Effect of electronic prescribing with formulary decision support on medication use and cost

Abstract

Background: Electronic prescribing (e-prescribing) with formulary decision support (FDS) prompts prescribers to prescribe lower-cost medications and may help contain health care costs. In April 2004, 2 large Massachusetts insurers began providing an e-prescribing system with FDS to community-based practices.

Methods: Using 18 months (October 1, 2003, to March 31, 2005) of administrative data, we conducted a pre-post study with concurrent controls. We first compared the change in the proportion of prescriptions for 3 formulary tiers before and after e-prescribing began, then developed multivariate longitudinal models to estimate the specific effect of e-prescribing when controlling for baseline differences between intervention and control prescribers. Potential savings were estimated using average medication costs by formulary tier.

Results: More than 1.5 million patients filled 17.4 million prescriptions during the study period. Multivariate models controlling for baseline differences between prescribers and for changes over time estimated that e-prescribing corresponded to a 3.3% increase (95% confidence interval, 2.7%-4.0%) in tier 1 prescribing. The proportion of prescriptions for tiers 2 and 3 (brand-name medications) decreased correspondingly. e-Prescriptions accounted for 20% of filled prescriptions in the intervention group. Based on average costs for private insurers, we estimated that e-prescribing with FDS at this rate could result in savings of $845,000 per 100,000 patients. Higher levels of e-prescribing use would increase these savings.

Conclusions: Clinicians using e-prescribing with FDS were significantly more likely to prescribe tier 1 medications, and the potential financial savings were substantial. Widespread use of e-prescribing systems with FDS could result in reduced spending on medications.