[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]
ELECTRONIC PRESCRIBING
=======================================================================
HEARING
before the
SUBCOMMITTEE ON HEALTH
of the
COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTH CONGRESS
SECOND SESSION
__________
JULY 22, 2004
__________
Serial No. 108-56
__________
Printed for the use of the Committee on Ways and Means
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COMMITTEE ON WAYS AND MEANS
BILL THOMAS, California, Chairman
PHILIP M. CRANE, Illinois CHARLES B. RANGEL, New York
E. CLAY SHAW, JR., Florida FORTNEY PETE STARK, California
NANCY L. JOHNSON, Connecticut ROBERT T. MATSUI, California
AMO HOUGHTON, New York SANDER M. LEVIN, Michigan
WALLY HERGER, California BENJAMIN L. CARDIN, Maryland
JIM MCCRERY, Louisiana JIM MCDERMOTT, Washington
DAVE CAMP, Michigan GERALD D. KLECZKA, Wisconsin
JIM RAMSTAD, Minnesota JOHN LEWIS, Georgia
JIM NUSSLE, Iowa RICHARD E. NEAL, Massachusetts
SAM JOHNSON, Texas MICHAEL R. MCNULTY, New York
JENNIFER DUNN, Washington WILLIAM J. JEFFERSON, Louisiana
MAC COLLINS, Georgia JOHN S. TANNER, Tennessee
ROB PORTMAN, Ohio XAVIER BECERRA, California
PHIL ENGLISH, Pennsylvania LLOYD DOGGETT, Texas
J.D. HAYWORTH, Arizona EARL POMEROY, North Dakota
JERRY WELLER, Illinois MAX SANDLIN, Texas
KENNY C. HULSHOF, Missouri STEPHANIE TUBBS JONES, Ohio
SCOTT MCINNIS, Colorado
RON LEWIS, Kentucky
MARK FOLEY, Florida
KEVIN BRADY, Texas
PAUL RYAN, Wisconsin
ERIC CANTOR, Virginia
Allison H. Giles, Chief of Staff
Janice Mays, Minority Chief Counsel
______
SUBCOMMITTEE ON HEALTH
NANCY L. JOHNSON, Connecticut, Chairman
JIM MCCRERY, Louisiana FORTNEY PETE STARK, California
PHILIP M. CRANE, Illinois GERALD D. KLECZKA, Wisconsin
SAM JOHNSON, Texas JOHN LEWIS, Georgia
DAVE CAMP, Michigan JIM MCDERMOTT, Washington
JIM RAMSTAD, Minnesota LLOYD DOGGETT, Texas
PHIL ENGLISH, Pennsylvania
JENNIFER DUNN, Washington
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
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C O N T E N T S
__________
Page
Advisories announcing the hearing................................ 2
WITNESSES
Brigham and Women's Center for Applied Medical Information
Systems, Jonathan M. Teich..................................... 20
National Association of Chain Drug Stores, Craig L. Fuller....... 10
RxHub, David McLean.............................................. 7
Women's Health Center Cardiology, Thomas E. Sullivan............. 16
SUBMISSIONS FOR THE RECORD
American College of Physicians, statement and attachment......... 36
America's Health Insurance Plans, statement...................... 41
American Osteopathic Association, statement...................... 44
Wellinx, Saint Louis, MO, Tom Doerr, statement and attachment.... 45
ELECTRONIC PRESCRIBING
----------
THURSDAY, JULY 22, 2004
U.S. House of Representatives,
Committee on Ways and Means,
Subcommittee on Health,
Washington, DC.
The Subcommittee met, pursuant to notice, at 1:20 p.m., in
room B-318, Rayburn House Office Building, Hon. Nancy L.
Johnson (Chairman of the Subcommittee) presiding.
[The advisories of July 15, 2004 and July 16, 2004
announcing the hearing follow:]
ADVISORY FROM THE COMMITTEE ON WAYS AND MEANS
SUBCOMMITTEE ON HEALTH
CONTACT: (202) 225-3943
FOR IMMEDIATE RELEASE
July 15, 2004
HL-10
Johnson Announces Hearing on
Electronic Prescribing
Congresswoman Nancy L. Johnson (R-CT), Chairman, Subcommittee on
Health of the Committee on Ways and Means, today announced that the
Subcommittee will hold a hearing on electronic prescribing. The hearing
will take place on Thursday, July 22, 2004, in the main Committee
hearing room, 1100 Longworth House Office Building, beginning at 1:00
p.m.
In view of the limited time available to hear witnesses, oral
testimony at this hearing will be from invited witnesses only.
Witnesses will include representatives from private sector entities to
discuss the adoption of electronic prescribing technology and its
ability to reduce costs and improve patient outcomes. However, any
individual or organization not scheduled for an oral appearance may
submit a written statement for consideration by the Committee and for
inclusion in the printed record of the hearing.
BACKGROUND:
Electronic prescribing (``e-prescribing''), like other types of
health information technology, has the ability to reduce medication
errors and costs, and improve health quality and outcomes.
Data transaction standards are already under development in the
private marketplace and public sector to fill the gaps in existing e-
prescribing standards and to enable the delivery of patient information
to physicians at the point of care. In addition, technology already
exists for e-prescribing, and some in the private sector are realizing
its benefits. But the standards are not uniform, and widespread
adoption of this technology has been fractured and limited.
The Medicare Modernization Act (MMA) (P.L. 108-173) requires the
Secretary of the U.S. Department of Health and Human Services to
develop uniform e-prescribing standards for the Medicare program in
conjunction with physicians, hospitals, pharmacies and pharmacists,
Pharmacy Benefit Managers, and State boards of pharmacy and medicine.
Initial standards which are due in September 2005, would be pilot-
tested in 2006. Lessons learned from the successes and failures
associated with this testing would be incorporated into final uniform
standards beginning in 2008.
The MMA also includes grants to physicians to facilitate the
adoption of e-prescribing for Medicare beneficiaries. A safe harbor
under the anti-kickback statutes was created by the law to allow plans
to purchase hardware and software and to provide technical assistance
and education to participating physicians who adopt e-prescribing.
In announcing the hearing, Chairman Johnson stated, ``E-prescribing
can improve heath care quality, reduce medical errors, and curb costs.
This technology is a critical first step towards the adoption of
information technology throughout the health care profession. Medicare
can both learn from the private sector and lead the way in this area by
encouraging greater use of e-prescribing technology.''
FOCUS OF THE HEARING:
The hearing will examine the experiences of the private sector in
adopting standards and technology for e-prescribing, and the potential
of e-prescribing to reduce costs and improve health outcomes.
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* * * NOTICE--CHANGE IN LOCATION * * *
ADVISORY FROM THE COMMITTEE ON WAYS AND MEANS
SUBCOMMITTEE ON HEALTH
CONTACT: (202) 225-1721
FOR IMMEDIATE RELEASE
July 16, 2004
HL-10
Change in Location for Hearing on
Electronic Prescribing
Congresswoman Nancy L. Johnson (R-CT), Chairman, Subcommittee on
Health of the Committee on Ways and Means, today announced that the
Subcommittee hearing on electronic prescribing, previously scheduled
for Thursday, July 22, 2004, at 1:00 p.m., in room 1100 Longworth House
Office Building, will now be held in room B-318 Rayburn House Office
Building.
All other details for the hearing remain the same. (See Health
Advisory No. HL-10, dated July 15, 2004.)
Chairman JOHNSON. Good afternoon, and welcome to you all.
My apologies for this hearing starting a little late. I am
pleased to chair the second of two hearings that we have held
on increasing the use of information technology (IT) in the
health sector. Today we look specifically at one element of
technology in health care: electronic prescribing (e-
prescribing). Like other health IT, e-prescribing has the
ability to reduce medical errors, improve health outcomes, and
reduce costs. This technology is a critical first step toward
greater use of IT throughout the health care professions.
The technology exists to make e-prescribing widespread, and
pharmacists are already capable of handling electronic
prescriptions. Some health providers are undertaking
investments to implement e-prescribing technology, but
widespread adoption has been slow. Our goal today at this
hearing is to learn more about what the private sector is doing
to advance e-prescribing and to understand how we can encourage
more rapid implementation of this important technology.
We took some important strides in the Medicare Prescription
Drug, Improvement and Modernization Act of 2003 (MMA) (P.L.
108-173) to promote widespread adoption of e-prescribing. The
MMA requires the Secretary of the U.S. Department of Health and
Human Services (HHS) to promulgate standards for e-prescribing
to encourage the use of the technology in the Medicare
prescription drug program. The Secretary must develop these
standards in conjunction with physicians, hospitals, pharmacies
and pharmacists, pharmacy benefit managers (PBMs), and State
Boards of Pharmacy and Medicine. Initial standards are due in
September of 2005 and will be pilot-tested in 2006. Lessons
learned from the successes and failures associated with this
testing will be incorporated into final uniform standards in
2008.
I am extremely pleased that HHS announced yesterday that it
would accelerate development of these standards so that when
prescription drugs are available for the first time for our
seniors under Medicare, so would e-prescribing. It is very,
very exciting to me how aggressively our HHS Secretary Tommy
Thompson has pushed forward the information management
technology into health care, and, indeed, he has set very
accelerated timetables, far more aggressive than the final bill
contained, but not as aggressive as the original House bill,
because we do feel very, very strongly about the moral
obligation of society to provide electronic e-prescribing at
the same time we enable the seniors to use so many more drugs
and to change the role of medicine in the lives of many of our
seniors.
Our witnesses today will provide us with an overview of the
steps being taken by the private sector to advance the use of
e-prescribing. First we will hear from David McLean, Chief
Executive Officer (CEO) of RxHub. RxHub is making e-prescribing
a reality by creating a standardized communications framework
that links pharmacies, prescribers, PBMs, and benefit plans to
enable electronic sharing of information. I look forward to
hearing about how RxHub is developing this framework, making it
accessible in doctors' offices, small pharmacies, health care
providers throughout the country.
Next we will hear from Craig Fuller, President and CEO of
the National Association of Chain Drug Stores (NACDS). Through
the founding of SureScripts, an electronic network that
establishes two-way communications between pharmacists and
physicians, NACDS has taken a leadership role in promoting
greater use of e-prescribing. We will then hear from a
physician who is actively using e-prescribing today. Dr. Thomas
Sullivan is a solo practitioner of cardiology who currently
processes 95 percent of his prescriptions electronically. I
look forward to hearing his perspective on the benefits of e-
prescribing and the difference it has made in his practice, in
part because the most difficult step in implementing e-
prescribing nationwide is going to be to get it in practices of
the sort that you represent here today at the table.
Finally, we will hear from Dr. Jonathan Teich of Harvard
Medical School. Dr. Teich has written extensively on the use of
e-prescribing, and I look forward to his testimony as he
provides us with an overview of the benefits of e-prescribing
and ideas as to how to promote the greater use of this
technology.
As I stated at our last hearing, these are exciting times
and interesting times in IT, both in the health care sector and
the IT sector, and particularly as they are going to come
together in the health care sector in the next decade. I view
e-prescribing as an important first step toward the creation of
a more robust health IT infrastructure in this country. I look
forward to working with all of you as we move forward to
improve the safety and quality of our health care system while
reducing costs for practitioners, payers, consumers, and
taxpayers. I thank you, and Mr. Stark, I would like to invite
you to make your opening statement.
Mr. STARK. Madam Chairman, thank you for this hearing, the
second one in 5 weeks where we have talked about advances in
health care IT. I have heard that we could save $27 billion if
we got this thing all hooked up. I am pleased to hear that we
are going to move from 2008 to 2007, but that is an area in
which I am not sure I would like to bet much money. I think we
could all agree on the benefits, and we can probably all agree
on the impediments to seeing this done.
I can remember well over 30 years ago when Visa and
Mastercharge were implemented, and that was pretty easy because
you couldn't collect money if you didn't play by the rules. So,
that was all the incentive you needed. You either follow the
rules or you don't get paid. That was pretty easy. I am going
to suggest that. I think what we are going to come down to is
the basic philosophic difference between you and me, Madam
Chair, and that is that I would do this the same way you
changed the accounting rules the other day, by saying what we
are going to let you deduct or expense regarding options. Now,
I learned differently when I studied accounting, but we changed
the rules. So, if you just dropped your gavel and said, dammit,
next year under Medicare, under the prescription drug bill,
under Medicaid, nobody gets paid unless they follow a protocol
which we established, then it would get done. It won't be done
right. We would have to come back and change it. It will be
done just as right as waiting for six different people to
figure out how they are going to do it voluntarily and argue
about whose plan can talk to the other person's plan.
I really do believe that this is an area in which a little
government regulation would get it going. We would have to
change it. I make no bones about that. It could get started,
and we would have to pay something in extra costs out of the
government. I think we would save it in the long run, and I
hope that the witnesses and those of us who inquire today can
suggest that as an alternative: can we just make the process
get started by dropping the gavel and saying, ``Let's do it''?
I really have a hunch we would save 5 years and a lot of time
to get to the place where I know our witnesses want to be, I
know you want to be, we want to be. I am just suggesting how to
get there.
Chairman JOHNSON. Well, we may not be as far apart as you
think, Mr. Stark.
Mr. STARK. That is great.
Chairman JOHNSON. I think the purpose of this hearing is--
the pace of change in the private sector has accelerated
dramatically in the last year--to learn what has happened and
where the holes are and where we most need to work. You and I
both recall that we encouraged the private sector to submit
their bills electronically, and then we paid them more if they
did and we paid them less if they didn't. So, we have some
experience with encouraging.
I am pleased that the Secretary has taken very seriously
this issue of setting standards so that what we will develop is
an interoperable system. Those standards will be out and
available in the very near future. I have forgotten whether it
is 2 or 3 months. That will certainly be a platform from which
we can all assume certain actions and require certain actions.
It is a process.
Today we are here explicitly to understand more
specifically how much we have accomplished, how many doctors
are capable, how many small pharmacists are capable, what does
it cost, what are the benefits. So, Mr. McLean, I welcome you
start this panel, and I thank you, Mr. Stark, for your comments
because it is of the utmost importance that we accomplish this
goal as a national system.
STATEMENT OF DAVID McLEAN, CHIEF EXECUTIVE OFFICER, RXHUB
Mr. McLEAN. Good afternoon, Madam Chairman and Members of
the Subcommittee. I am David McLean. I am the CEO of RxHub, and
I want to thank you all for the opportunity to present to you
today. RxHub is a health care technology company that has
developed a nationwide electronic information exchange to
enable the routing of prescription and benefit information
among connecting prescribers, pharmacies, and PBM. RxHub hopes
to connect all key groups involved with writing, dispensing,
and paying for prescription medications and has designed its
network as a user-neutral platform utilizing a public standard
development process and neutral open architecture.
We were founded in 2001 by the then three largest PBMs--
Advance Prescription Card Services (PCS), Express Scripts, and
Medco Health Solutions. Earlier this year, Caremark Rx
purchased Advance PCS and has now taken their seat on our
board. RxHub's original mission--and it continues to be the
same--was to build the electronic framework that would become a
secure standardized communication channel throughout the
prescription writing and delivery and payment process. For such
a system to effectively meet its twin goals of reducing costs
and improving patient safety, all parties in the delivery chain
must be efficiently connected, including physicians,
pharmacies, technology providers, PBMs, and health plans.
RxHub has developed and implemented a technology called a
Master Patient Index which can very accurately identify
particular patients without the need for a national patient
identifier or a centralized database, which was a major
breakthrough not only for RxHub but we believe for the
industry.
Through an open public process, RxHub developed standards
that did not exist to implement its cutting-edge technology to
route what we call the front-end information, including
eligibility, benefits, formulary, and patient medication
history. RxHub has since become the Nation's leader in the
electronic exchange of prescription information, and we
continue to expand our network to enable the acceleration and
adoption of e-prescribing and ultimately moving to electronic
health records, which we all are envisioning. The benefits of
such national, systemwide, interoperable communications are
significant and are expected to have a dramatic impact on
reducing health care costs, creating system efficiencies, and
enabling better patient outcomes.
As exciting as this new technology is, significant hurdles
remain before the Nation can achieve a health care system that
rivals our electronic banking system. I can confidently report
to you that the single most important advancement in making the
interoperable health systems a reality was the e-prescribing
provision in the MMA. On behalf of RxHub and our founders, I
would like to thank you particularly, Congresswoman Johnson,
and the Committee and your dedicated staff on your leadership
and commitment to this legislation.
The MMA created a comprehensive electronic prescription
program for Medicare beneficiaries whose providers and/or
pharmacists participate, whether that is voluntarily or through
contractual requirements of a chronic care program or health
plan. The MMA expanded e-prescribing to require real-time
electronic delivery to providers and pharmacists of certain
patient-specific information related to eligibility, benefits,
drug interactions, warnings, dosage adjustments, medication
history, and the availability of generics. This information
must be delivered in a secure format that complies with health
privacy regulations. As technology has developed and become
available for use, there have been several impediments to
widespread adoption of e-prescribing systems. Some of these
impediments were addressed specifically in the MMA, and others
remain formidable challenges.
