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Electronic Prescribing: The Next Revolution in Pharmacy?

Carol Sardinha

D uring the 1980s third-party payors still processed claims for pharmacy services the old-fashioned way-via paper. But advances in computer technology, coupled with the evolution of managed care and the development of pharmacy benefit management companies (PBMs), set the stage for change.

As millions of Americans gained access to prescription drug benefits through managed care, payors needed to establish more efficient mechanisms for accurately processing the increasing volume of claims being generated. By the middle of the 1980s, several insurance companies and other payors, including PBMs, introduced what was then a new concept: on-line computer claims adjudication linking payors directly to pharmacy providers.

It was a radical idea initially for many in the pharmacy world who were accustomed to paper transactions. Yet today, just 10 years later, on-line pharmacy claims processing has become the standard of practice, accounting for the way most pharmacies do business-analogous to how automated teller machines (ATMs), once also a novelty, have become the way most individual consumers do their banking.

Today, pharmacy stands on the brink of what many feel could be the next phase of an electronic revolution: using computer technology to directly link the prescribing physician�s office with the dispensing pharmacy at the time the prescription is written. This process of electronic prescribing, sometimes referred to as telepharmacy, is still in its infancy. However, telepharmacy has begun receiving the attention of those in the health care industry who recognize its potential benefits, including increased formulary compliance, simplified pharmacy administration, reduced dispensing or other errors related to illegible handwritten prescriptions, and, ultimately, improved patient satisfaction.

In this article, the author examines the current state of telepharmacy as seen by several individuals who are involved in establishing electronic links between prescribers and dispensing pharmacists, as well as what the future is likely to hold for this emerging movement.

HMO Pilot Project Breaks New Ground

Health Alliance Plan (HAP) of Michigan, a mixed-model HMO with more than 530,000 members, was one of the first HMOs to pilot this kind of technology with physicians in the Independent Practice Association (IPA) setting. A primary objective of HAP in moving toward an electronic prescribing system was to help physicians make appropriate formulary drug choices at the time of prescribing. The HMO sought to accomplish this by utilizing computers in the physicians' offices and providing physicians with on-line access to the plan's formulary, including lists of preferred drugs and their costs in relation to one another.

The advantage was that the system would provide the physician with real-time feedback on the plan's formulary, prior authorization requirements, and treatment guidelines while the patient was still in the physician's office, explains Suzanne Rivkin, Pharm.D., manager of pharmacy quality improvement with HAP. Assisting the physicians with formulary compliance was expected have a positive impact on reducing drug costs and, possibly, drug utilization as well, says Rivkin, who oversaw the project.

HAP started out with a small-scale, six-month pilot project to test the feasibility of moving toward an electronic prescribing system and worked with an outside vendor to install the necessary software and systems. The project was launched in January 1996 and involved 17 IPA physicians located at five sites who expressed interest in using the new technology and who saw relatively large numbers of HAP patients.

HAP used a vendor to build electronic patient records to house medication profiles, using both its own data and available patient demographic data downloaded from the physicians' offices or practice management companies. Physicians would then access these medication profiles using a stand-alone computer terminal in their offices.

Another advantage of the system is that it provided physicians with on-line drug utilization review edits on duplicate therapies, patient allergies, and potential drug interactions, Rivkin says. Physicians (or, more commonly, their designated office personnel) would enter patient and prescription information on the computer screen at the time of prescribing. This information was then transferred electronically to the vendor's server, which performed system edits. Pharmacy personnel at the vendor's end would review information flagged by system edits. If problems were detected, such as a potential adverse drug reaction or a nonformulary drug being prescribed, the physician's office would receive an electronic message suggesting specific changes. Physicians could, however, override the plan's formulary by simply entering a code, which would allow the prescription to proceed as originally indicated.

Results Are Promising

Initial results of the pilot project were encouraging, Rivkin says. By the end of the pilot, generic use among physicians averaged 99%, up substantially from the 85% average recorded at the start of the pilot. Formulary compliance, which included prescribing generics, formulary agents, and preferred drugs, reached 95% by the end of the pilot, up from 83% at the start of the pilot. Also, of those formulary products prescribed, 93% were either preferred agents or were considered first-line therapy.

The system offered benefits in addition to promoting cost-effective prescribing, Rivkin stresses. The electronic system eliminated the need for pharmacists call physicians back for clarification of the prescription because of illegible handwriting. Also, because the system would fax the prescription from the physician's office to the pharmacy of the patient's choice, in many cases the prescription would be ready by the time the patient got to the pharmacy, reducing the time patients spent waiting for prescriptions to be filled. Some physician offices that participated in the pilot reported saving administrative time as a result of the electronic formulary and computerization of records.
However, there also were obstacles that prevented the physicians and HAP from experiencing the full benefits of the technology, Rivkin concedes. Some physician offices felt that the computers and software were too cumbersome to use. Others reported occasional glitches in the modem data transfer. In addition, when prescriptions were faxed directly to the pharmacy, there was no confirmation that the prescription had been re-ceived. In some cases, rather than being filled immediately, prescriptions sat in the pharmacy's fax bin because pharmacists at the receiving end weren't accustomed to using this type of system.

Perhaps the biggest barrier was a psychological one. "Even if you have the right technology in place, there are a lot of behavioral issues to resolve," Rivkin says. "Providers and their staffs have to be willing to make a commitment to learn and use the technology and, initially, it can be difficult to get people to buy into that."

