NCPA - National Center for Policy Analysis


November 16, 2007

The benefits of adopting electronic prescriptions are clear and compelling, say John Kerry, a Democratic senator from Massachusetts, and Newt Gingrich, a Republican and former speaker of the House.

For example, when a doctor "writes" an electronic prescription, a computer can warn of potentially dangerous interactions with other medications or allergies and thereby prevent thousands of unnecessary hospitalizations each year.  E-prescribing can also let a physician know whether a drug is covered by a patient's insurance or whether an alternative generic is available at a fraction of the cost.

The federal government can lead by requiring that doctors who do business with Medicare convert to e-prescribing.  This can be done by using market forces and the federal government's purchasing power to align financial incentives, say Kerry and Gingrich:

  • First, offer bonus payments to Medicare doctors who already prescribe electronically or who adopt the technology.
  • Such payments will help doctors, especially those with small practices without many patients, to pay for startup costs.
  • If a majority of doctors don't e-prescribe a few years down the road, the government should require all doctors to adopt e-prescribing or face financial penalties. 
  • E-prescribing should become a condition of doing business with Medicare. 

A new study by the Department of Health and Human Services estimates that if 18 percent of doctors in Medicare adopt e-prescribing, the government will save $4 billion and nearly three million adverse drug events can be prevented over five years.

Source: John Kerry and Newt Gingrich, "E-Prescriptions," Wall Street Journal, November 16, 2007.

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