Getting Paid to e-Prescribe

Kathryn Mackenzie, for HealthLeaders Media, August 5, 2008

For years, just about everybody involved in healthcare has been touting the benefits of electronic prescribing. From the government to health plans to medical associations, we've heard again and again how the technology will improve patient safety and prevent medication errors, all while saving money by increasing the use of generic drugs and avoiding duplicated prescriptions.

Despite that, doctors have been glacially slow in making the switch (the United States Department of Health and Human Services estimates only about 10% of U.S. doctors use e-prescribing; other estimates put the adoption rate even lower).

Now some of the proponents of e-prescribing are putting money where their mouths are by offering financial incentives to physicians who switch from pad and paper to keyboard and monitor. Beginning Jan. 1, 2009 and continuing throughout 2010, Medicare will give doctors an additional 2% bonus on top of their fee for e-prescribing. In 2011 and 2012, the bonus will drop to 1%, and in 2013, the bonus will drop again to 0.5%. And, for those who need even more motivation, Congress put in place financial penalties for physicians who decline to use e-prescribing, dropping their Medicare reimbursements by 1% in 2012, 1.5% in 2013, and 2% in 2014. Some exceptions will be allowed for hardship cases. Medicare expects to save up to $156 million over the life of the e-prescribing program in fewer adverse drug events, Health and Human Services Secretary Michael Leavitt said during a press conference to introduce the plan.

Just after federal officials made their announcement, Blue Cross Blue Shield of North Carolina said they too would offer an incentive to doctors who use the technology. The one-time, $1,000 incentive will go to network providers who access the medication history for 20 individual patients through a certified vendor between Oct. 1 and Dec. 31 of this year. The insurer also launched an e-prescribing Web site to "improve patient safety, control costs, and reduce medication errors." The Web site offers physicians hardware and software information, as well as discounts for implementing an electronic prescription practice.

Blue Cross Blue Shield estimates that e-prescribing can produce savings of about $250 per doctor per month, again through the increased use of generics and avoidance of unnecessary prescriptions.

So, will all of these efforts have a "profound effect on the adoption and use of e-prescribing," as Leavitt said he expects? Senator John Kerry and former Speaker of the House Newt Gingrich certainly think so. Last Friday in an opinion piece they co-wrote for the Mercury News, Kerry and Gingrich said that by helping pay for the technology, the new legislation addresses the biggest impediment to adoption of e-prescribing technology: cost. "So with the right balance of financial incentives, physicians can and will adopt this life- and money-saving technology. We expect this law to start a wave of adoption, leading to the use of more sophisticated technology," they wrote.

I, for one, love the idea of not having to drop off and then wait around for my prescription at the pharmacy. And, while I agree that money is generally a terrific motivator, what if the cost—an estimated $3,000 per prescribing doctor—of buying and installing this technology is not truly the main barrier that is keeping doctors from switching over? Old habits die hard after all, and it takes considerable time and effort to learn new computer programs. Meanwhile, those prescription pads seem pretty easy to use and it only takes seconds to illegibly scrawl out a patient's name and medication.

Kathryn Mackenzie is technology editor of HealthLeaders magazine. She can be reached at

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