ePrescribing Adoption
and Implications
An E-Prescribing Case Study:
Metrics to Inform Medicaid and
State Pay-For-Performance Strategies
Jonah Frohlich, California HealthCare Foundation
Timathie Leslie, Manatt Health Solutions
February 28, 2008
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Airline and Healthcare Industries Compared
120,000
800,000,000
700,000,000
100,000
744,000,000
flights/admissions
80,000
# fatalities
600,000,000
60,000
500,000,000
Fatalities
Annual flights/hospital admissions
98,000
400,000,000
40,000
300,000,000
200,000,000
20,000
100,000,000
1,603
37,800,000
-
-
Airline industry (2006)
Hospital industry (2002)
Sources: Federal Aviation Administration. Merrill CT, Elixhauser A. Hospitalization in the United States, 2002. Agency for Healthcare
Research and Quality, 2005. HCUP Fact Book No. 6. AHRQ Publication No. 05-0056. Institute of Medicine, To Err is Human, National
Academy of Sciences 1999.
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Electronic Prescribing
(aka ePrescribing or eRx):
Computer-based support for the
creation, transmission, dispensing, and
monitoring of pharmaceutical therapies

Potential Benefits:
o
Significantly reduce medication errors including: dispensing the wrong
drug, ordering drugs that may interact with other drugs patients are
taking, or cause allergic reactions.
CALIFORNIA HEALTHCARE FOUNDATION
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California vs. Wal-Mart
Economy Comparison (Trillions – 2006)
1
2
China
3
Japan
4
India
5
Germany
6
United Kingdom
7
France
Italy
1.76
Russia
1.75
36
10
United States
8
$2
9
$-
$6
$8
$10
$12
$14
13.06
10.21
4.22
4.16
2.63
California
Wal-Mart
$4
1.93
1.90
1.60
0.31
Sources: The World Factbook (ISSN 1553-8133; also known as the CIA World Factbook). Wal-Mart 2006 Annual Report.
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How Are They Different?

Wal-Mart knows when a 6 oz. can of low-sodium Campbell’s
tomato soup is sold in Fresno store #1815; how much the
customer paid for it; how many more they have in stock; and
can instantaneously order more to replace it

California can’t accurately account for the number of people
who die or are sickened from a prescribing error:
o
There is no reporting or detection system
o
There are no incentives (or penalties) associated with good (or bad)
prescribing practices
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How Is This for Efficiency?

Cost of dispensing a drug for a Medi-Cal beneficiary1:
o


$13.18 per prescription
Communication between pharmacies and physician offices
account for2:
o
25% of pharmacists’ time
o
20% of the workload of physician-office staff
Meanwhile over at Wal-Mart:
o
Generics drugs are $4 (and they’re making money on it)
o
Saved consumers >$750 million
Sources: 1Grant Thornton, LLP, National Study to Determine the Cost of Dispensing Prescriptions in Community Retail Pharmacies,
January 2007. 2Jane Sarasohn-Kahn & Matthew Holt, The Prescription Infrastructure: Are We Ready for ePrescribing? California
HealthCare Foundation, January 2006.
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Quality and Safety
3 trillion
3.4 billion
2.6 million
1.5 million
# prescriptions/year and adverse events
Vehicle miles travelled and injuries
•Institute of Medicine, Report Brief, July 2006: Preventing Medication Errors
•Rick Ratliff, COO Surescripts - NACDS National Association of Chain Drug Stores estimates
•National Highway Traffic Safety Administration, July 2007 Traffic Safety Facts, http://www-fars.nhtsa.dot.gov/Main/index.aspx
•Federal Highway Administration, US Department of Transportation (2002) A typical automobile on the road in 2002 had an
average trip length of 4.0 miles
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e-Prescribing: Slowly but Surely
Infiltrating the World of P4P

