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

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.

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.

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.

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.