By far the greatest barrier for technology developers has
been the lack of comprehensive uniform national standards under
which this interoperable system approach could be developed and
instituted. Physicians, pharmacies, and others in the health
care delivery industry have been hesitant to invest in systems
that may not meet certain State laws or pharmacy board
regulations or may become obsolete like the infamous Beta video
tapes when standards evolve on a piecemeal basis. In fact, some
States previously prohibited usage of available e-prescribing
systems. The MMA requires HHS to promulgate standards that are
universally interoperable and federally preemptive and
establishes aggressive deadlines to require conformity by all
users. Preemption is probably one of the most important
requirements for a national electronic system of any kind.
Trying to conform to a patchwork of State laws over an
electronic, sometimes wireless, system results in significant
business uncertainty and obviously diminished efficiencies and
cost savings.
Another major barrier to e-prescribing and other electronic
health systems has been the lack of provider adoption. The
standards necessary to meet the requirements under the MMA are
not limited simply to data code sets. They must provide the
necessary decision support tools and operational protocols that
are essential to integrating electronic systems seamlessly into
a physician's workflow. Along with the inclusive regulatory
requirements, the MMA expands the anti-kickback and start safe
harbor provisions to permit plans to provide hardware and
software to participating providers and pharmacies to encourage
adoption. The MMA also authorizes grant funding for physicians
and other providers to take further advantage of available
systems.
Presently, the National Committee on Vital Health
Statistics (NCVHS) has underway a series of hearings to gather
information from key stakeholders, as required by the MMA, in
order to develop recommendations identifying the appropriate
standards and protocols for the entire Medicare e-prescribing
system. Under the MMA, these standards must recognize to the
maximum extent possible current industry-developed standards.
Because the most current and comprehensive source of medication
history now resides with the benefit administrator, such as a
PBM or a health plan, RxHub's network can route such
information in a secure, concise, and user-friendly format to
providers at the point of care in less than 3 seconds. This is
especially important to the health and well-being of obviously
our senior population, who frequently visit multiple providers,
multiple pharmacies, and obviously take multiple medications.
RxHub's network provides similar access to formulary
information in real time at the point of care, which is
essential to cost savings and patient safety in the Medicare
program and the larger health care system in general.
RxHub has connected, through its PBM participants, over 80
percent of the commercially insured lives in the United States.
The same can be achieved for the Medicare population to enable
the routing of both cost-saving and life-saving information to
patients and their health care providers. Consequently, RxHub
has provided information to the NCVHS and to HHS and will
continue to work diligently to support their efforts under the
MMA.
The technology to implement e-prescribing exists today and
the benefits, particularly safety, compliance, cost savings,
can be achieved in the near term if there is a commitment of
the key players and a deployment of resources to get the job
done. RxHub and its PBM founders are fully supportive of the e-
prescribing effort, including formulation of appropriate
standards. RxHub stands ready to provide the connectivity and
information exchange among providers and payers in order to
achieve the e-prescribing as envisioned in the MMA as soon as
the standards are finalized. We encourage the HHS to continue
to work diligently to meet or beat the deadlines established in
the MMA.
Because the system also must permit the electronic exchange
of U.S. Food and Drug Administration (FDA) drug labeling and
listing information and will require the future electronic
delivery of patient medical history related to the drug on the
same standardized system, the national e-prescribing program
created for Medicare beneficiaries in the MMA provides the
immediate foundation for an electronic system by which patient
electronic medical records can be created, maintained, and
communicated securely, efficiently, and accurately.
We encourage this Committee to continue its oversight
effort of the standard-setting process now underway at HHS.
Effective and aggressive implementation by providers and payers
of the e-prescribing provisions of the bill is the single most
important action that can be taken to improve health care in
America in the near term and reduce costs to the Medicare
prescription drug program. In conjunction with the
establishment of standards, it would be very beneficial for the
Centers for Medicare and Medicaid Services (CMS) to clearly
define the requirement that e-prescribing be used in the
Medicare program in order to achieve the greatest cost savings
and health benefits of this health safety tool. Rapid adoption
within Medicare will lead to a new standard of care throughout
the health system that will result in significant savings to
consumers, providers, and payers and will improve quality
outcomes.
This is an incredibly dynamic and exciting time in the
health care technology industry. It is imperative that the
physician-patient relationship be preserved. RxHub's ability to
enable informed prescriptions at the point of care in real time
can have an immediate and significant impact to improve patient
safety and reduce overall health care costs. Thank you for the
opportunity to offer this testimony today. I would be happy to
answer questions that you may have.
Chairman JOHNSON. Thank you very much, Mr. McLean. Mr.
Fuller?
STATEMENT OF CRAIG L. FULLER, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, NATIONAL ASSOCIATION OF CHAIN DRUG STORES, ALEXANDRIA,
VIRGINIA
Mr. FULLER. Thank you, Madam Chairman. First, I am Craig
Fuller. I am the President and CEO of the NACDS. We have
submitted a statement for the record, but I would like to make
just some informal comments. I am also the Co-Chairman of
SureScripts. SureScripts was formed 3 years ago, working with
the National Community Pharmacists Association. I Co-Chair
SureScripts along with the head of that association. Together,
we reach out to all 55,000 pharmacies, both chain pharmacies as
well as independent pharmacies, with this e-prescribing
platform. We in chain pharmacy fill about 70 percent of the
three billion scripts. We at NACDS have been very committed to
e-prescribing for some time, and we really do commend your
work, Madam Chairman, and the work of the Committee, the entire
Committee, in negotiating and inserting into the MMA the
provisions on e-prescribing because we think it is very
important.
I think your comment that this is a robust first step is an
important concept because I think as much as all of us want to
see many of the features that I also would commend Secretary
Thompson for discussing yesterday, you have to start somewhere.
We are very close, as I think we can tell you today, to really
giving you the way to jump-start electronic medical records and
many other technological advantages that we all would like to
see in health care.
The challenge is great. Indecipherable, unclear scripts
today lead to 150 million phone calls a year from pharmacists
to doctors. It is estimated that 900 million calls were made to
clarify the prescription from the pharmacist to the doctor, 500
million calls on refill authorizations, and that is today where
3.1 billion prescriptions are filled each year. We are going to
4 billion prescriptions in 2006.
You have heard before, I know, about how e-prescribing can
help reduce or eliminate errors, can improve patient compliance
with medication, create a clear record on prescriptions, and it
also provides--and some people do not talk a lot about this,
but a very reliable authentication of who the prescriber
actually was so that you can get at some of the issues of drug
abuse that we face today.
We looked at this about 3 years ago and came to the obvious
conclusion that if you are going to successfully increase the
rate at which e-prescribing was adopted, you had to do the
obvious. You had to find a way to connect physicians and
pharmacists. Physicians write the prescriptions, and they go to
the pharmacy to get filled. We wanted a platform--and that is
how SureScripts was created--that would connect all 55,000 of
those retail establishments, those stores. Mr. Stark, you are
quite right: one of the impediments to this is getting systems
to talk to each other. What SureScripts does is allow those
55,000 stores with different managements and different
companies to literally connect to one place where, on the other
side of the equation, physician systems, different physician
systems, can be connected.
We have set up standards, and I will tell you right now, I
want to associate myself with the very fine statement that Mr.
McLean made about the important need for standards. We work
very closely today with SureScripts on issues related to
standards. We have physician systems that are now certified by
SureScripts to send prescriptions from the physician through
SureScripts to the pharmacy. Those same physician systems are
also connected to RxHub because the information that RxHub is
making available is very valuable in this system.
I think one of the things that sometimes frustrates us is
that the marketplace does not realize today the extent of
collaboration that is going on between these two enterprises to
make sure that patients and physicians and pharmacists and PBMs
are all working together to deliver that script efficiently and
effectively to the pharmacy--or, by the way, to the mail-order
pharmacy.
You know, we have made great progress, and I think that is
the message I really want to bring today. We have today 65
percent of retail pharmacies participating, certified to
participate in SureScripts. By the end of the year, we will
have 75 percent of the Nation's 55,000 pharmacies. We have
physician systems that you are going to hear about in a
minute--you are going to hear about one of them in a minute
from a doctor who is actually using it. We have these systems
that they themselves connect today to about 50,000 physicians,
and by the end of the year we believe we will have more of
these physician systems connected to SureScripts so that we can
have 75,000 or more physicians that have the capability of
engaging in e-prescribing.
Madam Chairman, you identified the largest problem to the
progress that we all hope to make, and that is the more rapid
adoption of these systems by physicians. There is a reason why
that adoption is slower. For nearly two--in fact, for over two
decades, retail pharmacies, PBMs, payers have been connected
electronically. Pharmacies have been automated for two decades.
It does not mean they all have the e-prescribing capability,
but they have used automation. We have worked with PBMs and
payers to move information very effectively through the system.
Physicians have not been similarly connected. Small practices
have not had some of these systems in place.
Now, there is an investment. I do not think the investment
is larger. The physicians will address that. The systems now,
with the pharmacy connected, with the connection with PBMs, the
systems now are really ready at a very low price for physicians
to connect. There is real value for the physician. The
physician not only can move the script efficiently; they can
get feedback from the pharmacist.
I was visiting with an asthma doctor who said, you know, an
asthma physician is the most shocked person around when he
finds out he has got a patient in the emergency room. The
patient came in, the patient was diagnosed, the patient got the
proper medication and went on their way. Well, 30 percent of
those patients never pick up their prescription, and today we
just put it back on the shelf because we cannot possibly make
millions of more calls on that issue. With e-prescribing, you
can provide feedback to the physician. So, you really can
improve patient care. You can lower health care costs because
if you keep one asthma patient out of an emergency room, you
have saved a lot of money.
There is a lot to be done, and as I said, I think the most
critical issue here is the setting of standards. It is
something we are working on very carefully. We think we have
experience to contribute and to participate in that, and we are
certainly doing so. I think incentives are important. I think
that physicians have seen too many different mousetraps come
down the line, and they are skeptical in some cases. I think we
can hit a tipping point much more quickly with incentives to
physicians to try this, to use it, and as I say, I believe they
will find that there are some real advantages.
Finally, it is important to remember there are several
hundred thousand physicians in this country, but 30 percent of
our physicians fill 80 percent of the prescriptions. Thirty
percent of the physicians fill 80 percent of the prescriptions.
We are rolling out SureScripts community by community by
community, and in every case, with community programs we are
working with physician groups and organizations to identify
those 30 percent of the high prescribers, and we are going
after them first. Not only is it logical to speed
implementation, it is logical because they and their offices
will get the greatest benefit. I think, again, in terms of
incentives, that is another important feature to recall. My
time has elapsed. Why don't I stop there. I look forward to
answering your questions, and I thank you again for holding
this hearing.
[The prepared statement of Mr. Fuller follows:]
Statement of Craig L. Fuller, President and Chief Executive Officer,
National Association of Chain Drug Stores, Alexandria, Virginia
Madam Chairwoman and Members of the Health Subcommittee, the
National Association of Chain Drug Stores (NACDS) is pleased to submit
this statement for the record regarding electronic prescribing. NACDS
represents more than 200 chain pharmacy companies that operate nearly
32,000 community-based retail pharmacies. Our members are the primary
providers of outpatient prescription drugs in the United States,
dispensing about 70 percent of the 3.1 billion prescriptions that are
provided each year. The chain drug industry has been in the forefront
of using technology to increase efficiency and improve patient care.
Virtually all pharmacy payment claims are adjudicated and paid through
an online, real time, standards-based communications system.
NACDS recognizes and appreciates the leading role that you and the
Subcommittee have played in encouraging the adoption of electronic
prescription connectivity. In particular, we want to thank you for your
efforts last year in including specific language in the Medicare
Modernization Act (MMA) that requires the development of standards for
an electronic prescribing program for Medicare prescriptions. These
efforts will create efficiencies in the delivery of health care, and
provide a safer medication delivery system.
The Benefits of Electronic Prescribing
The current system of handwritten prescriptions and telephone
communications between physicians and pharmacists is inefficient, and
is ripe for technological solutions. Four years ago, the Institute for
Safe Medication Practices (ISMP) published a white paper that urges
health care providers to eliminate handwritten prescriptions.\1\ ISMP
estimates that indecipherable or unclear prescriptions result in more
than 150 million calls from pharmacists to physicians asking for
clarification. Others estimate that pharmacists must call physicians as
much as 900 million times each year to clarify prescriptions, citing
reports that almost 30% of prescriptions required callbacks from
pharmacies.\2\ In addition, each year pharmacies make approximately 500
million phone calls to physicians for authorization to refill
prescriptions. The system becomes even more unwieldy as prescription
volumes continue to grow. Currently, about 3 billion outpatient
prescriptions are written each year, and this number is expected to
rise to 4 billion by 2006.
---------------------------------------------------------------------------
\1\ ISMP, ``A Call to Action: Eliminate Handwritten Prescriptions
Within 3 Years,'' available at http://www.ismp.org/msaarticles/
whitepaper.html.
\2\ Forrester Research, 2002; Medco Health, via ePharmaceuticals
(1/29/03).
---------------------------------------------------------------------------
Since the ISMP white paper was issued, much progress has been made
toward the goal of fostering the adoption of electronic prescribing
systems that are more efficient and safer than handwritten
prescriptions. Paperless prescribing adds new dimensions of safety and
efficiency to current practice. Errors can occur at many points in the
medication prescribing and delivery system; many of these potential
points of error are due to failures in process and communication.
Electronically created and transmitted prescriptions streamline this
process and reduce the potential for failures in communication. ISMP
has recognized that some of the most common medication errors occur
when a prescription is ordered or written by a prescriber, and when a
prescription is entered into the computer system at the pharmacy.
Electronically created and transmitted prescriptions can reduce or
eliminate these errors, especially when prescriptions are transmitted
directly to a pharmacy's computer system.
Beyond efficiency and patient safety, other benefits of electronic
prescriptions include:
Better patient compliance. Electronic prescribing systems
help physicians and pharmacists track whether patients are
appropriately utilizing their prescribed medications. For example,
physicians will know which pharmacy filled a prescription, and whether
the patient has picked up the medication.
Clearer prescription documentation. Pharmacies and
physicians will have a legible electronic record of what has been
prescribed.
Reliable authentication of prescribers. Because
electronic prescriptions are received only through trusted partners or
agents, electronic prescriptions provide pharmacists a higher level of
confidence in the authenticity of prescriptions.
The Federal Government's Role in Fostering Electronic Prescriptions
The federal government has taken the lead in fostering the
development and adoption of electronic prescribing. Electronic
prescribing has existed since the Department of Defense developed its
groundbreaking computer prescription order entry system in the 1980s.
The Department of Health and Human Services has also been at the
forefront of encouraging the development of electronic prescribing
systems. For example, at an April 2002 press conference attended by
Secretary of Health and Human Services Tommy Thompson, Giant Food
announced that its 154 pharmacies in the Mid-Atlantic States would be
electronically connected to physician offices through the Internet. The
system allows physicians to send electronic prescriptions and lets
pharmacists send back questions. Secretary Thompson praised the
initiative and urged more physicians and pharmacists to use electronic
prescribing. The Secretary noted that electronic prescribing would mean
``less paper,'' ``fewer errors,'' and ``more time for patients.''
NACDS commends Congress for its foresight in pursuing electronic
prescribing as a step toward establishing a national health information
infrastructure. For example, Madam Chairwoman, you introduced the
National Health Information Infrastructure Act of 2003, with the goals
of decreasing costs, maximizing efficiencies, and reducing errors.
In 2003 Congress passed the Medicare Modernization Act (MMA), P.L.
107-183, which provides incentives for electronic prescribing. The
MMA's incentives will help foster the continued adoption of electronic
prescribing. NACDS commends Congress for providing physicians with
financial incentives to adopt electronic prescribing. We also support
the exemption from the anti-kickback law for physicians who are given
access to electronic prescribing systems.
Encouraging physician acceptance and adoption of electronic
prescribing remains a central task. However, adoption of electronic
prescribing by every physician is not a prerequisite to successful
development of electronic prescription systems. Instead, when
encouraging physician adoption it is important to focus our efforts on
the appropriate physicians. It is well documented that each year less
than 30 percent of physicians in the United States write 80% of all
prescriptions. By focusing efforts to encourage electronic prescribing
on this 30 percent of the physician population, we could bring the
productivity and patient safety benefits of electronic prescribing to a
majority of all prescriptions.
SureScripts: Filling the Connectivity Gap
Cost and difficulty of implementation have been cited as leading
obstacles to further development of electronic prescribing systems.
However, the greatest hurdle may be the need for global connectivity.
Traditionally, many physician offices have not had computerized systems
for patient records or for prescription records. Physicians have been
reluctant to make capital investments in this technology. Pharmacies
have maintained computerized prescription records since the 1980s, and
since then pharmacies have taken advantage of automation more than
physicians. Virtually all pharmacies have computer systems that help
perform clinical tasks such as drug utilization review, and pharmacies
are electronically connected to almost all payors. However, these
pharmacy systems do not necessarily interface with systems that
physicians use.
