Improving the Delivery of Care and Reducing Healthcare Costs with the Digitization of Information

Transcription

1 Improving the Delivery of Care and Reducing Healthcare Costs with the Digitization of Information Richard Noffsinger; Steve Chin, RPh ABSTRACT In the coming years, the digitization of information and the Internet will be extremely powerful in reducing healthcare costs while assisting providers in the delivery of care. One example of healthcare inefficiency that can be managed through information digitization is the process of prescription writing. Due to the handwritten and verbal communication surrounding prescription writing, as well as the multiple tiers of authorizations, the prescription drug process causes extensive financial waste as well as medical errors, lost time, and even fatal accidents. Electronic prescription management systems are being designed to address these inefficiencies. By utilizing new electronic prescription systems, physicians not only prescribe more accurately, but also improve formulary compliance thereby reducing pharmacy utilization. These systems expand patient care by presenting proactive alternatives at the point of prescription while reducing costs and providing additional benefits for consumers and healthcare providers. KEYWORDS Health Insurance Portability and Accountability Act of 1996, HIPAA Prescription writing Information digitization Healthcare costs Administrative costs Prescription management Electronic prescription system Formulary Workflow HMO PPARIS JOURNAL OF HEALTHCARE INFORMATION MANAGEMENT, vol. 14, no. 2, Summer 2000 Healthcare Information and Management Systems Society and Jossey-Bass Inc., Publishers 23

2 24 Noffsinger, Chin Technology Physician Pharmacy utilization Internet Prescription writing Physicians and other medical professionals are slowly embracing the advantages of using information technology in their practices. Some sources estimate that only 5 percent of physicians use electronic medical-record systems; the remaining 95 percent of patient medical records are paper-based. Initiatives such as HIPAA (Health Insurance Portability and Accountability Act of 1996), the availability of easy-to-use inexpensive technology, and a more technologically savvy and informed patient base are likely to bring rapid changes to the medical community. In the coming years, the digitization of information and the Internet will be extremely powerful in reducing healthcare costs while assisting providers in the delivery of care. Healthcare providers need timely reliable information for making patient-care decisions. There is a breadth of technology available today and planned for the future that will affect this. For example, palm-sized PC devices will become very important in the future of medicine, both for the capture of patient information and for the presentation of information at the point of care. New generations of user interfaces and interoperability among healthcare applications will affect positively how clinical staff members interact with patients and will flexibly accommodate the many different ways healthcare is provided. A 1999 survey by the Medical Records Institute 1 indicates that improving the ability to share patient information among healthcare providers, improving the quality of care, and improving clinical processes and workflow efficiency are some of the most important factors driving physicians to incorporate information technology into their practices. The same organization also points out that healthcare is becoming more patient-centric, rather than continuing to follow the more traditional physician-centric model. Patients are becoming consumers of medical information, primarily because of access to the information via the Internet, and are participating more and more in their own healthcare management. An Example: Prescription Writing Let us look at a simple example of how today s technology can improve physician workflow and the delivery of care, leading to greater patient satisfaction. On a daily basis, most physicians write prescriptions for medications to treat patients. Every year, almost 3 billion prescriptions are filled in the United States alone. The percentage of healthcare dollars spent on prescription drugs has been growing at a double-digit rate for the past five years, fueled by an

