Proposal Could Save Federal Government $26 Billion, Prevent 1.9 Million Prescription Errors over 10 Years

(Washington, DC)—A new study released today by the Pharmaceutical Care Management Association (PCMA) finds that electronic (e) prescribing could prevent nearly 2 million medication errors and save the federal government $26 billion over the next decade (even after providing funds for equipment, training, and support) if physicians were required to use the technology in Medicare.

The study, conducted by the Gorman Health Group, LLC, finds that when physicians use e-prescribing to learn their patients’ medication history and prescription choices, both patient safety and savings are dramatically improved. Currently, however, fewer than one in ten physicians actually use e-prescribing.

The Gorman study models three options to increase e-prescribing in Medicare (see below). PCMA’s preferred approach, outlined in Option 1, would be for Congress to require Medicare physicians to use e-prescribing and provide incentive payments that would offset their costs for equipment, training, and support. Gorman projects savings under these options “net” of incentive payments.

“This is a ‘win-win’ solution that improves safety for patients, funds start up costs for physicians, and generates federal savings that could be used to help pay for an ‘update’ in Medicare physician payments. As Congress considers a $30 billion update of physician Medicare payments, it should also consider ensuring that physicians participating in Medicare use e-prescribing,” said PCMA President Mark Merritt.

Options to increase e-prescribing in Medicare include:

Option #1—Requirement Plus Incentives: Implementing a requirement that e-prescribing is used for all Part D prescriptions by 2010 combined with annual incentives for participating physicians equal to 1 percent of their allowed Medicare payments could reduce 2008-2017 federal healthcare costs by $26 billion and help physicians avoid 1.9 million adverse drug events over the next ten years.

Option #2—Requirement Only: Implementing only a requirement that all Part D prescriptions be written electronically by 2010 could reduce 2008-2017 federal healthcare costs by $29 billion and help physicians avoid 1.6 million adverse drug events over the next ten years.

Option #3—Incentives Only: Implementing only incentives for participating physicians equal to 1 percent of their allowed Medicare payments could reduce 2008-2017 federal healthcare costs by $2 billion and help physicians avoid 300,000 adverse drug events over the next ten years.

###

PCMA is the national association representing America’s pharmacy benefit managers (PBMs), which lower the cost of prescription drugs for more than 200 million Americans with coverage provided through Fortune 500 employers, health insurers, labor unions, and Medicare Part D

Contact Information:
Charles Coté 202-207-3605