An effort to bridge the connectivity gap began in August 2001.
NACDS and the National Community Pharmacists Association, which
represents independently-owned pharmacies, launched SureScripts. The
purpose of SureScripts is to develop an engine that will encourage
electronic prescription connectivity between physicians, pharmacists
and technology vendors. SureScripts was founded to improve the safety,
efficiency and quality of the prescription process by promoting the
adoption of electronic prescribing. SureScripts is creating an open,
neutral, and secure system that is compatible with all major physician
and pharmacy software systems.
The national rollout of SureScripts' electronic prescription
services began in early 2004 and is currently live in over 12 states
today. SureScripts is expected to have active rollouts in local
communities in 25 states by end of 2004. Now that the majority of
pharmacy software certification and testing is complete, pharmacies all
across the country are in various stages of activating their stores for
e-prescribing connectivity. Additional markets will continue to go live
in 2005 and 2006.
Today, SureScripts is the nation's largest electronic prescription
network. Pharmacies and pharmacy software vendors representing 66% of
the retail pharmacies in the U.S. have certified, tested, and connected
their applications to the SureScripts network. By end of summer 2004,
that number will increase to 75% of all pharmacies in the United
States.
In addition, physician technology vendors currently representing
over 50,000 physician users have signed agreements to connect to the
SureScripts network to begin two-way communications with pharmacies for
the purpose of electronic prescribing. We expect the physician
representation for physician technology companies that contract with
SureScripts to grow between 75,000 and 100,000 by end of 2004.
In summary, both pharmacies and physicians are making great
progress in connecting to one another. Increased electronic
connectivity will help improve both the safety and efficiency of the
prescribing process, as well as improve the quality of medication
decisions.
The Need for Standards and Industry Collaboration
Wisely, the MMA also requires the adoption of standards for
electronic prescribing. NACDS and SureScripts are actively involved in
the standards development processes to allow physicians and pharmacies
to engage in electronic prescription connectivity. We are working with
the HHS National Committee on Vital and Health Statistics (NCVHS) as it
prepares to recommend standards to the Secretary for the electronic
prescribing program mandated by MMA.
The National Council for Prescription Drug Programs (NCPDP) created
SCRIPT, the recognized technology standard for electronic
prescriptions. Currently, SCRIPT addresses the electronic transmission
of new prescriptions, prescription refill requests, prescription fill
status notifications, and cancellation notifications. SCRIPT was
developed by NCPDP through a consensus process that included community
pharmacies, pharmacy software vendors, database providers, and other
stakeholders. Both NACDS and SureScripts are represented on NCPDP's
board, and both NACDS and SureScripts are actively engaged in the
standards development process at NCPDP work group meetings. SureScripts
uses the NCPDP SCRIPT Standard as the foundation for the software used
to transmit prescriptions.
The NCPDP SCRIPT standard is a robust national standard that
addresses the vast majority of the core functionality required by the
MMA. It currently facilitates the bidirectional transmission of
prescription information between prescribers and dispensing pharmacies
and pharmacists. In addition, the SCRIPT standard has the potential to
facilitate the electronic transmittal of information regarding
eligibility, benefits and medication history. SCRIPT will likely be
among the standards that NCVHS recommends the Secretary should use as a
basis for a broader electronic prescribing system.
The standards development process requires cooperation among
industry participants. With the shared goal of improving the health
care delivery system, SureScripts and RxHub are in constant dialogue to
improve electronic connectivity and to improve physician adoption of
electronic prescribing. RxHub's systems and SureScripts' systems are
compatible.
To encourage adoption of electronic prescribing, SureScripts has
created a Community Adoption Program to work with local community
health care leaders and state Quality Improvement Organizations (QIOs).
The QIOs will be instrumental in reaching out to health care leaders to
make patient safety improvement a top priority in their local markets.
Today in Colorado, the CEO of SureScripts, Kevin Hutchinson, is working
with the Senior Medical Staff and leaders of the QIOs, working on plans
to collaborate with one another for the benefit of patients in each
state across the country.
Electronic Prescription Principles
As we continue to help build an electronic prescription system,
NACDS is guided by several important principles. The SureScripts
certification criteria incorporate these principles, which are
important to driving physician adoption and ensuring that electronic
prescription systems are efficient and promote patient interests. Our
guiding principles include:
Protect Patient Choice of Pharmacy. An electronic prescribing
system should not limit patients' ability to have their prescriptions
filled by the pharmacy of their choice. Electronic prescription
technology should not be used to steer patients to particular
pharmacies.
Protect Physician Choice of Medication. Likewise, an electronic
prescription system should not be used to steer physicians to
particular drugs. Physicians will be more likely to adopt electronic
prescribing if they retain their ability to prescribe both ``on
formulary'' and ``off formulary'' medications.
Protect the Physician-Pharmacist Relationship. Prescriptions are
communications between physicians and pharmacists regarding a specific
course of pharmaceutical treatment. Electronic prescribing should be
used as a tool to enhance, not displace, the pharmacist-physician
relationship.
Protect Prescription Integrity. Electronic prescriptions should be
transmitted directly from physicians to pharmacies, without being
altered by third parties. Alteration of prescribed drug, strength,
quantity, allowed refills, or directions could adversely affect patient
safety. Physicians and pharmacists must be able to rely on the security
of the transmitted prescription information.
Preserve Pharmacists' Valuable Role. Pharmacists are medication
experts that collaborate with physicians to enhance overall
prescription drug use, and reduce the likelihood of medical errors and
adverse drug reactions. Electronic prescribing programs should
encourage that collaboration. Physicians will be less likely to adopt
an electronic prescription system that requires them to perform
pharmacists' traditional duties, such as drug utilization review and
checking for medication-related concerns.
Restrict Commercial Messaging. Congress wisely limited the ability
to send commercial messages through an electronic prescription system.
The MMA calls for electronic prescribing standards to ``allow for the
messaging of information only if it relates to the appropriate
prescribing of drugs, including quality assurance measures and
systems.'' \3\ The MMA Conference Report emphasizes that electronic
prescribing is not intended to be used ``as a marketing platform or
other mechanism to unduly influence the clinical decisions of
physicians.'' \4\ Physicians will be reluctant to adopt an electronic
prescribing system that burdens physicians with extraneous promotional
messages.
---------------------------------------------------------------------------
\3\ 42 U.S.C. Sec. 1395w-104(e)(3)(D).
\4\ H.R. Conf. Rep. No. 108-391 at 456 (2003).
---------------------------------------------------------------------------
Implement Incentives for Adoption. The MMA provides for grants to
encourage physician adoption of electronic prescribing. The grant money
is intended to assist physicians in computer system upgrades and staff
training that will enable them to engage in electronic prescribing.
There are significant costs associated with the successful
implementation of electronic prescribing for pharmacists, too, so
incentives should be made available to pharmacists.
Conclusion
NACDS commends Congress and the Subcommittee for fostering the
development of electronic prescribing systems. Enactment of the
electronic prescribing provisions of MMA will encourage the further
development and enhancement of electronic prescribing. We look forward
to active engagement in the development of policies, standards and
infrastructure to make widespread electronic prescribing a reality.
Chairman JOHNSON. Thank you very much. Dr. Sullivan,
welcome. We do not very often have a doctor available to
testify, so thank you.
STATEMENT OF THOMAS E. SULLIVAN, M.D., WOMEN'S HEALTH CENTER
CARDIOLOGY, DANVERS, MASSACHUSETTS
Dr. SULLIVAN. Thank you, Madam Chairwoman. It is a real
privilege to be invited to be a witness here today. As you
pointed out, I am a solo practitioner. I have been doing it for
about 9 years. I am a cardiologist, and most of my patients are
Medicare beneficiaries so they have lots of prescriptions.
Although I am familiar with group practice, I was the medical
director of a staff model health maintenance organization for
about 11 years and managed quite a few doctors along with my
patients, so I know something about incentives to change
physician behavior.
I will not read verbatim from my written testimony. I think
you can read it as well as I can. I will point out some of the
highlights, and the first one is--it says it all right there. I
have been taking care of patients for 35 years, and this is a
great advance. I have been doing e-prescribing for about a
year, so I am a real fan, although I would echo what you said
to us yesterday at the National Health Information
Infrastructure meeting: don't underestimate how difficult some
of this change can be. I will point out a few of those things.
Just to highlight some of the real advantages, I think this
does--I have to say, too, without SureScripts and RxHub and the
addition of an e-prescribing vendor, I could not be doing this.
So, they all had to come together and be able to work together
to make what I do a lot easier and more efficient. So, this
does require a lot of collaboration.
I have seen some administrative efficiencies in my office.
My medical office assistant, she just thinks it has changed her
life, the number of refills that we do, quite a few refills on
people with hypertension and diabetes and congestive heart
failure, those things. It is so much easier now. A refill comes
in a screen. We open up the computer and, boom, it is right
there, and there is no more handwriting. You do not have to
pull a chart. There is not a lot of phone tag and fax tag with
the pharmacist trying to call me and speak to me or me trying
to call in something else. So, it is really great.
In addition to that, I actually have my little hand-held
that I carry around with me all the time. I can write a
prescription from anywhere, including here, and do it very
quickly. So, all these things have really increased the
efficiency in my office. As you pointed out, about 95 percent
of my prescriptions are electronic now.
I do not think the costs are prohibitive, but they are
there. I will point out an example. When I first started this,
it was a pilot program in Massachusetts sponsored by one of the
payers who gave me the system free, and I used that for 6
months. Then I saw some other systems, and I saw that they were
really a lot more efficient, a lot better. So, I asked the
vendor if I could have the data that I have been putting in for
6 months and move it out so I could use it in another system.
They said no. I said, ``Are you kidding? This is my information
on my patients.'' No, no, they would not give it to me. They
thought I would violate some proprietary rule.
So, that made me a little more angry, and since I was
President of the Massachusetts Medical Society at the time--I
just finished that about 4 weeks ago--I said, I think we are
going to endorse an e-prescribing vendor, and we did not pick
that one. So, there have got to be some standards of
interoperability and, again, the risk that the physician takes.
If I had had to pay for that system, I would have been even
more angry that I could not switch to a better one, at least
take my data out and put it back into a new one.
So, there are costs there, and there do need to be
incentives. I clearly believe that and I am not a technology
person. I have never had a formal course in any IT, but I have
been interested in it for a very long time. I see the
advantages of this as well as an electronic medical record.
Actually, one of the little problems is I do not use a full
electronic medical record because my hospital has a pretty big
one and all the labs and that sort of thing and x-rays are in
there. I cannot integrate my e-prescribing and notes with the
hospital, again, because of the lack of interoperability and
there are some costs there also, although my medical society
has come up with a proposed solution, a new standard called a
continuity of care record (CCR), which I hope you will be
hearing about.
In addition, it really enhances patient safety. There are
no legibility problems. I could easily pick from a medication
list. The drug-drug interactions and the allergy checking are
all there. Some systems are more sophisticated than others, but
I really like that. I think it benefits the patients not just
in terms of quality and safety, but also it reduces some of
their hassle with perhaps going to the pharmacy and a
prescription might not be there because a phone call was not
made. There are a number of ways in which this benefits the
patient, too.
I will mention some of the challenges. Again, I already
alluded to the fact that we do need some more national
standards, and those are underway right now. I have to thank
the Secretary and thank actually both sides of the aisle for
coming together and seeing that this is a win-win for everyone.
I think you will hear from Dr. Teich some of the technical
things about the drug-name conventions which have to be
improved and made a little bit more friendly to physicians
rather than a pharmacy payment and processing system. That
would definitely help, and I think the U.S. Department of
Veterans Affairs and the U.S. Department of Defense are working
on this, and I would encourage support of that.
The issue of incentives, though, one of the things I am
worried about in this pay for performance, I like the idea of
paying for performance, but I do not like the idea that this
implies that physicians have to be paid to do the right thing.
I really resent being referred to as ``a businessman,'' and I
do not like the fact that the practice of medicine is becoming
more of a business than a profession. It is a real honor and
privilege to take care of patients, and I know we have to be
paid for it. If Medicare is going to subsidize and incentivize
e-prescribing on the one hand, or the government does that, and
then punish on the other hand because the sustainable growth
rate and every couple years we have to go to Congress and plead
for mercy or understanding or something, it is very hard for
physicians to understand how subsidies are okay for e-
prescribing but now, by the way, we are going to cut your rate
by 2 or 4 or 12 percent, or whatever. So, that is one of the
concerns I think that physicians have.
In terms of specific suggestions, again, I have alluded to
them. We need better standards for electronic transmission and
they are there. I am using this today. I am saying I can use
this today, but I am not like every physician. Many physician
practices are different. You heard that there is a target to
the high-volume prescribers. So, my patients, unlike, let's
say, a plastic surgeon or a thoracic surgeon, I write a lot of
prescriptions and do a lot of refills. So, my incentives in the
business case for me is much clearer. I can demonstrate the
return on investment to me a lot better than perhaps a surgeon.
So, we have to take that into account in terms of the rapidity
with which we want this adopted. I guess I will stop there. I
know my time is up. I am happy to answer any questions.
[The prepared statement of Dr. Sullivan follows:]
Statement of Thomas E. Sullivan, M.D., Women's Health Center
Cardiology, Danvers, Massachusetts
Key Points:
Based on 35 years of direct patient care and over one year of
ePrescribing, I am a great ``fan''.
Benefits/advantages of national e-prescribing system:
Administrative efficiency to provider. My Medical Office
Assistant loves this system. It's changed her life.
Reduced phone calls with pharmacies and no more ``fax
tag''
Reduced chart pulls; and staff can easily enter
medications for provider to sign Rx tools are always available, even
when on call or out of town (PDA phone and or secure Internet
connection)
Patients pharmacy benefit information and formulary
list also available
Decision support
95% of my Rx's are electronic now
Cost savings to provider.
All of the above--improved efficiency saves money.
Estimated hardware/software cost $500/yr, not counting Internet access.
The range of costs may vary by physician/practice.
Training time and learning curve for my assistant and
for me was 3-5 days to make it work and 1-2 months to ``make it sing.''
Staff can be put to other use or staff size may be able
to be reduced in some cases.
Better safety and quality outcomes due to clear, printed
Rx and real time point-of-care medication history.
No more illegible handwriting--a huge patient safety
benefit
Med list allows drug-drug interaction and allergy
checking before writing Rx--another safety plus
Improved efficiency allows provider to spend more time
listening to patient
Better outcomes with integrated real-time decision
support tools.
CAQH study showed providers do change med orders based
on decision-support alerts
Prevent further phone calls from wasting doctors' and
pharmacists' time.
Cost savings to patient--discussion and ability to choose
at the point of care/decision, between generic vs. brand and formulary
compliance.
Real-time information can allow doctor to give the
formulary drug in the first place, esp. in classes where medications
are similar. Without eRx, if patient is doing well on first (non-
formulary) prescription or samples, doctor may be hesitant to change to
formulary drug.
Positive impact on provider/patient communication and
interaction.
Patients like going to pharmacy only once, with
medication already there
Patients appreciate high-tech, esp. with decision
support for savings and safety
Challenges and impediments to physician adoption:
Many physicians are low volume prescribers and will not
see early benefits, e.g. many surgical specialties
Need for national standards that allow for
technological advances for both secure electronic transmission of
information and decision support tools.
We're mostly there now
For more widespread adoption we still need:
Interoperability (ASTM Continuity of Care Record--
CCR) for easier integration with other systems and the Electronic
Health Record
``Sig'' standard (Directions for use) for NCPDP
standard (similar to CCR implementation)
Drug-naming convention, listed the way providers
think of medications. Current use of ``example'' NDC codes is
inefficient. RxNorm is a better emerging standard and should be
supported. Government can show the way here, at almost no cost.
Integration of electronic systems into provider
offices/workflow.
Need a simple standard to allow data interchange
between PMIS, EHR, HIS, and even other ePrescibing systems (CCR). Then
the value of any electronic systems will be multiplied geometrically as
more physicians use them. The advantage of the CCR is that there is no
variability--if a vendor decides to use it, they use it ``out of the
box'' without modification.
Acquisition of hardware, software and technology
training and support requires new thinking on reimbursement and
aligning incentives.
This is an area where the government could help,
especially through ``pay-for-performance'' programs, grants, loans,
etc. We must avoid unfunded mandates, too many, already.
A more permanent solution to the flawed Medicare SGR
is needed to convince physicians and practitioners that the government
will not subsidize with one hand and punish with the other.
There are some small studies that demonstrate evidence
to support cost savings to physician practices/health system and
improvements in patient safety/quality outcomes as a result of
implementation of electronic prescribing.
i. CITL Report (quoted in the eHI report): http://
www.citl.org/research/ACPOE_Executive_Preview.pdf
ii. PocketScripts/Tufts Health Plan study in Massachusetts
2003
Going Forward: Suggestions to Committee
Help to create national standardized electronic
transmission and decision support tools to alleviate patchwork of state
requirements . . . including controlled substances (DEA)
Incentives to physicians to accelerate adoption are
necessary. Most physicians like other professionals, are not ``early
adopters'' of new technology.
