The Boston Globe reminded us that starting next month, doctors who e-prescribe will get a modest bonus (up to two percent) from Medicare. After two years of carrots, Medicare will reach for the stick and penalize doctors who won't give up their paper prescription pads. This brought to mind this recent study from the Agency for Healthcare Research and Quality on how e-prescribing can bring down drug costs, for patients and the overall system.

Many insurers have drug formularies and tiered pricing to encourage use of generics or specific brand name drugs. But those formularies and pricing categories change frequently. Having an e-prescribing system that is linked to current formulary information helps doctors choose lower cost drugs. The study found it saved $845,000 per 100,000 patients per year and that could rise to $3.9 million, as the systems become more widely available and easier to use. Some of those saving, in the form of lower co-pays, directly help patients.

Researchers at Brigham and Women's Hospital, and Massachusetts General Hospital in Boston examined data collected during 18 months from two major Massachusetts health insurers covering 1.5 million patients. Physicians using e-prescribing with formulary decision support increased their use of generics by 3.3 percent, in a state that already has high generic drug use. The study was released by AHRQ and published in the December 8 issue of the Archives of Internal Medicine.

Those numbers just looked at the savings from the formulary link. But electronic prescribing has "the added and important benefit of improved patient safety by flagging medication errors before they occur," said Dr. Carolyn Clancy, director of the quality agency.

The Globe pointed out, e-prescribing should be more convenient for patients. The Rx goes straight from the doctor to the pharmacy. We won't have to wait in line to drop off the prescription and then come back and wait in line again to pick it up. Fewer mistakes from illegible handwriting. Built-in safety checks for the wrong dose, or drug interactions. The outgoing HHS Secretary Michael Leavitt has estimated that taken all that into account, e-prescribing could save $156 million over five years.

There are obstacles. Putting in the patient data in the first place is time-consuming for the physician office, some small independent pharmacies aren't yet part of the national e-prescribing network and the Drug Enforcement Agency hasn't yet worked out rules and systems for e-prescribing controlled substances including narcotic painkillers. That's about one-in-five prescriptions. Still the Medicare incentives, carrot and stick, should make the transition easier, and anecdotally the doctors quoted in the Globe piece and some we've met ourselves say that once they get over the initial e-prescribing adjustment bump, they wonder what took them so long.