These setbacks, however, haven't diminished Rivkin's enthusiasm for pursuing the new technology. HAP recently launched a second electronic prescribing pilot program involving 10 doctors and three physician extenders in four office sites. This project, which will run for a year, involves using Internet technology rather than a stand-alone software program. It will also link the physician's computer directly to the dispensing pharmacy's computer, eliminating the need to fax prescriptions.

"We're living in the age of a technology revolution," Rivkin says in explaining why her HMO is continuing to push forward. Using computers to link physicians with pharmacy data and other information vital to streamlining the patient care process "is where the future is going to be," she says.

More technology to come

Rivkin anticipates the day when providers can use portable, handheld technology for electronic prescribing, rather than rely on a single, stand-alone computer terminal. She also envisions such systems eventually allowing physicians to integrate medical and pharmacy data, access patient records electronically, and rely on computerized treatment guidelines and algorithms at the point of prescribing. "We're not there yet, but this is where we're going," she predicts. She also believes more retail pharmacies will start to adopt the new technology to gain a competitive advantage. Managed care plans and other payors will eventually start demanding these electronic capabilities from their network pharmacies. Those that have the systems in place and are comfortable using the technology will have a greater likelihood of getting additional managed care business directed toward them, Rivkin believes.

There are others who share Rivkin's views. "Many chain drug stores already have good computer systems in place that are conducive to using this type of electronic prescribing technology, although most of the smaller, independent pharmacies are not yet at this stage," says Linda Wells, Ph.D., R.Ph., president of MedImpact, a San Diego-based company that is one of several vendors currently offering electronic prescribing services and products.

"It's amazing how fast things change in the technology arena. [Electronic prescribing] is not an alien concept. This is how people think it's going to be in the future," Wells says, who predicts electronic prescribing will become standard within 10 years.

"Currently, it's the HMOs that really would like to see this technology work for them," because it gives plans greater control over the administration of their pharmacy benefits, Wells says. Her company already has several pilot programs underway with managed care plans scattered across the country that are very interested in using the technology.

Patients and Industry Benefit

Such systems also benefit doctors, pharmacists, and patients by identifying potential problems before the patient shows up at the pharmacy, Wells believes. For example, the system can alert the prescriber to whether the patient is still eligible for drug coverage or eligible to receive a refill, avoiding situations where the patient goes to the pharmacy only to discover he or she cannot get a prescription as anticipated. It saves time for physicians and pharmacists by eliminating the need to call each other to clarify or change a prescription based on a plan's formulary, a potential adverse drug event, or other conflict. It also avoids the need for patients to wait at or return to the pharmacy if the pharmacist and physician can�t immediately reach each other by phone to resolve problems.

"More large medical groups are interested in moving toward an electronic prescribing system," adds Bob DaSilva, R.Ph., M.S., president of MedData, a subsidiary of MedImpact. This is especially true of group practices that are at risk for pharmacy services and group practices that have in-house pharmacies, because they have greater financial incentives for adhering to formularies. "Adhering to the often conflicting formulary requirements of different health plans and group practices is a real nuisance for physicians," DaSilva notes. Using an electronic system that allows physicians or their designated personnel to know which drugs are approved for a particular patient at the click of a computer mouse makes formulary compliance easier, he says.

Another reason physician groups are interested is because they have traditionally "been information starved when it comes to pharmacy data," DaSilva says. Using an in-office system, physicians can more readily look at prescribing profiles of each physician in the group to determine where patterns can be changed. That's an improvement over the traditional HMO-compiled utilization reports many health plans present to physician groups, which tend to look at prescribing patterns within the aggregate group rather than among individual physicians.

Next Steps

DaSilva, like others involved in electronic prescribing, concedes that there are still obstacles. First, many pharmacies are not yet equipped to accommodate the technology. Only about 40% to 60% of pharmacies have fax machines located where filling and dispensing occurs. This limits the technology's usefulness, DaSilva says. Also, to date, only a handful of pharmacies are certified in the national SCRIPT standard for the electronic transmission of prescription information, issued in 1996 by the National Council for Prescription Drug Programs (NCPDP). To be certified, pharmacies must revamp their computer systems and demonstrate to NCPDP that their systems can accurately accept and transmit data under the new standardized format.

DaSilva predicts the demand for electronic prescription links between prescribers, pharmacies, and payors, including HMOs and PBMs, will skyrocket once some of the large pharmacy chains become SCRIPT certified. Many chains are striving to become certified during the first quarter of 1998, he says.

Other vendors of electronic prescribing systems are also gearing up for the expected surge in demand. In October, National Data Corporation in Atlanta, a leading electronic claims processing firm, and InfoScan of Horsham, Pennsylvania, a manager and publisher of managed care formulary information, announced they were partnering to offer a real-time prescription information service for medical practices and other facilities throughout the United States. The service will allow physicians to electronically access the formularies of more than 700 HMOs, PPOs, and PBMs nationwide at the time of prescribing, enabling doctors to check which drugs are approved, preferred, covered, restricted, or not reimbursed under various managed care plans.

No one can predict the future with absolute certainty. But as new technologies and computer applications enter the market-and as these technologies become less expensive and easier to use-it's likely that electronic prescribing will eventually be embraced more widely by providers and payors. Tests in the next few years will determine whether electronic prescribing is the next technological revolution for the American health care system.

Copyright � 1998, Academy of Managed Care Pharmacy, Inc. All right reserved.