Private Sector Initiatives

Federal Initiatives

o
Medicare Physician Quality Reporting Initiative
o
Medicare Physician Group Practice Demonstration
o
Draft 2009 Medicare Drug Benefit Call Letter
State-level Initiatives:
o
Massachusetts, Florida, Michigan and others
o
Mississippi: Saves the state about $1.2 million per month in
medication costs by equipping 225 doctors with handheld eprescribing devices*
o
ePrescribing pilot program (northern CA and Medi-Cal)
* Government Health IT – September 13, 2007.
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ePrescribing: From Start to Finish
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A Comprehensive eRx Program
Pharmacy
PBM/Payor
• Pre-authorization
• Claims
• Refill request
• Formulary
• Fill history
• Claim generation
Patient
Provider
• Refill request
• Pre-authorization
• Outreach and education
• Refill approval
• Self-management
• Decision support
• Reminders
• Drug-drug checks
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NSRHN eRx Program: A Pilot for the State
 9-county
region of rural
northern California
Northern Sierra Rural Health Network Map
 Over 30% of
patients are Medi-Cal
beneficiaries
 Drug-seeking: top
issue identified by
providers in eight
community meetings
(2006)
 eRx identified as
#1 technology funding
priority
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Participant Overview
Plumas
District
Hospital
Hill Country
Community Clinic
Fairchild Medical
Center
McCloud
Clinic
Mercy Mt. Shasta
Shasta
Community
Health Center
Siskiyou Family
Health Care
Plumas
Shasta
Siskiyou
Siskiyou
Siskiyou
Shasta
Siskiyou
Sites
1
1
1
1
3
1
1
FTEs
124
32
319
8
260
Clinician
FTEs
35
3.7 MD,
186
2.4
24
TBD
TBD
Payor
Detail/
Market
Share
40%
Medicare
39%
MediCal/CMSP
45% Medicare
Medicare
Medicare
Medicare
20% Medi-Cal
Medi-Cal
Medi-Cal
Medi-Cal
30% MediCal
15% Medicare
55%
Medicare/Me
di-Cal*
25% Private
20% Private
Blue Cross
CMSP
Blue Cross
Rite Aid
Rite Aid
Rite Aid
Pharmacy
Express
Pharmacy
Express
Scott Valley
Drug
Country Drug
Country Drug
Rite Aid
Longs
Longs
Raleys
10-15
10-15
3-4
Facility
County
260
1 DDS,1.6 MH
20% Private
5% Self
18% Uninsured
25% Sliding Scale
5% Self
5% Other
3% Self-Pay
5% Other
Pharmacy
Detail
Quincy Drug
Rite Aid
Scott Valley Drug
Rite Aid
Safeway
Wal-Mart
Longs
Rite Aid
Walgreen’s
Raleys
Costco
Pilot
Providers
6
3-4
TBD
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Wal-Mart
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What’s in it for the Provider?
 Free access to Allscripts eRxNOW through NEPSI
 eRx workflow assessment and implementation support through
program management (Illumisys and Manatt Health Solutions)
 NSRHN on-site and ad hoc training, phone support
 Access to formulary data through Medi-Cal and other plans
(e.g. Wellpoint)
 Improved workflow – e-refills
 Increased patient safety
o Alerts, e.g. drug-drug interaction
o Patient history – means of addressing drug-seeking behavior
 Pharmacy relationship support through
SureScripts outreach and education
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Spring 2009: Sharing eRx Program Findings
 Evaluation performed by U of A Pharmacy
o Impact on clinical outcomes
o Impact on operational costs, quality, and efficiencies to both
providers and pharmacies
o Benefits to the Medi-Cal program
 NSRHN best practices for sustaining and spreading model
o Initial rollout – 6 provider organizations
o Extension of Medi-Cal data to additional NSRHN providers
o Recommendations for extension of Medi-Cal data to users of
NEPSI and other eRx applications across state
 Recommendations for effective pay-for-performance initiatives
among safety net providers
 Recommendations for state and national Medicaid pay-forperformance strategies
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Can E-Prescribing Help Medicaid
Managed Care Plans/Providers Measure Up?
Type of Measure
Measures
HEDIS/HEDIS-Like
 Antidepressant medication management
(focus largely at the
HMO-level not the
physician level)
Information Technology
 E-prescribing technology use
Utilization
 % generic drug use above market usage
 Utilization rates
 Overall spending levels
Patient Safety
 Drug-drug interactions
 Never events
Patient Satisfaction
 Consumer Assessment of Health care Providers and
Systems Survey
Pharmacy Operational
Efficiency
 Time to fill, refill Rx
 Communications/handoffs
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Key Factors in the Design of
Successful Medicaid Physician P4P Programs
 Which incentive model is best suited to physicians?
 Which performance measures and data should be
used?
 What are the best ways to engage physicians?
 What regulatory issues are unique to physician P4P
programs?
How does e-prescribing address these issues?
Source: Center for Health Care Strategies, Inc. “Physician Pay-for-Performance in Medicaid: A
Guide for States,” Funded by The Commonwealth Fund and the Robert Wood Johnson
Foundation. March 2007.
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Discussion
Questions?
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For more information:
Jonah Frohlich
Senior Program Officer
California HealthCare Foundation
Timathie Leslie
Managing Director
Manatt Health Solutions
jfrohlich@chcf.org
www.chcf.org
tleslie@manatt.com
www.manatthealthsolutions.com
www.ihealthbeat.org
www.californiahealthline.org
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