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Posted: December 16, 2008

If Your Doc Is Computer Friendly, Your Meds Might Cost Less

Doctors who use an electronic prescribing system seem more likely to prescribe lower-cost medications, reducing drug spending, according to a report in the journal Archives of Internal Medicine.

One method for encouraging use of lower-cost medications is a tiered co-payment system. Insurers identify preferred medications, such as generic drugs, and designate them "tier 1" with the lowest co-payment.


Discount Prescriptions
Moderately priced brand-name medications may be designated second-tier and assigned a higher co-payment, and third-tier drugs represent expensive brand-name medications for which generic alternatives are available and have the highest co-payment.


"A key limitation of tiered co-payment systems is prescribers' inability to keep track of differing co-payment tiers across insurance plans' formularies," the authors write.


Researchers from Brigham and Women's Hospital and Harvard Medical School, both in Boston, studied an electronic prescribing (e-prescribing) system designed to address this issue.


In April 2004, two large Massachusetts insurers began using the system, which provided community-based practices with free wireless devices and access to a secure web portal that color-coded drugs by co-payment tier.


Using a year and a half of data, the researchers compared the change in proportion of prescriptions for the three tiers before and after e-prescribing began, and also compared the prescription habits of doctors using the e-prescribing system with those of controls.


Between October 2003 and March 2005, more than 1.5 million patients filled 17.4 million prescriptions. After implementation of e-prescribing, tier 1 prescriptions increased by 3.3% and second- and third-tier prescriptions decreased accordingly among physicians using the system. Meanwhile, e-prescriptions of tier 1 medications increased 6.6%, compared with a 2.6% increase among prescriptions from the control group.


Among clinicians using the new system, e-prescriptions accounted for 20% of their total prescriptions. They prescribed more tier-1 medications than the control group, even when not e-prescribing; however, prescriptions of lower-cost medications were most common among e-prescriptions.


Based on average medication costs for private insurers, the researchers estimate that using such an e-prescribing system at this rate could result in savings of $0.70 per patient per month, or $845,000 annually per 100,000 insured patients filling prescriptions. "The potential savings increase with more availability and use of e-prescribing; for complete e-prescribing use, the projected savings is $3.91 million per 100,000 patients per year," the authors write, noting the upside for savings with increased use.


"Our results suggest that there are important economic gains achievable through the broader use of e-prescribing with formulary decision support but that merely providing e-prescribing systems to clinicians will not necessarily achieve those savings," they conclude. "Rather, prescribers need to adopt the e-prescribing systems fully for these gains to be realized. Making those changes represents an important goal for physicians, insurers and all those with a stake in the cost of prescription medications."


(Article courtesy of

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