The technology exists today and is capable of
implementing the e-prescribing requirements in the Medicare
Modernization Act, with some additional legislative support as outlined
above.
Chairman JOHNSON. Thank you very much, Dr. Sullivan. Dr.
Teich?
STATEMENT OF JONATHAN M. TEICH, M.D., PH.D., ASSISTANT
PROFESSOR OF MEDICINE, HARVARD UNIVERSITY, CAMBRIDGE,
MASSACHUSETTS AND PHYSICIAN, BRIGHAM AND WOMEN'S CENTER FOR
APPLIED MEDICAL INFORMATION SYSTEMS
Dr. TEICH. Thanks very much, Madam Chairman, Mr. Stark, and
Members of the Subcommittee on Health. In Washington and across
the country, there has been increasing momentum, particularly
this year, for the use of health IT and e-prescribing in
particular to improve the quality of health care. However, it
certainly has not yet realized its full potential, and it is
certainly at least partly in your power to help it get there.
My name is Jonathan Teich. My role here is as a builder,
creator, designer, and studier of these systems. I am a
professor at Harvard. I am a board-certified emergency
physician at Brigham and Women's Hospital and still practice
each week. I founded the Brigham and Women's Center for Applied
Medical Information Systems in 1992, and my role has been as
the primary designer of many of the Brigham's well-known
clinical information systems, including the computerized
physician order entry system that has been demonstrated to
reduce medication errors by over 80 percent. I am also Chief
Medical Officer for Healthvision, which is a health care
information company that provides interoperability and data
exchange across disparate systems in a region and which
delivers secure Internet-based clinical, patient, and community
systems to about 250 hospitals.
I serve on a number of committees and foundation boards in
the health information field. In particular, last year and this
year, I was privileged to lead a panel of some 70 experts,
including representatives of all of the gentlemen to my right,
in producing a white paper entitled ``Electronic Prescribing:
Toward Maximum Value and Rapid Adoption,'' published by the
eHealth Initiative here in Washington. I recommend that report
to you as an excellent reference, and I have drawn from it for
some of my remarks today.
We know--and I think you know, given your own remarks--that
errors in ambulatory care are common and they are serious,
perhaps even more so than the celebrated numbers we see about
inpatient care. We have research now that shows that as many as
18 percent of all Medicare patients have a significant adverse
drug event (ADE) in any given year. Overall, over 8.8 million
ADEs occur every year in ambulatory care, of which over 3
million are preventable.
As an emergency physician, I am also a client. I can expect
to see the manifestations of these problems every week. I can
expert to find at least one patient every night who is
suffering excessive bleeding or blood clotting because of
problems managing Coumadin, a popular blood thinner, at least
one patient experiencing medication side effects or drug
interactions that could have easily been prevented. I can
almost always expect to find at least one patient who did not
refill his medications on time and who is now showing up at my
door in an ambulance suffering the consequences.
With an e-prescribing system, the computer scans each
prescription instantly as it is written, checking for dose
problems, allergies, drug interactions, duplicate therapy, and
many other conditions. Particularly when integrated within a
complete electronic health record, e-prescribing can also
promote appropriate drug therapy for chronic conditions, such
as issuing a reminder that a patient with heart disease should
be taking aspirin and beta-blocker drugs, therefore greatly
increasing the compliance of use of these drugs.
It can speed renewals, it can reduce callbacks from the
pharmacy and help in many, many other ways. As Mr. Stark
mentioned, overall there are studies suggesting that national
savings from universal adoption of e-prescribing could be as
high as $27 billion. Some of the difficulty comes with to whom
those savings accrue.
If there are so many benefits to safety and efficiency and
cost, then why isn't e-prescribing simply a routine,
universally accepted part of current medical care? Right now,
somewhere between 10 percent and 16 percent of all U.S.
physicians use it, which is a growing fraction, to be sure, but
hardly what I would consider to be common practice. Many of
them are leaders and early adopters, such as Dr. Sullivan.
I would like to discuss four specific problem areas and
some recommendations for specific remedies. First and foremost
are financial issues. Right now the practice and the physician
needs to buy and install and maintain the system and go through
at least a short initial period of reduced productivity. Again,
while there are substantial cost savings to e-prescribing, they
accrue primarily over 85 percent to the health plans and
payers, while the doctors who are at the front of the process
and who must have these systems in place to kick the whole
thing off must absorb additional costs currently without any
compensation.
To remedy this, the private sector and the government and
CMS in particular should support practices through pay-for-
performance programs, as outlined in the MMA and which needs
the proper specifics; through implementation grant programs;
and also through differential reimbursement that recognizes the
additional resource value units in a practice that uses e-
prescribing.
The second problem area is certainly, as some other folks
have alluded to, in standards. Currently, there are many
inefficiencies, there are many errors, there are increased
development costs, and certainly lack of portability of a
patient's record due to incomplete or missing standards.
Producers of health technologies have to build the same
function over and over again to account for the many different
standards, and very often when prescriptions get communicated,
they are communicated only as free text, only as the word
``amoxicillin,'' which is prone to many of the same kinds of
transcription errors that we had on paper in the first place.
Standards should be required or accelerated in five
particular places: a single doctor-level dictionary of
medications, such as the National Library of Medicine's RxNorm
Project, to ensure that doctor systems and patient systems talk
to each other; standards for the ``sig,'' or the dosing
instructions in a prescription; standards including drug
classes and benefit classes for formulary information so that
these can be rapidly exchanged and used; identifiers for health
plans so we can understand where a patient matches up against
these formularies; and a way to reconcile the widely varying
requirements for prescriptions in different States, all of
which have essentially the same intent.
The third area is the quality and usability of an e-
prescribing system. They should be easy to learn, quick to use,
and they must handle all of the typical prescribing workflows.
government certification programs should support an aggressive
floor of good system features without suppressing independent
private innovation.
Fourth, there should be expanded appropriate safe harbor
provisions from self-referral and anti-kickback laws. Recent
efforts this year have certainly helped that process. Hospitals
and health systems have the funds and have the desire, in fact,
to purchase and support e-prescribing systems better than a
typical small practice can do. They should be permitted to
provide technology to physicians who already have an
established relationship with the hospital.
Members of Congress, we know the financial costs. We know
the increased illness. We know the suffering that happens each
day that could be remedied by advanced e-prescribing systems
and electronic health records. I hope you will take advantage
of the opportunity that you have and that you will consider
these recommendations and that you will take the necessary
actions so that we can improve the health of so many. Thank you
very much for allowing me to speak, and I would be happy to
answer questions as well.
[The prepared statement of Dr. Teich follows:]
Statement of Jonathan M. Teich, M.D., Ph.D., Assistant Professor of
Medicine, Harvard University, Cambridge, Massachusetts
Chairman Johnson, Ranking Member Stark, members of the Health
Subcommittee: thank you for the opportunity to appear before you today.
I have spent much of the last fifteen years seeking out and inventing
ways to use computer technology to make healthcare easier, better, and
safer. In Washington and across the country, there has been increasing
momentum for the use of health information technology, and electronic
prescribing in particular, to improve the quality, safety and
efficiency of healthcare. However, it has not yet realized its greatest
value--and it is in your power to help it get there.
My name is Jonathan Teich. I am an assistant professor of medicine
at Harvard, and a board-certified attending physician in emergency
medicine at Brigham and Women's Hospital. I founded the Brigham and
Women's Center for Applied Medical Information Systems in 1992, and I
have been the primary designer of many of the Brigham's well-known
clinical information systems, including the computerized provider order
entry system that has been shown to reduce medication errors by over
80% and adverse medication-related events by 55%. In 1999 I helped
found Healthvision, a leading healthcare information company devoted to
realizing patient care quality improvement through Internet-based
clinical, patient, and community systems, now in use in over 250
hospitals and health systems. I serve Healthvision as senior vice
president and chief medical officer.
Organizationally, I serve as the chair of the patient safety
steering committee for the Healthcare Information and Management
Systems Society (HIMSS), the largest organization devoted to healthcare
information technology advancement in this country. I am a member, and
a recent director, of the American Medical Informatics Association,
which represents the many engineers and scientists who work to advance
the state of the art of healthcare information technology. I also serve
on the board of the Foundation for the eHealth Initiative, a nonprofit
group here in Washington that is devoted to policy advancement, and
that has also facilitated programs to bring expert consensus and
practical solutions to key issues in this field.
I have spent a good deal of time on the development of electronic
prescribing systems. Last year I was privileged to lead a panel of 70
experts in producing a major whitepaper entitled ``Electronic
Prescribing: Toward Maximum Value and Rapid Adoption,'' published by
the eHealth Initiative and presented in April at a well-attended
meeting that also featured CMS administrator Mark McClellan. That group
of experts, from all sectors of the medical and pharmaceutical
industry, rendered evidence and recommendations on the promise of e-
prescribing, on the barriers that keep it from being fully adopted and
realizing its potential, and on ways to break through those barriers. I
recommend that report to you as an excellent reference, and I have
drawn from it for some of my remarks today.
The problem and the promise
We know that ambulatory care errors are common and preventable, and
that electronic prescribing can improve safety, quality, efficiency,
and cost. In inpatient care, as I mentioned previously, electronic
medication ordering has been shown to have a significant impact in
reducing adverse drug events or ``ADE's''--that is, not just errors,
but errors and other mishaps that actually cause harm to the patient.
You are probably aware of the Institute of Medicine findings of 2000,
which estimated that adverse drug events--ADE's--may be responsible for
44,000 to 98,000 deaths annually. These numbers came primarily from
inpatient data on hospitalized patients. Recent research now shows that
ADE's are very common in ambulatory care as well, and can be very
serious. We have research that shows that as many as 18% of all
ambulatory patients have a significant ADE in any given year. According
to the Center for Information Technology Leadership (CITL), more than
8.8 million ADE's occur each year in ambulatory care, of which over 3
million are preventable. Medication errors account for 1 out of 131
ambulatory care deaths.
This isn't surprising to me, because I not only work on prevention
of medication errors, but, as an emergency physician, ``I'm also a
client.'' In every one of my shifts in the hospital, I can expect to
find at least one patient who is suffering excessive bleeding or blood
clotting because of problems managing warfarin, a blood thinner. I can
expect to find a patient who has problems because her prescribed
medications had side effects or drug interactions, many of which could
have been prevented. And I can almost always expect to find at least
one patient who didn't refill his medications on time, or who doesn't
even know what his medications are supposed to be, and who has now been
brought to me in an ambulance, suffering the consequences.
Electronic prescribing has presumed value in preventing these
errors because it can apply clinical decision support: the computer can
check each prescription as it is written, either for internal
inconsistencies (such as excessive dosage) or for conflicts with the
patient's known allergies, interactions with other active medications,
duplicate therapy, and many other conditions.
In addition, electronic prescribing can improve quality,
efficiency, and reduce cost by several other mechanisms, including:
actively promoting appropriate drug usage for chronic
conditions (preventing ``errors of omission'')--for example, reminding
the physician and the patient that a patient who has had heart disease
should be taking aspirin and beta-blocker drugs.
providing information about health plan formularies and
drug coverage, so the patient can understand and make choices about the
cost of his medications;
speeding up the process of renewing medications, and
helping making sure that patients and physicians don't miss needed
renewals;
electronically transmitting prescriptions to pharmacies,
thus eliminating one more source of transcription error and delay;
keeping better records of a patient's current medication
profile, so that all of a patient's clinical caregivers can treat the
patient with confidence.
More than 3 billion prescriptions are written annually. Given this
volume, even a small improvement in quality attributable to electronic
prescribing would translate into significant healthcare cost and safety
benefits if electronic prescribing is broadly adopted. Studies suggest
that the national savings from universal adoption of electronic
prescribing systems could be as high as $27 billion, some from ADE
prevention and the majority from better utilization of drugs, guided by
these systems.
Much of the current information on the performance of electronic
prescribing comes from the inpatient environment, because this has been
studied for a longer period of time and because it is a more controlled
environment. There are many studies that show the beneficial effect of
electronic medication ordering. My research group published a study in
2000 showing that, before the system went into place, about 2% of all
orders for medications called for an excessive dose, possibly injurious
to the patient. Immediately after putting in a computerized system,
which simply offered recommended doses in a list, that number dropped
dramatically down to 0.5% percent. Furthermore, with additional
improvements to the system over the years, the number dropped to 0.2%--
10 times fewer overdoses than in the non-computerized world. There are
numerous other examples of the dramatic impact of relatively simple
computer interventions in that study. These are the identical
interventions that are being applied in ambulatory-care e-prescribing
systems, and we expect that research now in place will show similar
impact.
The truth is, many of the things that computerized prescribing
systems alert about are things that physicians already learned--drugs
to avoid in certain situations, allergies and so on. But in the heat of
the moment, when you are trying to give your patient three new
prescriptions, renew six other medications, order a dozen lab tests and
a CT scan, all at the end of a ten-minute visit slot, it's easy to
forget these vital details. Electronic prescribing with clinical
decision support can sometimes act like a senior expert, guiding you to
the best care plan; more often, though, it acts more like a highly
conscientious assistant--who doesn't know as much as the doctor does,
but who remembers absolutely everything, and makes sure the doctor
remembers the right rule at the right time.
Levels of e-prescribing
Electronic prescribing systems are available in a variety of
graduated levels, which we expressed as a pyramid in our report. The
levels are:
1. Basic electronic reference only. Drug information, dosing
calculators, and formulary information are available, but are not
automatically shown while prescribing.
2. Standalone Prescription Writer: search by drug name and create
prescription; no long-term data about patient is accessible.
3. Supporting patient data is included (Demographics, Allergy,
Formulary, and/or Payer Information).
4. Medication Management: Prior medications are available for
renewal, interaction checks, etc.
5. Connectivity between the doctor's office, Pharmacy, PBM and
Intermediaries.
6. Full integration with the electronic health record (EHR).
At the first level are simple stand-alone prescription writers,
which can create a prescription, and check doses, but which are not
connected to any long-term patient information. At higher levels,
additional data is available, electronic communication with pharmacies
and intermediaries is established, and at the highest level there is
full integration with a complete electronic health record.
Some benefit to patients can be seen at all levels. However,
systems at the higher levels of sophistication--which may be associated
with higher start-up cost and complexity--afford much greater
opportunities for quality improvement, reduction in errors, and
improved workflow efficiency. A practice with limited resources can and
should get into the game at the lower levels today--but the eventual
goal is always to approach the highest levels, thereby to reap their
higher benefits; thus even basic systems should have the potential for
later upgrading.
Barriers to maximum adoption and value
So, we can see that e-prescribing can improve safety. We can see
that it can improve costs. We can see that it can promote quality
through proactive interventions, improve communication, and keep better
overall integrated records. But the fact is, adoption is relatively
low--between 10% and 16% of all U.S. physicians, depending on the
survey you read. Despite a few well-publicized payer-supported starter
programs, e-prescribing hasn't taken off the way it probably deserves.
So, why isn't e-prescribing a regular, universally adopted part of
medical care?
A number of barriers stand in the way of universal adoption in the
practice. These fall into the categories of cost, time, usability, and
standards.
Cost and time issues
The doctor may not be able to justify the up-front cost
of buying and installing a system, and the continuing cost of
connections and upkeep.
At least initially, while the doctor is learning the
system, e-prescribing will take more time compared to paper
prescribing; this translates to decreased productivity. A well-designed
system should quickly close this time gap, but doctors remain to be
convinced.
There is time needed, and resource value expended, to
review the warnings and alerts that the system may generate.
None of these costs and resource expenditures are
reimbursed at present.
Usability and value issues
Current systems are still on a designer's learning curve:
systems must be easy to learn, quick to use, and handle all of the
typical prescribing workflows (the eHI report contains a number of
recommendations to address this);
There is a lack of imperative: until safety improvements
are demonstrated and fully publicized, and until e-prescribing becomes
an expected part of care, doctors do not feel any pressure to make the
leap.
There is clearly an issue with misaligned incentives here. I
mentioned that e-prescribing can lead to considerable savings overall.
However, much of these savings, whether from prevented ADE's or from
better medication utilization, accrue to payers and health plans.
Pharmacies also see some benefit because of reduced transcribing,
reduced time on the phone clarifying orders, and the ability to promote
refills; in addition, automated record-keeping is already a mainstay of
pharmacy practice. It is the doctors, who must have the technology in
place to start the whole process going, who don't see much of the
improved economics. Indeed, they may have a negative financial return
because of the cost of the technology and, if the system is not
sufficiently usable and quick, from lost productivity. There needs to
be a way to realign the incentives, so that the technology is desirable
to all who need to purchase and use it.
Standards
One more stumbling block is in the area of standards. The eHealth
Initiative project identified four standards in particular, that need
to be created or enhanced:
Widely varying state board of pharmacy requirements
increase the complexity and cost for a technology company to develop an
e-prescribing system. In most cases, these boards all have the same
intent; however, one state requires that the prescription must say ``no
substitution allowed'' and must have the provider's DEA number at the
top; another requires that the prescription must use the words ``do not
substitute'' and the DEA number has to be at the bottom.
