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interactions and improve the accuracy of prescriptions.  In “To Err is Human,” the Institutes of Medicine stated that prescription errors in non-hospital settings can result in as many as 7,000 deaths annually.54  As the number of Americans on prescription drugs grows, so does the potential for harmful prescription errors.  More recently, in 2008, one study found that 51 percent of Americans are taking at least one prescription drug for a chronic condition.  The elderly are more likely to take multiple medications, with 25 percent taking five or more medicines regularly, putting them at risk for not just errors, but adverse drug interactions.  

A small fraction of California’s health care providers use health information technology in prescriptions.  In fact, just 25 percent of physicians use electronic prescriptions,55 and just 1.2 percent of prescriptions are electronic.56  Medi-Cal’s high administrative cost for providing prescription drugs, $13.18 per prescription, is higher than in any other state.57  

Current Status of California

The California HealthCare Foundation (CHCF) is spearheading efforts to expand e-prescribing in California.  CHCF operates an e-prescribing advisory group and is in the process of convening a stakeholder meeting of all relevant participants.  The Foundation is also supporting several pilots  to expand e-prescribing in California safety net providers and Medi-Cal patients.  This includes the Northern Sierra Rural Health Network, which is working with local providers and the SureScripts-RxHub network to provide e-prescriptions for Medi-Cal patients, and L.A. Care Health Plan, a public plan serving low-income populations in Los Angeles County.

Change Options

Given Medi-Cal’s higher administrative costs, it could be possible to redirect some of that administrative spending in a waiver towards e-prescribing.  Ideas could include:

Incentives for Plans.  Medi-Cal managed care plans could be required to meet e-prescribing benchmarks within their networks, earning bonus payments along the way.

E-Prescribing Bonus.  Understanding the benefit to safety net providers, Medi-Cal could for a period of time pay a higher FFS rates for prescriptions filled through e-prescribing.

E-Prescribing Grants.  Given the potential savings to Medi-Cal, it is at least conceivable that a waiver could be approved to make grants to safety net providers to achieve e-prescribing.    

54 Institute of Medicine, “To Err is Human: Building a Safer Health System,” November 1999.

55 California HealthCare Foundation, “The State of Health Information Technology in California: Use Among Physicians and Community Clinics,” 2008.

56 Sure Scripts, “National Progress Report on E-Prescribing,” December 2007 and Sure Scripts Pharmacy Health Information Exchange, 2008.  Statistics do not include prescriptions through Kaiser Permanente, the Veterans Administration, or faxed prescriptions

57 National Study to Determine the Cost of Dispensing Prescriptions in Community Retail Pharmacies, Grant Thornton, LLB, January 2007.

Health Management Associates/Harbage ConsultingPage 42

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