The Surescripts service provides three main functions—communication of patient drug benefits information, routing of prescriptions themselves, and compilation and reporting of patient medication histories.
Surescripts and others with financial stakes in seeing e-prescribing proliferate stress its value in terms of improved safety, quality of care and convenience to providers. But there are billions of dollars at stake, too.
Surescripts officials declined a request to provide revenue or income totals for its operations because it is privately held. But they are quite open about stressing the potential financial benefits of the system to its users.
A PBM-funded study, for example, estimates that electronic-prescribing levels induced by the American Recovery and Reinvestment Act of 2009 will save the federal government $22 billion and all payers $56.2 billion from 2009 through 2018 in lower drug and medical costs.
Pharmacies and PBMs pay most of the freight for Surescripts operations with charges based on volume of electronic prescriptions they handle over the Surescripts network. According to Surescripts, the returns on those investments make e-prescribing a very good deal for them, too.
Pharmacies moving to handling prescriptions electronically can reduce staff time by 27% for new prescriptions and 10% for prescription renewals, or labor savings valued at about $1.07 each for new prescriptions and 41 cents for renewals, according to Surescripts, which cited a report first published in 2005 in
America's Pharmacist, the journal of the National Community Pharmacists Association.
In addition, a 2007 study by Surescripts and the Walgreens drugstore chain found that pharmacies saw 11% more prescriptions being dispensed when physicians e-prescribe than when they write prescriptions on paper. The reason is not entirely clear and would require further research to prove, according to Surescripts spokesman Rob Cronin, but one strong suspicion is that pharmacies then have knowledge that a prescription has been written and can follow up to let the patient know a prescription has been prepared and is waiting for them. “If it isn't electronic, the pharmacy has no knowledge it's there,” Cronin said. “A patient walks out with a piece of paper.”
For payers and the PBMs that work for them, prescribing rates for generics rise by 3.7% over a control group while the cost per prescription was 10.1% lower, according to a 2005 analysis by WellPoint/Wellinx referenced in the recent PBM-funded report. The ability to transmit electronic prescriptions directly to mail-order pharmacies, a key PBM service, boosts the use of mail orders by 10%, twice the increase for control, according to a 2003 study cited in the PBM-funded report.
One potential—and possibly hugely profitable—product line Surecripts officials say they won't get into is data-mining and selling of patient prescription drug information.
Surescripts, in its privacy statement online, says it “does not mine personal health information available via the Surescripts network, either for Surescripts' own purposes or for the purposes of third parties.” In addition, Surescripts says it “does not rent or sell personal health information available via the Surescripts network.” The company says it has “taken steps to prevent third parties from using the system to influence physician prescribing decisions inappropriately,” “implemented procedures designed to respect a patient's pharmacy choice” and adds that physicians using Surescripts “will not receive commercial messaging at the point of care” (like advertisements from pharmaceutical companies or other third parties).
EHR vendors and other providers of e-prescribing software must be certified to connect to the Surescripts network, “and only technology companies that agree with this philosophy are allowed to connect,” the company statement said.
And yet, the combined SureScripts and RxHub databases house a treasure-trove of information, considering pharmacies and PBMs sell prescription drug information to data-miners who, in turn, sell it for drug marketing and medical underwriting, which is a multibillion-dollar business. Surescripts joined data-miner Wolters Kluwer Health and the National Association of Chain Drug Stores in filing “friend of the court” briefs supporting data-miners IMS and Verispan in challenging a New Hampshire law. The law limits the commercial use of prescription information containing patient- and prescriber-identifiable data to “pharmacy reimbursement; formulary compliance; care management; utilization review by a healthcare provider, the patient's insurance provider or the agent of either; healthcare research; or as otherwise provided by law.”
Last month, the U.S. Supreme Court
declined to review an appeals court decision upholding the New Hampshire law.
Three Surescripts officials interviewed for this story, however, were adamant that their company is a service provider, not a data-miner.
Harry Totonis, who is CEO of the merged SureScripts and RxHub—now call Surescripts—was emphatic: “We do not sell data.”
