducement for providers to adopt the technology.”

Original article by: Nancy Ferris


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