There is no standard ``doctor-level'' dictionary of
medications. There is a standard for pharmacy packages--the NDC code--
but for doctors, different systems will use different vocabularies.
This makes it difficult to have consistent clinical decision support
rules--for example, different systems may have somewhat different lists
of drugs that interact with each other--and it is extremely hard to
communicate or transfer information from one system to another, and
further increases cost and complexity. There is a government project,
the RxNorm project, which is making some headway in resolving this, but
it has not been established as a recognized standard.
The lack of a standard for the ``sig''--the basic
instructions on a prescription, such as ``take one pill three times a
day for ten days''--further complicates the ability of systems to
communicate with each other, and again makes it hard to standardize and
evaluate clinical decision support rules.
Different health plans express their formularies in
different ways, using widely different drug categories, different
formulary classifications, and so on.
Potential Solutions
Incentive steps
Combining both high impact and high feasibility as desirable
properties, the eHI Incentives Workgroup concluded that three incentive
areas held the highest promise:
Differential reimbursement for utilization of electronic
prescribing, or for the information processed (RVU's).
Pay for Performance programs for both primary care and
specialty practice, rewarding both use of technology and the improved
chronic-disease management which it facilitates.
These are the most obvious ways to re-align the incentives and get
doctors in the game. Government action can play a huge role in these
economic areas. If CMS, as the largest U.S. healthcare purchaser, were
to clearly go forward with plans for a pay-for-performance or
differential reimbursement program, it is likely that usage of e-
prescribing, and electronic health records in general, would increase
dramatically, and the entire healthcare system would be able to reap
the ensuing safety, quality, and cost benefits.
Appropriate safe-harbor provisions from self-referral and
anti-kickback laws. Hospitals and health systems have the funds, and
the economies of scale, to acquire and support e-prescribing systems
better than a typical small practice can do, but they are extremely shy
about doing so lest they run afoul of these laws. The recent Notice of
Proposed Rulemaking published in March of this year helped considerably
by providing safe harbors for community health information networks. As
the CMS notice itself said, it is unlikely that this extension would
have any significant potential for abuse. We think it has great
potential for improving care, but there is still considerable confusion
about the scope of the new clauses. These should be clarified and
carefully extended to ensure that those practices that already have
demonstrated significant relationships with a health system should be
able to band together and enjoy the economies of scale.
Standards and value steps
Other possible courses of action for the government are in the
areas of promoting the most-needed standards, and ensuring that high-
value e-prescribing systems are recognized and supported:
The federal government, through the process that
originated with the passage of the Medicare Modernization Act, should
work to promote standards-based systems, and rapid development of
needed standards and unifications--particularly the four key standards
noted above.
When deciding how to certify an e-prescribing system as
one whose use merits incentives, it will be important to include
criteria that show that (a) a system has sufficiently powerful clinical
decision support features, (b) it can participate in electronic
communication and appropriate sharing of information, and (c) it can
function as part of a more comprehensive electronic health record. It
behooves us to use the momentum generated over the past few years to
promote not only electronic prescribing, but interoperable, intelligent
electronic health records in general. A task force should be devoted to
determining some of these criteria. Government incentives should
support a ``floor'' of good system criteria, and should promote common
research and dissemination of best techniques and best practices,
without suppressing independent innovation.
The government should support research into projects that
can organize and collect clinical decision support rules, in a more
practical way than has happened heretofore. This is necessary so that
all system developers can make use of the information, so that research
into the effectiveness of these rules can be shared and re-used, and so
that healthcare providers no longer have to reinvent the wheel at each
location, when determining the best approach to high-value clinical
improvement through information technology.
As the government has accelerated electronic prescribing
through legislation, standards, and incentives, so should it consider
similar tactics to support the National Health Information
Infrastructure and the development of highly interoperable electronic
health records.
Summary
More intuitive systems, effective standards, and significant
incentives to reconcile financial costs and benefits are all critical
to the adoption of electronic prescribing systems throughout the United
States. In turn, well-developed and practical clinical decision support
and advanced communications functions are vital for those systems to
provide maximum value, both clinical and financial. Steady progress has
been made in some of these areas, particularly over the last few years.
However, we have not yet reached the goal, the point where electronic
prescribing is seen as a ``must-have'' part of healthcare, and as a
result, the very large benefits in quality and cost that could be
achieved are still some distance away.
The need is now all too clear. Research has proven what we
physicians all knew: that increased illness and hospital admissions and
even deaths occur every day, due to adverse drug events that could be
prevented by advanced electronic prescribing systems. You may have seen
these very events happen to yourselves, your friends, or to members of
your family. We know that large numbers of Americans do not get the
care they need for their chronic conditions, and that electronic health
records with e-prescribing and clinical decision support could help
make sure that they do. I hope you will take advantage of the
opportunity you have, that you will consider the recommendations I have
discussed today, and that you will take the necessary actions that can
improve the health of so many.
Thank you for permitting me to speak with you today. I will be
happy to entertain questions.
Chairman JOHNSON. Thank you. I am delighted to have
Representative Tim Murphy of Pennsylvania here with us. While
not a Member of the Committee, he has a bill to provide
incentives, and we are glad to welcome him here. Dr. Teich, you
say we know the cost. What is the cost? Dr. Sullivan, you may
want to chime in, any of you? Now, if you are just a
practitioner, let's start first with the high-volume
practitioner who is doing this because his payback is going to
be faster. I was very interested to read in your testimony that
it only took you and your staff a couple of months to get to
where you really were making, as you put it, your relationship
with technology sing. What does it cost?
Dr. SULLIVAN. I got my first system free, but we like to
say--and I am part of the partner system, too, that Dr. Teich
is--that free is not cheap enough sometimes because it depends
on what the workflow does. If you have to lose productivity for
an enormous amount of time, free is not cheap enough. So, about
$500 a year are the costs that I and other physicians are
looking at in terms of hardware costs. Now, that can vary quite
a bit.
Chairman JOHNSON. That is upgrading and maintenance and
Internet?
Dr. SULLIVAN. That is talking about a hand-held device and
the cost of software to make it work. That does not include an
Internet connection, which could be $30 a month or $40 a month.
You could do it with dialing up, but----
Chairman JOHNSON. So, for a multispecialty practice, about
$500 a doctor?
Dr. SULLIVAN. Yes. Again, it varies quite a bit depending
on your specialty. For a surgeon it would be--if they lose
productivity and they are not doing a lot of refills, it might
be more.
Dr. TEICH. I would come up with similar numbers, Madam
Chairman. We have subscription plans, for example, that people
use sometimes where they get it on a monthly basis, and those
costs, depending on what you are getting, tend to run between
$25 and $50 per doctor per month. Again, that is the ongoing
cost. As Dr. Sullivan mentioned, there are some start-up costs
that are necessary. Probably the biggest cost that people at
least anticipate has to do with productivity issues and has to
do with the ability to be able to maintain these overtime.
Dr. SULLIVAN. Can I also mention that when I first looked
at these systems about 2 years ago, I was quoted about $100 a
month to me, so there has been a big change. So, that cost
figure is an estimate.
Chairman JOHNSON. I will just ask one more question now and
move down the aisle. How does SureScripts and RxHub interact?
What types of collaborative efforts have you undertaken? What
are some of the differences between the two organizations? What
is the overall scope of your reach?
Mr. FULLER. I certainly will start and say that, first of
all, today in the system that exists, the prescription comes
into a pharmacy, and the adjudication process immediately goes
electronically and involves PBMs. So, the relationship that
exists today between retail pharmacy and PBMs has been in place
for some period of time. As SureScripts--and Dave will speak to
RxHub, but as SureScripts and RxHub have evolved, we have tried
to be very focused in areas where we think we can offer
expertise. We have tried not to get into areas where there is a
considerable expertise that others have. We do not have, for
example, a specific physician system. We certify a doctor
first. We certify several others.
Those physician systems, because they want the kind of
information that RxHub can provide--or some of the physicians
do--they have a relationship with RxHub to get formulary
information or patient information. The fact that that occurs
is not a barrier to being certified by SureScripts. In fact, as
I said, all of those physician systems that we have certified
have a relationship with RxHub, and most of the 10 or 15 we
have looked at that will be certified probably this year have
relationships with RxHub.
So, in one way, at one level, we are two entities that are
serving to accelerate the adoption of e-prescribing where the
prescription information flows to the pharmacy with a physician
that may be provided with information from the PBM while they
are writing the script. Certainly the pharmacy is provided with
information from the PBM in filling the prescription because
that is in place now.
That is kind of a collaborative effort that is going on in
the marketplace today. Not everybody understands that, but, in
fact, we even have physician systems that are negotiating with
each company worried about telling us when, in fact, we know it
and encourage it. So, that is today.
The other area of collaboration is we are both absolutely
determined to work through the standard-setting process in a
way that is going to produce standards that facilitate the
rapid adoption by physicians. It does us no good to have a
system that is a little more favorable to pharmacy or a little
more favorable to the PBMs if it complicates getting physicians
to use the system. In this area, we really are looking at how
we can think through what RxHub knows and what SureScripts
knows to come to the entities that are looking at standards and
say in our best judgment, our combined best judgment, here are
the standards we need to bring physicians online more rapidly.
I liken it--I am sorry to go on so long. I am going to stop
in a minute. I liken it to trying to suggest to somebody that
they really need to use a laptop computer, but to use a laptop
computer, you have to know the word processing program, the
Excel spread sheet program, and what all you really want to do
is e-mail. If we make this too complicated, physicians will not
take that first step and begin using the system. We are
absolutely convinced at SureScripts that the more experience
the physician has, the more they will find features by drilling
down to give them better information, to help--to be more
responsive to the patient questions. If you go to a physician
and right off the bat say, good news, now you are going to be
able to do price comparisons, store comparisons, it is too
complicated.
We strongly believe, both of us, that there ought to be
formulary information. We strongly believe we ought to be
providing information on generic equivalents. That is a very
important part of the process. Those first steps have to be--
they are very important. They have to be small enough so that
we will get adoption and not scare people away.
Mr. McLEAN. Overall, I want to absolutely underline Craig's
statement that we are not competitive. We are complementary.
From the RxHub point of view, we focus on, when I mentioned in
the statement front-end information, it relates to the
information that exists with the PBM today, which is a person's
eligibility information about a drug benefit, the formulary
information, in terms of what drugs are on formulary at what
levels, and also then the medication history that is maintained
by the payer, in terms of what is in that payment system. One
of the analogies I use, and if you go back to 15 to 20 years
ago, 15 years ago, I guess, when the last time we in the
country had passed a Medicare drug bill that unfortunately had
gotten rescinded, one of the benefits that came out of that was
what exists today with electronic adjudication in the pharmacy.
So, when you go to the pharmacy today, and your script is
adjudicated as you are there, meaning eligibility is checked,
formulary is checked, all that happens in the pharmacy today.
What RxHub has built is the ability for all of that to be
backed up to the physician office. So, what the physician has
available, through the various vendors that would participate
through RxHub, is access immediately, again, in an automated
teller machine-like transaction basis, to the eligibility of
that patient, the formulary of that patient and the medication
history that that person has had. Now, it is not 100-percent
complete. It is what is in the payment system for that
particular payer.
So, with that, we are able to provide to the physician
office, through the technology vendor that they might choose
and, again, our interest is to get the RxHub system connected
through any and all vendors that provide services to physician
offices, whether those are physician practice management
systems, electronic medical record vendors, other hospital
systems that provide support services to physicians, but that
is our business objective is to make that happen.
So, when I speak about front-end information, it is being
able to provide that information to the physician and their
office staff. We do not want to see, and the physicians clearly
don't want to be in the role of trying to be the administrator
on behalf of the PBM. So, that information is provided to those
vendors to do that. Again, just to close, I could not be more
in agreement with Craig, that between SureScripts and RxHub, we
are very complementary in the roles that we take, and the focus
that we have had.
Dr. SULLIVAN. Can I mention one more thing about costs that
I forgot? The data conversion costs, it is only a one-time
cost, but it is substantial. Practice management systems, about
70 percent of physicians have electronic practice management
systems.
I figured out a way myself, on my own, to enter the data
into the e-prescribing. Now, the other way to do it is to just
one-by-one enter data, but I was given a quote of $2,500, a
one-time data conversion cost if I wanted to build an interface
to this e-prescribing system that I have. For the physicians
who are using electronic health records already, there is a bit
of an impediment. Again, this data conversion is a bit of an
impediment, and to the extent that standards can help that and
reduce the costs, I think that will be great. Again, we are
working on that.
Dr. TEICH. Actually, there is technology which folks at
this table are working on, which may provide some easier
answers to that because the big problem is I already have a few
thousand patient records. They have their medications on there.
How am I going to get them into my system in the first place?
One interesting that is possible now or is being developed now
from folks over here is the ability to supply that information,
to supply that fill history and, from that, to be able to
construct a list of the patient's active medications so that
that very, very tedious task can go away.
Chairman JOHNSON. So, is RxHub constructing these histories
from past purchases?
Mr. McLEAN. That information comes directly from the PBM.
So, what we do is we go in--the only data file that we maintain
at RxHub is a master patient index, which are five points of
demographic information about each individual.
Chairman JOHNSON. So, for example, an employee working for
a big company whose prescription drugs are managed by a PBM,
that PBM has that whole history and can transfer it to you, and
the doctor can call it up. That is interesting.
Mr. McLEAN. That is correct.
Chairman JOHNSON. Mr. Stark?
Mr. STARK. Thank you, Madam Chair. I have a request. My
wife noticed, Dr. Sullivan, that back in 1972 you wrote, I
presume, an article called, ``A Clinic for Male Derelicts,''
and she would like a copy. I suspect you might send one to my
colleague, Mr. Crane, from Illinois. We would find that useful
at this point. That caught my eye. I am going to just assume
that all of your clients have a computer somewhere in the chain
of their drug empires. This is not moving them very far in
getting them used to it, but for Dr. Teich's and Dr. Sullivan's
colleagues, it is getting them to move.
You talked about $500 a year, but I go back to converting a
bank to computers. Unless you do the whole thing, you are only
half--then you are in a real mess. You have got paper records,
I would guess, and e-prescriptions, and you are probably worse
off in a way, but it seems to me that the savings just in
office staff in a practice such as yours would be certainly
more than $500 a month in time just to pull up, rather than
have to sort through a whole roomful of files. I can't----
Dr. SULLIVAN. Are you talking about just e-prescriptions or
the whole----
Mr. STARK. The whole thing. It just seems to me that just
having prescriptions for a patient is only half a loaf. You are
running around with one shoe off and one shoe on.
Dr. SULLIVAN. You are absolutely right.
Mr. STARK. That what we are talking about is getting a
paperless--getting an electronic information system in the
various practices of medicine, however they are conducted. I
would think the advantages, in terms of convenience and time,
yes, the conversion and the learning process is a pain in the
butt, but once you are done--I remember when we were talking
about paying for laser--what do you do with your eye--
cataracts, it used to take a guy 5 days off his practice to go
learn how to do it. Now, it takes like an hour-and-a-half to
run down and learn how to do it, so we never got the fees
lowered, by the way, as the learning curve went up.
Nonetheless, isn't there an amazing savings in practice expense
once the conversion is digested, if you will?
Dr. SULLIVAN. The answer is generally, yes, but--yes, but--
and I am sure you hear that a lot. Again, a big difference
between a surgical practice and a medical practice. There are a
lot of us who are in internal medicine and my specialty,
cardiology, who think that IT and electronic medical records is
like the new scalpel for doctors who have what they call
``cognitive'' practices, as opposed to ``procedure-oriented''
practices.
Mr. STARK. Right.
Dr. SULLIVAN. I know the surgeons don't like that term, but
to the extent that you say aren't there a lot of savings, well,
it also depends on what kind of an interest and a pediatrician
may have, especially an internist taking care of seniors, may
have a huge medical record, a huge record; a surgeon's real
thin.
Mr. STARK. Then it is less conversion.
Dr. SULLIVAN. Yes, but----
Mr. STARK. If the guy lived after surgery, how many records
do you have left?
Dr. SULLIVAN. Right. Right.
Mr. STARK. You send a copy to you and you keep them----
Dr. SULLIVAN. Right, but you are talking about the savings.
When you are talking about electronic health records, the full,
you are talking anywhere from $5,000 to $30,000 per doctor. I
mentioned e-prescribing, $500.
Mr. STARK. Even at that, it just seems to me, as a person
just who has converted just financial records, the efficiency,
and the savings, and the storage, and the ability to get this
history quickly is just so----
Dr. SULLIVAN. If you spend $30,000 on an electronic health
record, as some physicians have, and you had the same
experience I had with my first e-prescribing vendor----
Mr. STARK. Then have to change.
Dr. SULLIVAN. Yes. You would be really upset, and you
wouldn't be thinking about savings at all.
Mr. STARK. I understand, and that happens when you have to
change from whatever you have got to Quicken, and you do not
start with them in the first place, and you lose everything.
