How Do We Get to the

Tipping Point?

Electronic

Prescribing:

Sponsored by:

AHIP Business Forum – November 19, 20081

Making the Case For

Electronic Prescribing

2

Electronic Prescribing

Prescribe Transmit

Traditional view3

Medication Management Process

Prescribe Transmit Dispense Administer Monitor

Modern view4

Medication Management Process

Prescribe Transmit Dispense Administer Monitor

Bell Douglas S, Cretin S, Marken RS, and Landman AB, “A Conceptual Framework for

Evaluating Outpatient Electronic Prescribing Systems Based on Their Functional Capabilities,”

Journal of the American Medical Informatics Association, Vol. 11, No. 1, January/February

2004, pp. 60–70.

Doug Bell,

RAND and UCLA5

Payer Messaging LensePayer Messaging Lens

Provider

Member

• Formulary alerts

• Patient safety alerts

• Medication adherence alerts

• Gaps in care alerts

• Condition & therapy education

• Medication adherence education

• Mail order instructions

• Care reminders

Communication at the point of care6

Importance of E-Prescribing

• It is safer

• It saves time and money

- Pharmacies

- Plans

- Physician practices

- Patients

• It improves the quality of

healthcare

7

Lowers health plan drug costs

• Increases prescribing of generic

medications

• Increases prescribing of lower cost

alternative medications

• Decreases amount of inappropriate

medication therapy

- Prior authorizations

- Step therapies

• Increases use of mail order for chronic

medications

Return

On Investment

+1% generic utilization = $4 - $12 PMPY*

*Industry estimates by payer e-health consulting firm. 8

Lowers health plan medical costs

• Reduced ADEs

- More accurate drug dosing

- Increased legibility

- Drug interaction checking

• Patient adherence

- Increased first fill percentage

- Increased persistence through

availability of medication history

- Prescribing of affordable, on

formulary medications

Return

On Investment

+$1 drug spend = $4 - $7 lower medical costs*

*Medco, 2005 (study on increased adherence for diabetes, hypertension and other conditions). 9

Increases provider and member

satisfaction

• Provider satisfaction

- Practice efficiencies including less

phone/fax through automated renewals

- Availability of medication history

information across providers

- Availability of electronic prescription

records outside the practice

- Improved quality of care

• Member satisfaction

- Less wait in the pharmacy

- Perception of more modern care

Return

On Investment

Reduces staff time by hours per day in smaller practices*

*SureScripts-RxHub 10

Electronic Prescribing

Across Stakeholder Environments

11

Physician adoption

Large and smaller practices are different markets

Niche stand-alone

Full EMR

12%

Use EMR

w/o ERx

17%

Use EMR

With ERx

5%

Use ERx

Stand-alone

66% Not Automated

EMR ERx

DeRoche, N Engl J Med 2008;359:50-60; CDC (2008), SureScripts-RxHub (2008) 12

Physician utilization

Do we have the tools to succeed?

Niche stand-alone

Full EMR

• Commitment

• Practice leadership

• Training

• Workflow

• Total system support

ERx within an EMR

13

Community pharmacies

• Over 40,000 stores active

• 80% are chains

• Sharing Rx history

-NCPDP with physicians

-Google / Microsoft PHRs

• In-store clinics (CCR)

• Pharmacist care mgmt

14

Government: Medicare Incentives

2009 2010 2011 2012 2013 2014

+2%

+1%

+.5%

+2%

-1%

-1.5%

-2%

Will payers continue to invest or move to the sidelines?

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Consumer Experience

Safety, Convenience, Outcomes

• Call pharmacies for refills

• Refill reminders

• Prescription receipt

-Administrative messages

-Care messages

• Focus on adherence

• Physician-patient

relationship

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Pharmaceutical Manufacturers

Focus on patient education and medication adherence

• Formulary positioning

• Medication adherence

• First fill alerting

• Closed loop prior auth

• Communications links

-Market surveys

-Drug information

• Practice efficiency

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Electronic Prescribing:

The Health Plan Experience

18

Successful Models

• Free or near free to high prescribers

• Activation and monthly services fees to solution providers

• MA ERx Collab.

• SEMI

• ePrescribe FL

• CareFirst

• Horizon

• BCBSNC

• Capital

• BCBSAL

• Sierra

• BCBSLA

• BCBSIL

• Medicaid FL

• BCBSRI

• Aetna

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Top Standalone Suppliers

Business models remain a challenge

• Allscripts

• DrFirst

• iScribe

• MedPlus

• Prematics

• RelayHealth

• RxNT

• ZixCorp

20

Part of a payer toolset

Supports clinical messaging to providers and members

• Physician EMR

• Member PHR

• Disease management

• Pay for performance

• Patient-centered

medical home

Electronic

Prescribing

21

Multi-payer projects

Collaboration upfront or joining mid-process

Free riders?

Business Model?

• First movers

• Competitors

• Nationals

• Niches

• CMS

22

ePrescribe FL

AHIP

RIQI

Availity

CAQH

????

S.E.M.I.

SureScripts-RxHub

eRx Collaborative

Collaborative models

Ownership? Breadth of Coalition? Org structure?23

Open Discussion:

The Way Forward

24

Force Field Analysis

Ideal State

Today

Obstacles and Challenges

Driving Forces

The Payer Environment for Electronic Prescribing25

Force Field Analysis

Ideal State

Today

Obstacles and Challenges

Driving Forces

The Payer Environment for Electronic Prescribing

Free

Riding

Medicare

Incentive

Physician

IT Support

Vendor

Biz Model

Payer

Silos

Payer

ROI

Pharmacy

InterOp

26

From the payer point of view

Key Questions for the Group

1. What are our primary obstacles

to progress in e-prescribing?

2. What can each organization do

to move e-prescribing ahead?

3. What help and support do we

need from others?

4. What are our immediate

priorities to work on together?

???

27

Thank you.

Michael Lake

President

Circle Square Inc.

San Francisco, CA

www.michaellake.com

michael@michaellake.com

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