3 Improving the Delivery of Care and Reducing Healthcare Costs 25 increase in the number of prescriptions being filled, higher-priced drugs being introduced to the marketplace, and an increase in consumer demand, stimulated by pharmaceutical direct-to-consumer advertising. 2 Prescriptions are usually hand-written by the physician and given directly to the patient. The patient then delivers the written prescription to a pharmacy, and, usually after some period of time, the patient receives the medication prescribed. In some cases, a staff member in the physician s office phones or faxes the prescriptions in to the pharmacy. For refill requests, the pharmacist generally phones the physician for approval. There are many problems inherent in this process. Illegible handwriting by a busy physician may necessitate follow-up by an equally busy pharmacist to ensure the proper interpretation of the prescription. If this follow-up does not occur, there is the risk that the wrong medication may be delivered to the patient. Other frequent errors are inappropriately prescribed dosage levels, incorrectly spelled drug names, incomplete prescriptions, incorrect instructions, and drugs prescribed that are outside payer formulary guidelines. A formulary is a list developed by a payer, such as a managed care organization (MCO), which specifies which drugs will be covered by the payer. These errors require clarifying phone calls by the pharmacist to the physician. It also requires the pharmacist to be an order-entry clerk, which is clearly not the optimal use of his or her time. Not only does this process waste time, but it also contributes to the high risk of the wrong drug or dosage being delivered to the patient. Over the past decade, physicians have been required to provide patient care in an increasingly complex and bureaucratic environment. With over 50 percent of the U.S. population covered by managed care plans and 90 percent of U.S. physicians accepting managed care contracts, 2 physicians must provide care within the guidelines established by prescription formularies, referral networks, and testing protocols. These guidelines are compiled in voluminous books published by each insurance company and distributed to the physicians. In the clinical environment in which physicians are pressured to evaluate an increasing number of patients, this system is inherently inefficient. Moreover, these formulary and testing guidelines and referral networks are frequently updated so the information in the catalogs published by each insurer with which a physician contracts are often out-of-date. This process has resulted in an extremely time-consuming, costly, and inefficient workflow process. Recently, The Washington Post 3 reported that the Institute of Medicine of the National Academy of Sciences issued a report that said that medical errors may be the fifth leading cause of death in the United States. This report stated that as many as 98,000 Americans die unnecessarily every year from medical mistakes made by physicians, pharmacists, and other healthcare professionals. Those deaths, along with serious nonfatal reactions due to other medical

4 26 Noffsinger, Chin errors, cost the nation as much as $29 billion a year. Medical errors include simple miscommunications about a drug s name during a telephone call between a doctor and a nurse, mistaken treatments because of poorly labeled drugs, improper dosing because of faulty calculations, and a simple lack of communication as a patient gets passed from one provider to the next. Many new drugs have similar names, which are easily confused when orders are given by voice or are handwritten. The report concludes that most errors occur because of the cumulative opportunities for human error that arise in today s complex medical system. Trying to Control the High Administrative Cost of Medication Drug costs now represent 14 percent of insurance premiums, up from 7 percent in The primary vehicle that payers have used to manage cost has been implementation formularies whereby the payer (often an MCO) contracts with pharmaceutical companies to receive drugs at a discount in exchange for the drugs being covered under the payer s plan. 2 Physicians serving multiple payers are left with no common point of reference when making daily pointof-care prescription decisions. Even when prescribing on-formulary, physicians do not have the information conveniently available to help them take planspecific drug-cost information into consideration. Given the size and growth rate of annual pharmaceutical expenditures, even small percentage improvements in formulary compliance can lead to significant savings. Addressing Medical Needs with Electronic Prescription Management Electronic prescription-management systems are being developed as the need for better methods of transcribing prescriptions and transmitting prescriptions to pharmacies is being recognized. These systems improve communication between physicians, pharmacists, payers, and patients. This can save money and reduce the risk of prescribing the wrong medication or dosage. The delivery of care is enhanced by ensuring that patients are being treated appropriately and in a timely manner. Electronic prescription-management systems also offer the promise of ease of use and convenience for physicians, pharmacists, payers and patients. In April 1998, the Journal of the American Medical Association (JAMA) recommended that computerized prescribing in the practice of medicine is a change that is overdue. 4 The article indicates that electronic prescription management could have a positive impact on drug selection; the patient role in pharmacotherapy risk-benefit decision making; screening for interactions (drug-drug, drug-laboratory, and drug-disease); linkages between laboratory and pharmacy; dosing calculations and scheduling; coordination between team members, par-

