Part one of a two-part series: (Access part two)
This month marks the one-year anniversary of the merger of the two largest electronic-prescribing exchanges, SureScripts and RxHub, creating a market-dominant, privately held, for-profit company just in time for the federal government to all but mandate that physicians e-prescribe.
So, how is the merger going? The answer depends on who's talking.
“The question you may be asking is, has the merger yielded any benefits and we're happy to say, it absolutely has,” said Harry Totonis, CEO of the merged company, now called Surescripts.
Totonis only recently joined Surescripts—in April—after serving as head of adviser services at MasterCard, and previously working 14 years as a consultant with Booz Allen Hamilton, which works extensively in healthcare as well as for the federal government in defense and national security and intelligence programs.
“E-prescribing volume has just skyrocketed and we've handled that without adding a lot of new people,” Totonis said. “We're processing twice as many transactions with relatively the same number of people. The efficiency we get is benefiting everyone.”
Justin Barnes is a vice president of Carrollton, Ga.-based Greenway Medical Technologies. In that post, he oversees corporate development, strategy, marketing and government affairs for the electronic health-record system vendor. Barnes also serves as chairman of the Electronic Health Record Association, a trade group for EHR vendors that is an arm of the Healthcare Information and Management Systems Society.
Vendors, Barnes said, while not hostile to Surescripts having such predominance, are “not completely comfortable” with the situation, either.
“It's kind of pushed on us,” Barnes said. “When you have no competition, they may not want to listen to people. Competition breeds excellence at the end of the day. It always has and always will.”
The merger, which seems natural now, pooled the resources of two competing companies whose rival sponsors that either are themselves or have members that are still battling for market share in prescription drug sales. Both SureScripts and RxHub were formed in the aftermath of the 2000 bursting of the dot-com bubble that wiped out scads of e-prescribing startup companies.
Nevertheless, in February 2001, the then-three largest pharmacy benefit management companies, AdvancePCS, (acquired by CareMark Rx, now CVS Caremark) Express Scripts and Medco Health Solutions, formed RxHub to serve as their e-prescribing gateway.
With their members' business interests thus threatened, two retail pharmacy trade groups, the National Community Pharmacists Association, representing chain drugstores, and the National Association of Chain Drug Stores, representing community pharmacies, countered in August 2001. The pharmacy groups launched SureScript Systems, doing business as SureScripts, a developer of its own two-way communications network between physicians and retail pharmacies.
The two rival exchanges competed for seven years, with neither gaining dominance over the other, and each carrying on long campaigns of network building, standards harmonization, systems development, and lobbying, marketing and public relations work.
Meanwhile, prescribing physicians merely yawned.
By 2006, just 16,000 office-based prescribers were using e-Rx systems, according to Surescripts data, a tiny fraction of the 611,000 physicians and other office-based clinicians the company estimates have prescription-writing authority in the U.S. healthcare system. But the pace of e-prescribing was about to quicken.
In May 2007, SureScripts firmed up its grip on the electronic prescription exchange market when it acquired the
ProxyMed e-prescribing network from IT provider MedAvant.
On July 1, 2008,
SureScripts and RxHub announced their merger.
Two weeks later, Congress overrode President George W. Bush's veto and passed the Medicare Improvements for Patients and Providers Act. The MIPPA aimed to induce physicians to e-prescribe with a mix of financial incentives and penalties. Participating physicians can see a 2% increase in Medicare Part B charges in 2009 and 2010, with the payments shrinking to 0.5% by 2013. The law also calls for a 1% deduction in Part B charges, beginning in 2012 increasing to 2% in 2014, for those failing to e-prescribe.
By the end of 2008, the ranks of e-prescribers had swollen to 74,000, in part because of the MIPPA. But the real boost in e-prescribing is likely to be felt soon from the American Recovery and Reinvestment Act of 2009, which became law in February. Its estimated $34 billion in healthcare information technology subsidy payments begin flowing in 2011 and its penalties start in 2015.
The stimulus law specifies e-prescribing by office-based physicians as one of the criteria for “meaningful use” of an EHR that physicians must meet to qualify for IT subsidy payments of up to $48,400 under Medicare and as high as $63,750 under Medicaid. Promoters of e-prescribing figure the stimulus law will dramatically accelerate physician adoption of e-Rx systems.
A March
study funded by the Pharmaceutical Care Management Association, a trade group for a dozen of the largest PBMs, estimates that the stimulus bill will boost physician e-prescribing twice as fast as the MIPPA. It projects that 75% of doctors will be writing and sending prescriptions electronically by 2014. Already, the volume of e-prescriptions is soaring, albeit from a low launch pad of 11 million prescriptions routed in 2006 to 68 million in 2008, but still represents a tiny fraction of the 4.4 billion prescriptions written.
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