That does happen. I was getting back to the requirements. There
was a time, a long time ago, when you could fly a private plane
and you didn't have to have a radio, and then we said you do or
we said you have to have a transponder. I suppose everybody has
to have them now, and you do. So, they put them on, and they
don't argue it. You go out in the Chesapeake Bay, and you don't
have a life vest on, the people in the boat, the Coast Guard
will raise hell with you. So, there are times when it is
incumbent on us to say this is the way it is going to get done
if it saves lives, not to mention money. How many doctors do
you two guys know who don't have a laptop somewhere in their
families?
Dr. SULLIVAN. Can I just say that the airline pilots and
the boaters don't have the pleasure of knowing malpractice
attorneys.
Mr. STARK. Oh, I think that you will find that those
operating private companies--companies that operate privately--
--
Dr. SULLIVAN. Okay.
Mr. STARK. How many doctors do you guys know that don't
have a computer, either in their family or in their life?
Dr. SULLIVAN. Not many.
Mr. STARK. A cell phone? You guys--when I was a kid, it was
the doctors in the neighborhood who owned cars. They were the
first guys in town to get these modern inventions. So, come on.
Dr. TEICH. There is more cost involved between having the
laptop that I use for running Quicken and e-mail at home
compared to what I have to do to make secure, private,
protected transactions along this way. I certainly do want to
amplify two things you said about the value. Here, where I
work, in an emergency room, I am primarily a consumer of
prescribing information. If I were to be able to hook up to a
network where I could see what a patient is taking, as we are
starting to do now in Massachusetts, it will increase my costs.
I don't have a flat way of reimbursing or justifying it. I do
have to find a way to justify that.
At the same time, there is no question it is going to make
care much better. There is no question that patients that come
to me who don't know or who are unconscious are going to get a
lot better care for that information now being available. So,
it does cost money, but there is no question there is a care
imperative. As for the other point you mentioned about the
electronic health record, one of the things you will find in
the eHealth Initiative Report is a pyramid of greater functions
as you go up the ladder of e-prescribing. Once you have that
connection, you can do that.
Mr. STARK. Staff just suggested how about if we said no
medical malpractice if you use electronic records, and you are
only liable if you don't.
Dr. SULLIVAN. I would love to see you have that power. I
would love it.
Mr. STARK. I bet you guys would convert overnight, right?
Dr. SULLIVAN. In a flash.
Mr. STARK. All right.
Mr. FULLER. Mr. Stark, if I could just make one comment
about the costs associated because I think it is important.
Mr. STARK. I have got to explain--Mr. Fuller understands
this--he was with me in suing the HHS Secretary to cut out
these cockamamie drug discount cards until he found out how
much money you could make in them, and now----
Mr. FULLER. Now I am one.
Mr. STARK. Now they have their own. So, he understands
about this stuff.
Mr. FULLER. I do want to just comment briefly on the costs
and how this gets paid for because I think, in terms of the
path we are on now, it is important to consider this. I don't,
in any way, underestimate the costs that a physician would have
to pay, and some of the systems are $30 a month and some are
more expensive. The fact is that doesn't cover the costs.
Retail pharmacies investing millions of dollars, tens of
millions for some of the individual chains, hundreds of
millions overall, we obviously have computers, but as you well
know, converting technology to things like this costs a lot of
money.
In addition to that, there is a transaction cost involved,
and a transaction cost for these scripts is being paid by the
pharmacy. So, as we begin filling millions, and hundreds of
millions, and eventually billions of prescriptions, while the
cost will come down, the electronic transaction rings a little
bell and money is being collected from the pharmacy for this.
Now, why do they do this? They do it because of the
hundreds of millions of calls I described. They do it because
we have 120,000 pharmacists and chain pharmacies today. We are
4,000 short. We need more. We do it because they are very high-
paid people. So, I am not suggesting that the investment
doesn't have some offset of savings, but there is substantial
investmentin this by us by the PBMs, and it is very important
to us that the rules are written in such a way that these
investments which are being made today don't go like water over
the dam because the regulatory environment changes the game on
us.
Mr. STARK. Could I throw in my last comment, Madam Chair?
Take a page out of physician reimbursement. Don't let us try
and work out these details as cost-sharing between the
pharmacies, and the doctors, and the surgeons, and the
internists. You guys get together and come up with your shell
plan of who is bearing what portion of the costs or gets what
portion of the savings and come back to us business we will
screw it up. There would be too much pressure on us from all
sides to do it one way or the other. You guys go into the room
and say we are not coming out until the pharmacies, and the
physicians, and the PBMs, and the pharma, and all the guys get
together and figure out who is going to pay for this or how
they are going to share both in the savings and in the costs
and then come back, and I am sure the Chair would greet you
warmly to say, great, now we can move ahead once you guys put
it together. That would move us along very rapidly. Thank you,
Madam Chair.
Chairman JOHNSON. Brilliantly spoken, and I must say,
especially for an advocate of a national health care system.
Mr. Johnson?
Mr. JOHNSON. I don't have any questions.
Chairman JOHNSON. Mr. Crane?
Mr. CRANE. Thank you. This is a question I would like to
direct to all of you, and that is what is a reasonable timeline
for the implementation of e-prescribing standards and what are
the chances that a rush to implement these new standards will
result in unintended consequences that could impact patient
care or limit access to health care services, especially
patients in less-urban or rural communities?
Dr. SULLIVAN. I would like to address that. Again, this is
somewhat my personal opinion. I probably would not change the
timeline now. I would change the incentives. By that I mean, if
the incentives are there and the safeguards are there,
physicians--and I think others--will adopt these far sooner
than you want for the timeline, but I am afraid that the
incentives and the things that aren't properly aligned just
don't make this easy right now. So, I wouldn't change the
timeline, but I think I would change the incentives, and that
would get these adopted much faster.
Mr. McLEAN. I would say to that the standards that we have
established already, whether that is RxHub or SureScripts,
particularly related to the connectivity with the payer
industry and the pharmacy industry, is that we already are
operating today with those standards. So, I would emphasize we
don't need to go backward on that. Let us take what is already
there and push forward. I think many of the things that Dr.
Teich has talked about that still needs to be worked out, that
is probably where the remaining effort needs to be spent, but I
would certainly encourage CMS and HHS not to redo or take apart
what is already there and working.
Dr. TEICH. I would go somewhat the same way. There is an
incremental path. You can do something with what we have. You
could do a little more with what we could do in 12 to 18
months, and you could do all sorts of things with what we could
do in all sorts of time. Of the five items that I mentioned in
my testimony, which all are things that we don't have in place
right now, you can do adequate work right now, but you don't
get a lot of the advantages. The ones that I mentioned could be
developed certainly within a 12 to 18 month timeframe,
certainly depending on how many people had to be thrown into
the mix. Implementation, ideally, could be as soon as possible.
Perhaps implementation takes a little longer than development,
but these aren't really ones that would be highly controversial
to be produced. They just need to be produced and has to have
the first advantage out there. Just like the CCR, once
something comes out there that is reasonably good, it can be
reasonably used while we are waiting for the next great step.
Mr. FULLER. I really am in agreement. I couldn't agree more
that we have some very good standards in place now that we have
worked on in the private sector. We collaborate with government
all the time. We are continuing that collaboration, as they
look at new standards. I tend to think, though, that
acceleration is a good idea. I think that we are much closer to
the proverbial tipping point than some may believe. I think
that pushing us forward--and I mean that by encouraging more
collaboration the way Mr. Stark did--is a good thing.
We have to be cautious of making wrong moves. As I
indicated earlier, I think we have to be cautious that we don't
try to accomplish everything everybody wants with a set of
standards that makes us too complex for the practitioner to
actually use, whether it is a physician, pharmacist or PBM. I
think we have got a lot that has been accomplished. Moving up
on the timeline that tipping point can greatly accelerate
physician adoption, and from there we can add new and more
features, which is one of the beauties of this. There really
are lots of opportunities, once we get the connectivity that we
have been working to achieve.
Mr. CRANE. Yes?
Dr. TEICH. I was just going to say I was one of the ones
who testified early in the NCVHS hearings, and certainly they
are charged to produce standards, but it is important not to
take that task so broadly that they don't stop until they have
a few good ones already going.
Dr. SULLIVAN. Also, I actually had to lobby quite a bit
this past year to change the law in Massachusetts because we
had this handwriting requirement for handwritten signatures.
So, if you are going to accelerate the timeline, I think you
better be prepared to override some of the tremendous variation
from State to State. Now, I will say it is getting better, but
it was a very difficult job to lobby the House, and the Senate
and the administration in my own State. Everybody saw the win-
win for e-prescribing, and so they ultimately did it.
One thing that you could do is help the U.S. Drug
Enforcement Administration (DEA) get to be truly electronic. I
know that is more on the Administration side, but they have
been dragging their feet, in my opinion, for the last 4 years.
I have helped the American Medical Association represent them.
We are trying to get DEA to be more electronic, in terms of
prescriptions for controlled substances.
Mr. CRANE. Thank you. I yield back the balance of my time.
Chairman JOHNSON. Thank you very much. It is impressive
that 80 percent of the commercially insured market is connected
into RxHub and that, Mr Fuller, you mentioned that 70 percent
of the scripts already flow through SureScripts and RxHub. So,
we have a lot going on. We have enormous capability. My concern
about standards, which you have all emphasized, is that you
have done a good job of developing standards for e-prescribing.
I think my understanding of what the Administration is trying
to do is make sure that those standards end up being
appropriate for, in a sense, the building blocks of an
interoperable system, including electronic health records. So,
we want to be sure that we preserve what you have done, but we
build upon it.
This data conversion issue, while formidable for the
Medicare population at least, through the billing process, we
actually have an enormous amount of e-records. I have people
show me electronic health records that are basically government
information organized appropriately, but without the detailed
notes.
So, this will be a process. It will be a multi-year
process, but I appreciate your being here today to help us get
a better handle on how we can push it forward. This
Administration has been more aggressive than government has
ever been in pushing forward the development of electronic
capability in any sector of the economy. Normally, it has come
from that sector. In this case, the sector is so fractured by
millions and millions of small participants that it really does
require a public-private effort to achieve the goal that
actually Pete was part of achieving in the world of financial
management and banking. So, thank you very much. We appreciate
your being with us, and we invite you to offer us your thoughts
as we move forward and you watch things develop. Thank you very
much.
[Whereupon, at 2:33 p.m., the hearing was adjourned.]
[Submissions for the record follow:]
Statement of American College of Physicians
The American College of Physicians (ACP), representing over 116,000
internal medicine physicians and medical students, is pleased to
provide written comments on Standards for e-Prescribing. Specific ACP
recommendations on e-prescribing are provided beginning on page 8.
E-prescribing's impact will be constrained by the degree to which
all health care system players can communicate with each other
electronically. Optimal impact will only be achieved when every
physician, clinic, hospital, nursing home, laboratory, health plan, and
payor can seamlessly transmit medical information electronically in
uniform languages and formats. Attainment of this ideal is the very
definition of an interoperable health information infrastructure, a
goal ACP not only supports along with the Department of Health and
Human Services and several legislators, but is also actively pursuing
through participation in key demonstration programs such as the Doctors
Office Quality--Information Technology demonstration project
(implementing Section 649 of the Medicare Modernization Act of 2003).
In furtherance of ACP's advocacy of bringing advanced
communications technology to the physician's office, including e-
prescribing, the College has recently published a series of three
papers * related to this subject. The three papers are listed at the
end of this testimony and can be found on the ACP website at: http://
www.acponline.org/hpp/menu/med_tech.htm.
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* Three ACP Papers Referenced on Page 1 of Testimony:
(Available on ACP website at: http://www.acponline.org/hpp/menu/
med_tech.htm.
[1] Enhancing the Quality of Patient Care Through Interoperable
Exchange of Electronic Healthcare Information (April 2004).
[2] The Paperless Medical Office: Digital Technology's Potential
for the Internist (March 2004).
[3] The Changing Face of Ambulatory Care--Reimbursing Physicians
for Computer-Based Care (March 2003).
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Our comments will address the areas of e-prescribing's potential
benefits, practical and technical barriers to wide scale e-prescribing
adoption, ways to make e-prescribing appealing to physicians without
adding to practices' administrative burdens, and the need to assure
that e-prescribing medication decisions are not driven by proprietary
interests.
1. E-Prescribing's Potential Benefits
The many benefits of using e-prescribing, in terms of reduced
medication errors, improved quality of care, enhanced administrative
efficiency, and lowered costs, clearly justify efforts to expand use of
e-prescribing systems.
In the eHealth Initiative's April 14, 2004 report: Electronic
Prescribing: Toward Maximum Value and Rapid Adoption, there is clear
evidence that many untoward drug events are avoided by use of
integrated e-prescribing/electronic health record (EHR) systems,
averting the associated costs of such drug caused morbidity and
mortality. The report indicates that out of 8.8 million adverse drug
events which occur each year, over 3 million of these are preventable.
Medication errors also account for 1 out of 131 ambulatory care deaths.
With over 3 billion prescriptions written each year, the report shows
that e-prescribing, if universally adopted in the United States, could
save $27 billion annually. Some of these savings would come from
prevention of adverse drug events, while the majority of savings would
result from better utilization of drugs, through guidance from
formulary information included in e-prescribing systems. Any short term
start-up costs associated with widespread adoption of e-prescribing
technology should be quickly offset by significant cost avoidance
related to misadministration of medications. Other potential benefits
could be lowered physician malpractice insurance premiums and higher
levels of patient confidence and satisfaction.
2. Practical and Technical Barriers to Wide Scale E-Prescribing Adoption
a.
Need for a Universally Accepted E-Prescribing Drug Classification and
Coding Nomenclature
For e-prescribing to be adopted on a wide scale, there must first
be a universal drug classification and coding nomenclature that is
accepted throughout the U.S. health care system.
ACP understands that current day e-prescribing systems can range
from the limitations of a stand-alone personal digital assistant (PDA)
with basic formulary and prescription generating software, to
sophisticated systems which are fully integrated with EHR and clinical
decision support software. These advanced systems are potentially able
to conduct two way electronic communications with pharmacies, other
physicians and providers, laboratories, health insurers, and pharmacy
benefit management organizations. However, at this point in time, two
way electronic transmission of patient medication information is a
rarity. This is why it is vital that core uniform e-prescribing
standards, as called for by the Medicare Modernization Act, be simple
and as easy to implement as possible. These standards also need to be
easily adaptable from the simplest to most complex of health care
settings and must accommodate existing e-prescribing systems without
necessitating major software changes, staff retraining, or increased
costs. It is also critical that use of e-prescribing systems be
transparent to both physician and patient, and enhances rather than
distract from the process of patient care.
The current National Council for Prescription Drug Programs (NCPDP)
script codes for medications has been accepted as the best available
code set available; however, the current NCPDP script codes are not the
final solution for bringing simplicity to the identification of
medications. In fact, NCPDP has different proprietary codes for every
unique product for each pharmaceutical manufacturer, meaning that
something as simple as aspirin would have several unique codes due to
dosage of each pill and number of pills per package. Another
manufacturer of aspirin would have an entirely different set of codes
for the same dosages and package sizes, so there is no easy way for a
physician to evaluate medications using the current NCPDP script codes.
To try to overcome this unnecessary complexity, the federal
government has undertaken a major effort to develop a simplified,
unified system of e-prescribing, known as RxNorm. While RxNorm does
allow specification of a particular drug's ingredients, dosage, and
form (pill, patch, tab, etc.), this new system does not go far enough
in allowing a physician to specify critical details of his/her choice
of patient medication. Specifically, this includes if a drug should be
provided in a compliance packaging form (e.g., certain steroids have to
be taken on a strict and reducing dosage regimen), whether certain
allergic ingredients such as gluten must be avoided, and what flavoring
a child's prescription must have to ensure the child complies with
taking the medicine.
There are other gaps in the present NCPDP and RxNorm standards that
must be addressed. Standardization of the required data elements
(``sig'') is necessary to create an electronic prescription. These
elements must include the ability to give directions for specific
medications in oral or topical form and in various dosing patterns.
There is also a need to standardize specifications of allergy
groups, drug interaction groups, etc., so there is consistency as one
changes to different applications that use different commercial
dictionaries.
Encouragement is needed for unification of varying state
regulations concerning the proper format of a prescription as well as
unifying standards, terms, and structures used by formulary information
service providers.
The resulting standards also need to include a single set of
messaging standards that is reconciled with developing HL7 conventions,
and can continue to grow and develop to meet future business needs.
In short, ACP encourages the development of a nationwide system
expanding upon the efforts of RxNorm to meet the above needs but also
avoiding the excessive complexity of NCPDP script codes.
b.