5 Improving the Delivery of Care and Reducing Healthcare Costs 27 ticularly concerning patient education; monitoring and documenting adverse effects; and postmarketing surveillance of therapy outcomes. A Closer Look at an Electronic Prescription-Management System An electronic prescription-management system recently introduced to the market, the Physicians Prescription and Referral Information Server (PPARIS) system from ParkStone Medical Information Systems, gives physicians easy access to payer drug coverage information while they prescribe medications for patients at the point of care. The PPARIS system runs on a palm-sized PC device with the Microsoft Windows CE operating system. One of the ways that payers, such as health maintenance organizations (HMOs), control healthcare costs is by issuing guidelines to physicians. This includes the formulary or drug list that specifies which drugs are covered by the payer and those drugs with less-expensive alternatives. Researching bulky HMO formulary reference books to confirm coverage is a cumbersome process further complicated by the need to navigate books from six to twelve HMOs. Consulting these books is a time-consuming process for physicians, and the information is often outdated. Only a physician can change a prescription if the drug is not covered. If there is an error, for example, if the physician has prescribed a medication not covered by a patient s payer, the pharmacy will typically call the doctor s office and leave a message. The physician must then look up an alternative or, in many cases, take another guess. This process is time-consuming and not only inconveniences the patient but in some cases may harm the patient, who may wait days to receive important medication. HMO drug coverage is structured for the patient to pay a set co-payment, with the balance of a drug s cost paid by the HMO or the prescribing physician. Each HMO has its own set of guidelines, which complicates the prescription decision-making process. It s important to maintain formulary compliance to avoid conflicts and pharmacy call-backs, and save on costs, says Dr. Dennis O Leary, owner of South Florida Internal Medicine Associates in Miami, Florida. 5 Medical professionals such as O Leary are discovering the powerful and practical applications of portable computing solutions for data capture and the presentation of information at the point of care. In coming years, this technology and the digitization of medical records will help improve delivery of care and cut healthcare costs as well. For O Leary, the benefits are simple: He is able to manage his practice more efficiently and provide a higher level of care for each patient without additional effort. Cost Control Choices Made Easy. As with most medical practices, O Leary faced a constant battle to control the cost of care, especially in the area of pharmacy use, or prescriptions. His office receives regular reports from

6 28 Noffsinger, Chin HMOs that detail his patients drug expenses, his budgeted allowance, and specific areas where expense is excessive. Before implementing the PPARIS electronic prescription management system, O Leary s pharmacy use expense varied widely from month to month and was often several thousand dollars over budget. It is still a challenge to control pharmacy costs, but now I am conscious of my choices each time I prescribe, says O Leary. I am able to make a consistent effort to make the right decisions, and the results have been extraordinary. In initial reports from HMOs, my pharmacy utilization went down right away, from $68 per member per month to $62 per member per month. I can document this six dollar savings directly to writing prescriptions using the PPARIS electronic prescription-management system. I expect the next reports to reflect a much greater savings, since the effects of economical prescribing are cumulative. I am so pleased with these results that I am instituting this electronic prescription-management system immediately in a new practice that I recently joined. At this new practice, the pharmacy costs are out of control, and I am hoping to lower the pharmacy utilization expense by as much as $30 per member per month. 5 Improved Workflow for the Physician. Palm-size devices may finally be ready to provide physicians with tools useful during the patient-care process. Previous solutions have required physicians to turn to a traditional work station or carry a laptop computer from room to room. The PPARIS palm-size PC makes it easy for physicians to quickly integrate the system into their daily routine. For example, the PPARIS palm-size units are automatically updated when they are returned to a cradle at the physician s desktop computer. Information is uploaded and downloaded to the unit from a central database. Some systems in development use a radio frequency to provide a constant connection to the server, giving physicians access the latest information when they are in the office. Prescriptions can be transmitted immediately with most systems. After examining a patient, O Leary takes the palm-size unit out of his pocket and, by clicking through the touch screens, he writes the prescription electronically. A screen provides the physician with the relative cost of all available alternatives, enabling informed decisions with respect to weighing a drug s therapeutic viability and the cost of alternatives. When the prescription is complete, O Leary points the device at an infrared port, and a printer clearly prints the prescription or transmits it directly to the pharmacy. Errors caused by illegible handwriting are eliminated. Since O Leary began using the system in March 1999, office-staff productivity at South Florida Internal Medicine Associates has increased tremendously. The savings in administrative time is difficult to quantify, but I estimate that there may be at least ten phone calls a day that my nurse does not have to take from the pharmacy, ten messages she does not have to record and present to me, and ten patient records that I don t have to review before

7 Improving the Delivery of Care and Reducing Healthcare Costs 29 making a prescription-change decision. In addition, this information does not need to be phoned or faxed back to each pharmacy. The time savings are considerable, said O Leary. 5 O Leary can write prescriptions at the point of care, with the confidence that the medication is covered. Patients benefit because they receive a neatly printed, accurate prescription that will be filled on their first visit to the pharmacy or by having the prescription sent directly to the pharmacy, avoiding lost paper prescriptions. This system allows me to be proactive when prescribing medications for my patients by informing them of alternatives, says O Leary. This really allows patients to participate in the decision-making process. The benefit to the patient is clear. I can make a case-by-case decision for patients that require various therapies, and get them involved in the decision-making process. When a patient arrives at the pharmacy, there is legible prescription that will be filled. The patient no longer has to worry about interpretation errors, or finding out that a medication is not covered by the applicable insurance plan. And I don t have to worry about a person with a respiratory tract infection not getting an antibiotic and presenting at the hospital on Monday with pneumonia. 5 Changing the Face of Healthcare In the information era, healthcare will change dramatically and substantially. The Internet and hand-held devices will provide greater access to information, which will reduce healthcare costs and improve the delivery of care. New developments in technology will lead to greater benefits for consumers and healthcare providers in the new millennium. References 1. Medical Records Institute, 1999, Survey of Electronic Health Record Trends and Usage, 2. HCFA, 3. Weiss, R. Medical Errors Blamed for Many Deaths: As Many as 98,000 a Year in U.S. Linked to Mistakes. The Washington Post, Nov. 30, 1999, p. A Schiff, Gordon D., and Rucker, T. Donald. Computerized Prescribing: Building the Electronic Infrastructure for Better Medication Usage. Journal of the American Medical Association, 1998; 279, O Leary, Dennis. Telephone interview, Jan Note: Information in this document, including URL and other Internet Web site references, is subject to change without notice. Unless otherwise noted, the example companies, organizations, products, people and events depicted herein are fictitious and no association with any real company, organization, product, person or event is intended or should be inferred. Complying with all applicable copyright laws is the responsibility of the user. Without limiting the rights under copyright, no part of this document may be reproduced, stored in or introduced into a retrieval system, or transmitted in any form or by any means (electronic, mechanical, photocopying,

8 30 Noffsinger, Chin recording, or otherwise), or for any purpose, without the express written permission of Microsoft Corporation. Microsoft may have patents, patent applications, trademarks, copyrights, or other intellectual property rights covering subject matter in this document. Except as expressly provided in any written license agreement from Microsoft, the furnishing of this document does not give you any license to these patents, trademarks, copyrights, or other intellectual property Microsoft Corporation. All rights reserved. Microsoft and Windows are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries. The names of actual companies and products mentioned herein may be the trademarks of their respective owners. About the Authors Richard Noffsinger is manager of the Worldwide Healthcare Group at Microsoft Corporation in Redmond, Washington. Steve Chin, RPh, is pharmaceutical industry manager at Microsoft Corporation in Redmond, Washington.