Overcoming Acquisition Cost Barriers and Encouraging Physician Acceptance
of Change
Adoption of e-prescribing technology can best be encouraged by
providing the strong financial incentives needed to take the sting out
of taking on this new technology's substantial acquisition and start-up
costs. The source of these incentives should be the federal government
and health plans which will ultimately be rewarded for this investment
in the long run as savings are generated by e-prescribing systems. This
will be particularly crucial in light of Medicare projections of eight
years of physician payment cuts between 2006 and 2013, amounting to a
40 percent pay cut relative to 2005 reimbursement rates. As such, ACP
applauds the initiative of health plans such as WellPoint Health
Networks, which will soon offer free e-prescribing software to its
19,000 participating physicians.
As more and more physicians make the move to e-prescribing, it will
be hard for the rest of the medical universe to resist coming on board,
as both doctors and patients clamor for the therapeutic accuracy and
quality improvement only e-prescribing can provide.
In addition, standards for e-prescribing must take into account the
wide variety of clinical settings and specialties and should be
flexible and scalable to reflect a practice's size and prescribing
volume. Since universal e-prescribing is likely to precede achievement
of a national interoperable health information infrastructure, e-
prescribing standards must allow for basic stand alone electronic
prescribing platforms used by smaller practices, as well as more
sophisticated integrated EHR/clinical decision support/practice
management/e-prescribing systems used by larger group practices and
health systems. Most importantly, the physician-patient relationship
must be enhanced, not impaired by this new technology.
c.
Careful Pilot-Testing of E-Prescribing to Assure Smooth Operability in All
Health Care Environments
E-prescribing system prototypes should be carefully pilot-tested in
a wide array of clinical settings, including small independent
community-based physician practices, to ensure e-prescribing works
smoothly in all environments. Settings should be both urban and rural,
and include the particularly difficult situation where integrated
information networks are essentially non-existent and must be
developed. The process of development and testing must have the active
input of all affected providers and insurers, with cooperative standard
setting, and voluntary participation of physicians. Once final
standards are decided upon, implementing regulations should provide
ample time for those choosing voluntary e-prescribing to come into
compliance, avoiding the implementation problems currently experienced
with the Electronic Transactions and Code Sets rule under the Health
Insurance Portability and Accountability Act.
d.
Compliance with Final HIPAA Security Standards and Drug Enforcement Agency
(DEA) Requirements
Any e-prescribing standards developed must address many issues in
the final HIPAA Security standards, due to be implemented in 2005,
including what physical safeguards are necessary to guard data
integrity, personal authentication, encryption, and patient
confidentiality. E-prescribing standards must also address how access
to DEA-controlled drugs will be restricted, since many states currently
only allow such prescriptions to be written through use of a triplicate
(or other special paper) prescription order.
3.
Issues Critical to E-Prescribing Adoption by Physicians
ACP believes that, for e-prescribing to have widespread acceptance
and adoption amongst physicians, this new technology must prove itself
as speedy or efficient as filling out a paper script, and hold other
advantages not possible with a paper-based system. One absolutely vital
component for raising the value of e-prescribing in assuring patient
safety and quality is integration with EHR and clinical decision
support software. Such an integrated system can help physicians choose
the right drug and dose for a patient, based on data already contained
in the EHR and patient medication history.
ACP is a leader in the development and dissemination of evidence-
based electronic clinical decision support tools, with its Physician
Information and Education Resource (PIER), which can be integrated with
EHR/e-prescribing software. PIER offers over 300 modules focusing on
the diagnosis and treatment of diseases including: a comprehensive, in-
depth drug database; a convenient search engine and bookmark features;
evidence indicators and standard tables; and the latest clinical
information culled from the medical literature. PIER is also available
in a PDA format already integrated with some e-prescribing systems
presently available on handheld computers. PIER is meant to be a
helpful guide to physician decisions and, as should be the case with e-
prescribing advice, is never intended to mandate a physician's or
patient's final choice of treatment or medications.
ACP fully recognizes that adoption of e-prescribing technology will
not be without its growing pains. The vast number of different e-
prescribing systems and languages presently in use make interoperable
communication among health system components a still distant goal at
this time. One ACP member in Maine noted that, although his 25 member
group practice had the capability of sending prescriptions
electronically to local pharmacies and pharmacy benefit management
organizations, virtually no capability exists at the receiving end to
accept e-prescriptions and e-signatures. Instead, about 75% of
prescriptions must be electronically faxed to the receiving
organizations, while the remaining 25% must be printed out as a paper
prescription which patients must carry to their pharmacies. The
practice estimates printing out prescriptions administratively adds
about $1 to the cost of each prescription.
ACP member physicians who previously tried e-prescribing systems
also report difficulty with accuracy of formulary information. Many
times the formulary information is not kept current with the rapid
changes made at the health plan level and physicians' offices remain
burdened with phone calls from pharmacies asking for changes because
health plan formulary changes have not yet made it through to the e-
prescribing software. Other ACP members say they still believe writing
out a prescription by hand is faster than doing it on a computer, so
winning converts to the advantages of this new technology will be a
major challenge for the medical industry in the years ahead.
ACP believes the following key areas must be addressed to ensure e-
prescribing is widely accepted and used by physicians, and does not
create new, counter-productive administrative burdens.
a.
Immediate Electronic Access to All Medication and Patient-Specific
Information
To gain the support of the physician community, the e-prescribing
system must provide all information a physician requires for reaching a
fully informed, optimal clinical decision for the patient, as well as
accommodating patient insurance coverage and cost considerations. This
means having complete and current formulary information which shows all
available medications for a particular condition, including therapeutic
substitutions and generic alternatives. Prices for all medications and
whether or not a patient's insurance plan provides coverage must also
be available online, so that a physician can choose the lowest cost
alternative for each patient. This information must be kept up to date
and in full agreement with the latest formulary information used by
pharmacies and health plans.
The e-prescribing system must also provide a patient medication
profile that includes prescriptions from all pharmacy sources and all
physicians in a single unified view. The system would provide a list of
every individual prescription filled for a given patient by any
pharmacy and any physician within a specified timeframe from most
recent to least recent and also indicate which prescriptions have been
discontinued. In addition the e-prescribing system must be dynamically
updated and bi-directionally linked to the physician office medical
management system and the most current health plan formularies to
eliminate the need for double entry of information such as insurance
and demographic information.
b.
Non-Interference in Physician Medication Choices
It is critical that the e-prescribing system not include elements
that would permit payors and pharmacy benefits managers to pressure
physicians to prescribe a different therapy or medication than what the
physician concludes is best for a particular patient based upon
scientific evidence and knowledge of the patient's medical history.
c.
Real Time Online Medication Prior Authorization Adjudication
One absolutely crucial element of an effective e-prescribing system
is inclusion of a real time, online prior authorization adjudication
process for physicians with insurers, health plans, and pharmacy
benefit management organizations. Physicians will be discouraged from
using e-prescribing systems if, every time there is a dispute over
coverage/payment for a prescribed drug, they are forced to make a
lengthy phone call to get approval, or fill out additional paperwork to
override an initial denial. Such tactics intentionally frustrate
physicians, forcing them to use the payors' lower cost choices, rather
than make the best therapeutic choice for their patients. If the
federal government truly wants e-prescribing to have broad acceptance
and usage in the physician community, rapid online decisions for prior
approval medications must be a cornerstone of all future e-prescribing
systems.
4.
Need to Assure that E-Prescribing Medication Decisions Are Not Driven by
Proprietary Interests
To create a universally beneficial e-prescribing system, the drug
classification and coding systems, as well as prescribing databases
must be free of commercial bias. ACP is concerned that the current
multiple drug classification, vocabulary, and database systems in use
are often proprietary, designed to optimize profits of manufacturers,
pharmacy benefit managers, and health plans rather than provide the
medically best and cost-effective drug a patient needs. One major
loophole in the Medicare Modernization Act of 2003 is that even though
the U.S. Pharmacopoeia is charged with developing a single drug
classification system, payors are not required to use it. Payors can
consolidate or expand drug classification categories as they see fit,
which will allow formulary comparisons and physician prescribing
patterns to be inappropriately influenced. Clearly, all parties
involved with the manufacture, sale, distribution, and prescription of
prescription drugs should work with a consistent classification system
free of commercial bias to permit fair, objective comparison of drug
costs and benefits.
Summary
The coming revolution in electronic health information technology
is one that will benefit all, simultaneously raising health care
quality, lowering costs, and expediting the process of care. Accruing
evidence shows that e-prescribing has the greatest potential to improve
patient care substantially and quickly, which is why it must be a top
priority as the nation moves from a fragmented, multi-system, primarily
paper-based approach to a unified electronically-based system for
handling patient medications. As such, ACP lends its hearty support to
this worthy endeavor and is willing to actively participate in e-
prescribing and national health information infrastructure pioneering
efforts.
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ACP e-Prescribing Recommendations
Following is a set of ACP recommendations aimed at encouraging
expanded adoption of e-prescribing throughout the U.S. health care
system:
1. There should be a single universal vocabulary and
classification system for prescription drug information that must be
developed and maintained in a manner that is free of commercial bias so
that prescription drugs can be accurately used and compared.
2. The health care industry should support the widespread
adoption and further enhancement of RxNorm to provide a consistent,
easily used, drug vocabulary that includes:
a.
a specification system of drug active ingredients, dosage,
and route of administration expanded to include inactive ingredients;
b.
standardization of required data elements (``sig''), drug
dictionaries and state regulations concerning the proper format of a
prescription;
c.
a single set of messaging standards that is reconciled with
developing HL7 conventions that can continue to grow and develop to
meet future business needs.
3. Due to substantial evidence showing e-prescribing systems have
a major and immediate impact on averting adverse drug events and
associated costs, first priority in developing a national health
information infrastructure should be placed on developing uniform
standards for e-prescribing, and providing sufficient federal support
and financial incentives to ensure all providers adopt and utilize e-
prescribing systems.
4. Development of e-prescribing standards and software should be
a voluntary, cooperative process between the federal government and
health care industry, with the goal of ensuring buy-in of all affected
parties to expedite implementation once universally accepted standards
are achieved. Standards developed should be easily adaptable to
existing e-prescribing systems, with minimal disruption and cost while
also having the flexibility to meet future business needs.
5. To have maximum impact on quality of care, e-prescribing
systems must be designed so they can be easily integrated with
electronic health records and clinical decision support software.
6. To ensure that e-prescribing systems can work at the national
level, they should first be pilot tested in a wide array of health care
settings and environments to identify and correct any technical
problems that would undermine widespread implementation.
7. In designing and pilot testing e-prescribing systems, to win
provider support, it is vital that objective data be collected that
clearly demonstrates such systems not only avert medication errors, but
also save providers time and money over pre-existing systems.
8. Even after pilot testing has proven successful, national
adoption of e-prescribing systems should not be rushed, giving
voluntary providers sufficient time to acquire the necessary software
and hardware and communications networks, as well as time to become
familiar with and confident in using the new systems. Implementation
timelines should allow ample time to make all necessary adjustments and
allow sufficient time for training and system testing before going
live.
9. The physician's responsibility to make patient care decisions
and prescribe medications, based on his or her clinical expertise and
experience, must be preserved. Electronic health record (EHR), e-
prescribing, and other e-health technology must be designed to
facilitate access to unbiased and evidence-based decision support
tools.
10. EHR and e-prescribing systems must dynamically/bi-
directionally link to the physician office medical management system,
reducing the need for double entry of information such as insurance and
demographic information.
11. Insurance companies must place clear formulary codes on
insurance cards and e-prescribing systems so that formulary checking
can be seamless and accurate and up to date with the most recent
formulary requirements.
12. E-prescribing systems:
a.
Must provide a patient medication profile that includes
prescriptions from all pharmacy sources in a single unified view. The
system would provide a list of every individual prescription filled for
a given patient by any pharmacy or physician within a specified
timeframe from most recent to least recent and indicate which
prescriptions have been discontinued.
b.
must be dynamically updated with the most current health plan
formularies.
c.
must conform to the final HIPAA Security standards, due to be
implemented in 2005, and address issues such as what physical
safeguards are necessary to guard data integrity, personal
authentication, encryption, and patient confidentiality, as well as
addressing the impact of e-prescribing on access to DEA-controlled
drugs, which can only be provided through a triplicate (or other
special paper) prescription order in many states.
d.
must not be used as a means for payers and pharmacy benefits
managers to pressure physicians to prescribe a different therapy or
medication than what the physician concludes is best for a particular
patient based upon scientific evidence and knowledge of the patient's
medical history.
e.
must have a real time online prior authorization adjudication
process for all physicians' prescriptions.
Statement of America's Health Insurance Plans
America's Health Insurance Plans (AHIP) is the national trade
association representing the private sector in health care. Our nearly
1,300 member companies provide health, long-term care, dental, vision,
disability, and supplemental coverage to more than 200 million
Americans.
AHIP and our member companies applaud Congress for enacting
legislation encouraging the development of uniform standards for
electronic prescribing. We believe that the electronic prescribing
initiative authorized by the Medicare Modernization Act of 2003 (MMA)
is an important step toward developing an overall health information
infrastructure.
The MMA mandated the development of standards for electronic
prescribing for the new Medicare Part D prescription drug program. We
believe these standards will have a significant impact on the
application of electronic prescribing in physician offices, hospitals,
and pharmacies. We appreciate this opportunity to provide our views and
recommendations on electronic prescribing issues.
According to estimates from the Centers for Medicare and Medicaid
Services (CMS), approximately 32.2 million Medicare beneficiaries will
be enrolled in Part D beginning in 2006. The electronic prescribing
standards will impact the relationship between these beneficiaries and
their treating health care providers. It is vital, therefore, that the
standards promote the delivery of efficient, safe, and high quality
health care. The electronic prescribing standards adopted by the
Department of Health and Human Services (HHS) will also strongly
influence the development of similar standards for private sector
health care.
This statement discusses the experience of some of AHIP's member
companies in encouraging the use of information technology for pharmacy
benefit activities. It also includes recommendations for electronic
prescribing standards that we are submitting to the National Committee
on Vital and Health Statistics (NCVHS). The NCVHS is charged with
advising HHS on the development of requirements for electronic
prescribing standards.
Health Insurance Plan Pharmacy Initiatives
Health insurance plans have taken the lead in building the
information infrastructure necessary for translating pharmacy data into
better patient care. Many of AHIP's member companies utilize web
portals to allow individual members access to their pharmacy-related
personal information, including pharmacy claims, benefits information,
up-to-date formulary listings, and online search tools to find
participating pharmacies by zip code or geographical area. Some health
insurance plans also allow members to fill or refill prescriptions
online, send questions electronically to a pharmacist about their
medications, and purchase over-the-counter medications online at
discounted prices.
A number of AHIP's member health insurance plans are working with
health care providers to incorporate everything from comprehensive
electronic medical record and electronic prescribing programs to
handheld devices and other software and hardware prescribing
applications for use in provider offices. Health care providers are
able to use this technology to view a patient's medication history,
diagnosis, formulary information, or allergies at the point of
prescribing and can either print the prescription or send it directly
to the pharmacy electronically.
These efforts demonstrate our members' commitment to the
development of electronic prescribing technologies at the point of
patient care.
Practical Considerations for Electronic Prescribing Standards
We have urged the NCVHS to include the following considerations
when developing its recommendations for electronic prescribing
standards.
Standards Must Allow for Formulary and Benefits Information to be Made
Available to the Prescribing Health Care Provider at the Point
of Service
It is critical for health care providers and their patients to have
all of the information needed to make decisions about health care--
including information about cost and benefits coverage for prescription
drugs and about potential drug interactions. The MMA specifically
requires that the standards inform the prescribing health care
professional and the pharmacy and pharmacist regarding ``information on
eligibility and benefits (including drugs included in the applicable
formulary, any tiered formulary structure, and any requirements for
prior authorization) . . .'' In addition, the standards must provide
information about ``the availability of lower cost, therapeutically
appropriate alternatives (if any) for the drug prescribed.''
Consumers need to be able to access information about their covered
benefits and financial responsibility at the time a prescription is
written. This information must include whether a prior authorization is
required, applicable formulary information, any reasonably estimated
co-payment or cost-sharing amounts that will be the patient's
responsibility, and whether less costly, therapeutic alternatives are
available. Providing this information allows the prescribing health
care provider and his or her patient to discuss the full range of
prescription drug therapies available for treatment. In addition,
electronic prescribing can improve the quality of care by giving
providers information on potential drug interactions and other clinical
decisionmaking support. The standards should allow for such functions.
AHIP recommends that electronic prescribing standards provide
access to health benefits and formulary information, as well as
appropriate decision support, at the point of patient care. This
information should include whether a prior authorization is required,
applicable formulary information, any reasonably estimated co-payment
or cost-sharing amounts that will be the patient's responsibility, and
whether less costly, therapeutic alternatives are available. Standards
should also allow information about drug-to-drug interactions and other
clinical decisionmaking support.
The Standards Process Must Be Flexible
Health care providers and health insurance plans have invested
significant resources over the past few years in implementing standards
for electronic health care transactions and code sets required by the
Health Insurance Portability and Accountability Act (HIPAA). This
process has provided a number of important ``lessons learned'' that are
applicable to the development of electronic prescribing standards.
One of the criticisms of the HIPAA standards process is that it
applies formal agency rulemaking to standards that may need to be
modified to meet a changing business environment. The HIPAA process
requires any new standards or modifications to first be approved by a
Designated Standards Maintenance Organization (DSMO), then submitted
for review by all other DSMOs, then reviewed and approved by the NCVHS.
At that point, the standard is recommended to HHS, which must publish a
proposed rule, accept public comment, and after consideration of those
comments, release a final rule.
This process requires a significant amount of time before a new
HIPAA standard can be introduced or an existing standard is modified.
Imposing a similar process for adopting electronic prescribing
standards could lead to a number of administrative and operational
difficulties because the standards would not keep pace with changing
business needs.
AHIP believes that a flexible, streamlined process must be
implemented for adoption and modification of the electronic prescribing
standards.
Pilot Testing of the Standards is Critical
Another important lesson from the HIPAA experience is the need to
submit any standards to rigorous testing before proceeding to
implementation. Testing standards under ``real world'' conditions will
help determine if any changes are needed before the standards are
implemented system-wide.
The MMA includes a requirement that the new electronic prescribing
standards be pilot tested under HHS direction unless there is adequate
industry experience with such standards. We believe that pilot testing
is critical to the success of electronic prescribing standards and
should be required for all proposed standards, including those
currently in use by some health insurance plans, health care providers,
and pharmacies.
The Medicare Part D program establishes a unique set of cost-
sharing and other requirements which are not applicable to private
sector business. A standard that has been successfully used for the
private sector may not satisfy the Medicare Part D requirements. Pilot-
testing is necessary to determine whether any proposed standard,
regardless of its prior industry experience, will meet the Medicare
Part D requirements.
AHIP believes that any electronic prescribing standards must be
pilot tested before final adoption of HHS.
Initial Stages: Evaluation of Standards
Incorporating new technology into physician practices requires a
significant amount of preparation, administrative resources, and
training. In order to encourage adoption, electronic prescribing
standards must be kept simple and easy to understand. When possible,
existing standards, such as those developed by the National Council on
Prescription Drug Progress (NCPDP) or by the American National
Standards Institute Accredited Standards Committee X12 (ANSI ASC X12),
should be used rather than creating an entirely new standard. In
addition, the standards should outline minimum functionally
requirements, instead of mandating proprietary formats.
The NCVHS ``Work Plan'' includes a number of standards requirements
for consideration that go beyond those set out in the MMA. While it may
be appropriate in the future to include this additional information in
the electronic prescribing process (for example, information about
prescription drug-to-lab test cross checks), the initial standards
should be limited to the MMA's specific requirements. It is more
important to get the basic components of electronic prescribing right
at this early stage than to impose additional information requirements.
AHIP recommends that the initial electronic prescribing standards
developed by the Secretary be limited to the specific information
requirements set out in the MMA.
Standards Must be Compatible with Other E-Health Requirements
Health insurance plans and health care providers are subject to the
HIPAA transaction standards which set out requirements for basic health
care transactions such as claims, enrollment, and payment. Other HIPAA
administrative simplification rules govern the security and privacy of
information exchanged between health care providers, health plans and
insurers, and health care clearinghouses.
The health care community is also engaged in a wide range of
initiatives related to the development of electronic health records,
interoperability standards, and increasing use of information
technology in the delivery of health care. The electronic prescribing
standards that the Secretary will eventually adopt should not be
considered in a vacuum; they must fully complement these other
regulatory requirements and health information initiatives.
AHIP recommends that the electronic prescribing standards be
consistent with existing regulatory requirements imposed on health care
providers and health insurance plans by the HIPAA standards for
electronic health care transactions, health information privacy and
security. To the greatest extent possible, the electronic prescribing
standards adopted by the Secretary should use, or be based on, existing
standards that are widely accepted in the health care industry. In
addition, we believe the Secretary must make sure that the standards
that are adopted are compatible with ongoing efforts by the health care
community to develop and implement electronic health records and
interoperable health information systems.
Conclusion
AHIP and its member health plans and insurers strongly support the
development of a uniform set of standards for electronic prescribing
for the Medicare Part D program. We believe these new standards will
improve the quality and efficiency of health care provided to Medicare
beneficiaries and will encourage the development of electronic
prescribing processes in physician offices, hospitals, and pharmacies.
Statement of the American Osteopathic Association
The American Osteopathic Association (AOA), which represents the
nation's 54,000 osteopathic physicians, would like to take this
opportunity to thank Chairwoman Nancy L. Johnson and members of the
Subcommittee for holding this important hearing on the adoption of
standards and technologies for electronic prescribing. Your commitment
to improving the health care delivery system is commendable. The AOA
supports initiatives aimed at improving the quality and safety of care
available to our patients. E-prescribing offers a unique opportunity to
improve the quality of patient care and increase efficiency in the
disbursement of prescriptions.
While technology impacts almost all aspects of our daily lives, a
number of barriers remain to the utilization of technology in writing
prescriptions and ultimately the development of comprehensive
electronic health records. Enactment of the ``Medicare Modernization
Act'' (MMA) (P.L. 108-173) served as an important catalyst in the
development and utilization of e-prescribing standards and
technologies. Adverse events occur each year as a result of drug
interactions or illegible handwriting on prescriptions resulting in a
patient taking incorrect medication. In light of the technologies
currently available and the continual creation of new technologies,
there is little reason not to employ such technologies that stand to
improve patient care.
As a result of the MMA, the Secretary of the U.S. Department of
Health and Human Services (HHS) must develop uniform e-prescribing
standards. These standards require that patient and medication
information be available at the point of care. Due to this requirement,
a number of stakeholders actively became involved in the development of
standards and technology. In the end, it is the patient who will
benefit from a system that will improve the quality and efficiency of
health care. Implementation of e-prescribing will help reduce the
occurrence of adverse events and improve the safety and efficiency of
medicine. A safe and efficient health care system benefits everyone.
The AOA recently adopted guiding principles on e-prescribing. These
principles serve as the framework for the development and adoption of
electronic prescribing standards and technology. Specifically, the AOA
set forth seven core provisions that we believe should be present in an
e-prescribing system. Application of these principles will assist our
physicians in providing the highest possible level of care to our
patients:
Safety: The units used to prescribe electronically should
clearly show safety alerts. These alerts should be distinguishable from
advertisements. In our opinion, advertisements adversely impact
efficiency and offer no clinical benefit.
Privacy: Privacy of the patient must be protected.
Information on patients' medications should be current, comprehensive,
and compliant with standards set forth in the ``Health Insurance
Portability and Accountability Act'' (HIPAA).
Transparency: All third party involvement in an
electronic prescribing system must be clearly identified.
Design: The development of any system must ensure that
the physician-patient relationship is protected to ensure that doctors
in conjunction with their patients dictate the care, not computer
software. In addition, the system must be designed in a manner that
ensures that new health care errors are not introduced into the health
care delivery system.
Integration: Systems should be proven and integrated into
existing health information technology. E-prescribing can be an
important component of a larger electronic medical record.
Scalability: Any standards should be broad-based and
applicable to all health care delivery systems.
Timing: Standards should be implemented in a manner that
allows software vendors and physicians adequate time to become
compliant. In addition, we strongly advocate for broad testing of
technologies and standards to ensure efficiency and effectiveness.
This hearing furthers an important dialogue. The AOA stands ready
to work with you and the members of the Subcommittee to ensure the
development of e-prescribing standards and technologies that are
designed and implemented to enhance the quality of care our patients
receive and assist with the efficiency of delivering health care
services. While the AOA agrees e-prescribing increases safety and
efficiency and potentially lowers the costs of health care, we do not
believe that this should come in the form of additional unfunded
mandates on physicians. E-prescribing offers great potential if all
interested parties remain part of the process.
Statement of Tom Doerr, Wellinx, Saint Louis, Missouri
An Electronic Prescribing System with Integrated Decision Support
Information Substantially Reduces Medication Costs
Thanks for the opportunity to present information to your
Committee. My name is Tom Doerr. I am a physician with a part-time
Internal Medicine practice that is limited to Medicare beneficiaries. I
am also one of the two physicians who founded Wellinx, an electronic
prescribing company.
Physicians direct about 70% to 90% of spending in the $1.8 trillion
health care sector of the U.S. economy.1,2,3 As a rough
calculation, every thousand physicians makes about $2 billion of
spending decisions annually. Yet the information brought to these
decisions is often profoundly inadequate. The prices of medications,
tests and procedures are not transparent to physicians or patients, nor
is adequate information about the relative effectiveness of the
alternatives available at the time and point of thought where these
decisions are made.
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\1\ Baker, Michael J. estimated that physicians have 70% of the
spending authority in health care in Pharmacy Benefit Management: A
Prescription for Controlling Health Care Costs, Raymond James &
Associates, Raymond James Financial Center, 880 Carillon Parkway, St.
Petersburg, FL 33716, December 29, 1999.
\2\ Maynard D. Poland published the estimate of 80 to 90% in 1999.
http://www.wisconsinmedicalsociety.org/uploads/wmj/poland.pdf.
\3\ Diede, Mick L. Diede and Richard Liliedahl estimated that
physicians direct 70% of health care spending in Managed Care, February
2002. None of these three sources presented any data to substantiate
their estimates.
---------------------------------------------------------------------------
Wellinx was founded to bring context-specific, evidence-based
information into physician decision processes. The first application
was an electronic prescribing tool. The Wellinx system is diagnosis-
driven, meaning that the physician first enters the diagnosis he/she is
treating and this then drives the presentation of information relevant
to that condition. The Wellinx team of pharmacists and physicians
summarizes clinical best practices through reviews of clinical trial
results and published, evidence-based guidelines. They then integrate
these best practices into the physician's workflow in a convenient,
usable way.
In many cases, the weight of the evidence favors selection of
older, well-studied drugs, often available in generic form. This
evidence-based approach drives measurable improvements in patient
outcomes.
The Wellinx Electronic Prescribing System
Wellinx implemented this diagnosis-driven electronic prescribing
system at Esse Health, a 70-physician group in Missouri, several years
ago. We measured a significant improvement in prescribing behavior in
that group.
Thereafter, we studied the impact of this system in a controlled
trial that included 38 physicians practicing in an Integrated Delivery
Network in Wisconsin. Compared to the control group, the costs for new
prescriptions and their refills decreased by 8% ($572 per doctor per
month) in the intervention group during the first six months that they
used the system. During the next six months of use, the costs to the
payer were reduced by 15% ($1,062 per doctor per month) compared to
controls. Almost identical improvements were observed after the system
was implemented in the control group in that IDN. Overall, the payer in
this study measured their return on investment to be around six to one
in the first year.
The results of this study have been accepted for publication by the
Annals of Family Medicine and are currently in press. It is important
to appreciate that the full impact of the savings in pharmacy costs
were probably not realized in the first year of that study. As the
system is used for a longer period of time, a progressively greater
percentage of patients in that doctor's practice get new prescriptions
guided by this system. Refills of these new, more appropriate
medications compound the savings. Table 1 shows the measured results
and projected savings over a two year period. These results represent
the experience of a commercial plan with a 40% market share.
Table 1: Measured and Projected Savings per Doctor per Month for a
Payer with a 40% Market Share
[GRAPHIC] [TIFF OMITTED] T9675A.001
We can perform some back of the envelope calculations to estimate
the possible impact of this electronic prescribing system on the
Medicare system. About 14% of Americans are currently Medicare
beneficiaries. According to the 2003 Novartis Pharmacy Benefits Report,
medication costs for Medicare recipients were about twice those of
commercial populations. Thus, we might expect potential savings per
doctor of about \2/3\ the magnitude of those measured in the Wisconsin
study, if all of a doctor's Medicare recipients were treated with this
prescribing system. (14% market share x-6 2 to reflect
higher drug costs, versus 40% market share for the sponsoring payer in
the Wisconsin study).
The savings resulting from the use of Wellinx could be used to
bring the costs of the Medicare Modernization Act back into line with
the original CBO estimates. Or they could be used provide incentives to
physicians for adopting this technology or as payments for performance.
We suspect that it takes tools, such as this Wellinx system, and
incentives to optimize physician performance. A detailed analysis of
the impact of this system in a Medicare Demonstration Project that
includes performance-based financial incentives for physicians is
presented in Appendix A.
The results seen in the Wisconsin study have subsequently been
replicated over the first nine months in a study of another group of
physicians sponsored by a payer in Maine.
All studies of this system to date have been limited by their small
size. And they focused on commercial populations because the sponsoring
payer has never been CMS. Nonetheless, there is a remarkable
consistency of results. Overall, 65% of all prescriptions that are
written by physicians using Wellinx are for generic medications. Also
of note, these physicians write an average of 15 new prescriptions per
doctor per day. This high rate of utilization compares favorably to
other systems on the market.
The Esse Health Story
In the mid 1990's, physicians at Esse Health, a 70 doctor group in
St. Louis, http://www.essehealth.com became involved in global risk
contracting. As part of this effort, they recognized a need for
clinical decision support information in their workflow. The doctors
collaborated and created annual editions of a medication prescribing
guide that was inspired by Consumer Reports magazine. By 1999 this was
a 140 page book with chapters written by ten physicians and a
pharmacist. Esse doctors carried these books around in the pockets of
their white coats and used them as a reference source.
In late 1999, Vic Turvey, the president of United Health Care of
the Midwest noted that Esse was ``one of the top two performing medical
groups in all of the U.S.'' according to UHC's measures of quality of
care, patient satisfaction and cost-effectiveness in their Medicare HMO
product.
In the late 1990's most medical groups abandoned contracts that put
them at financial risk for their decisions. They did not have the data
infrastructure or the decision support information to manage risk
properly.
In contrast, the Wellinx system has helped Esse Health embrace risk
and manage it responsibly. This group of doctors began to self-insure
against malpractice in 2004. They also became licensed as an insurance
company and launched their own Medicare + Choice managed care plan in
June 2004.
__________
Appendix A: Example of a CMS Incentive Program that Combines Financial
and Quality Metrics
CMS has proposed the Physician Group Practice Demonstration, a
financial incentive program that rewards physician groups based on the
demonstration of improved quality and decreased cost.\4\
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\4\ A detailed description of the Physician Group Practice
Demonstration was published in the Federal Register, September 27,
2002: 67:61116-29. It is available online at http://cms.hhs.gov/
healthplans/research/927FRN.pdf.
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The following example uses this CMS model, adapted to illustrate
the potential value of a shared bonus program related to evidence-
based, fiscally responsible prescribing. The results of the Wisconsin
trial noted above are used to demonstrate the value to the payer (CMS)
and participating physicians.
In the Physician Group Practice Demonstration, changes in medical
costs for patients of participating physician groups are compared to
those of other physicians in the same geographic region. Each year for
three years, the observed growth rate in the control group is used to
estimate the expected costs in the study group. If the study group's
actual costs are less than their expected costs, the group shares in a
portion of these savings. If a loss should occur, these will accrue to
the physician group and bonuses will be reduced in subsequent years to
cover these losses.
Physician groups have up to three years to generate savings and
earn a bonus. If sustained improvements are seen over a three-year
period, physicians can earn an additional bonus. If a group leaves the
program before the end of the three-year program, they will be required
to reimburse the payer the full amount of any bonus payments they have
received. Every three years, baseline expenditures are re-calibrated to
prevent rewarding physicians for past performance.
The Physician Group Practice Demonstration also contains other
important attributes. For example, the intervention and control group
costs are corrected for patient mix, high-cost outliers are excluded
from the analysis, and there is a minimum threshold value of 2%. In
other words, the difference in costs between the intervention and
control group must be greater than 2% before any bonus is earned. This
may prevent rewarding physician groups for differences that could be
due to chance.
Calculating Bonuses and Example Savings
EXAMPLE: In the first year of the Wisconsin trial, the average cost
per prescription increased by 4.5% in the control group. Based on this
growth rate, the expected cost per prescription in the intervention
group would be $48. During the study period, patients treated by
physicians in the intervention group filled 40,000 prescriptions but
their average cost was only $42. The difference between the expected
cost ($48) and the actual cost ($42) represents savings of
approximately $240,000 or $12,630 per physician.
Of this $240,000, the Physician Group Practice Demonstration model
would put 60% ($144,000) into the program's bonus pool: 70% of the
bonus pool ($101,000 or $5,300 per physician) would be paid solely for
financial performance and 30% ($43,000 or $2,300 per physician) would
be available for quality bonuses. The actual amount of quality bonus
earned would be determined by the percentage of indicators on which the
group received a satisfactory score. For example, a group that
satisfied only four of eight quality indicators would receive 50% of
the maximum quality bonus, and the payer would retain the other 50%.
In addition, the remaining 40% of the total savings ($96,000) would
be retained by CMS. Half would be kept by CMS as guaranteed savings,
and the other half would be temporarily held to insure against
potential losses in subsequent years. If no losses were incurred over
the three-year period, physicians would be eligible for an additional
20% bonus.
In summary, we believe the Physician Group Practice Demonstration
model is a well-designed incentive program that provides adequate
financial incentives for physicians, while also protecting the interest
of CMS.