Rick Ratliff, president of the Virginia division of Surescripts, and the acting CEO of SureScripts at the time of the merger with RxHub, added: “What the PBMs or the pharmacies do with their data, we don't have any transparency for that. They may do that, but we don't do that.”
J.P. Little, president of the Minnesota division of Surescripts, and the acting CEO of RxHub at the time of the merger, added that the PBMs that founded RxHub have from the beginning curbed the ability of RxHub to mine and sell data.
“The PBMs didn't want us to do things that they were doing, because we would be bigger and badder than them, so they put real tight restrictions on what we could do,” Little said.
Totonis said Surescripts is looking for other ways to broaden its financial base. One added service has been to sell patient prescription histories to hospitals to help them with medication reconciliation, a Joint Commission accreditation requirement. Ratliff said that thus far fewer than 100 hospitals are customers of this service. Another new line is a recently launched project with a vendor of in-store clinics, to which Surescripts is offering to transmit a summary in the Continuity of Care Record format, transferring it to the patient's primary-care physician. So far, however, incomes from these ancillary services have been “insignificant,” less than 5% of the total revenue for Surescripts, Ratliff said.
Surescripts doesn't charge doctors or vendors directly to interface or use its network, but for EHR vendors “developmentwise, there is definitely a cost,” said Justin Barnes, a vice president of Carrollton, Ga.-based Greenway Medical Technologies. 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.
“There is a lot of money that goes into this in different areas, for implementing it, developing it within your product life cycle and long-term support," Barnes said. "There is a lot to it. I don't think people understand the millions of dollars that go into this.”
Surescripts—though it might not yet hold an actual monopoly in the market, is so dominant—“acts as a monopoly and can set the rules for the entire industry,” Barnes said. And, since Surescripts is a privately held company, “Who has oversight in this arena?”
Barnes noted that the Certification Commission for Healthcare Information Technology and the Healthcare Information Technology Standards Panel, both federally supported but private organizations have similar, near monopolies. Even though the federal government requires EHRs to be certified (and CCHIT is, thus far, the only HHS-recognized EHR certification body) and HHS also requires vendors to use HITSP-harmonized standards under several of its IT subsidy programs, there are fundamental differences between the CCHIT and HITSP positions and the dominant position of Surescripts, Barnes said. “CCHIT and HITSP are monopolies, but there is transparency. That is not the case with Surescripts,” he said.
Little denies this, saying its “road map” of what it requires and where it is going is publicly available, adding the company has semiannual meetings of its constituents and “every year the meetings get bigger and bigger. People know exactly what we've got going on,” he said.
Physician and e-prescriber Mario Motta is a Salem, Mass.-based cardiologist and president of the Massachusetts Medical Society. Motta's state led the nation in 2008 in e-prescription adoption, having moved electronically 6.7 million prescriptions last year, or 20.5% of all “eligible” prescriptions that year, according to Surescripts data.
Motta uses the EHR from Partners HealthCare System, Boston, which has an e-prescribing tool “baked in.” “It would not make any sense to do an electronic medical record without it.” Motta isn't losing sleep over Surescripts' dominance just yet.
“My attitude is, competition is good,” Motta said. “The more players in the system, the better, but we've not heard any specific complaints about this issue.” Motta also said Surescripts may not enjoy its comfy-cozy market position for very much longer.
“I think with $34 billion on the table, the competition is going to heat up,” he said.
In fact, it already has.
Two of the few remaining Surescripts competitors became one earlier this month as claims clearinghouse
Emdeon, Nashville, announced it had acquired pharmacy transactions services provider eRx Network, Fort Worth, Texas. Both firms are privately held and both brought their own e-prescribing capabilities to the deal.
In a July 2 news release announcing the acquisition, Emdeon CEO George Lazenby said that the combined companies “will enjoy a significant presence in e-prescribing, one of the fastest growing sectors in healthcare transaction processing.” In a
June 16 Securities and Exchange Commission filing—Emdeon has pending an initial public offering of common stock—the company claimed nearly $854 million in revenue. It also said it moved 4 billion electronic healthcare transactions in 2008, including roughly half of all commercial healthcare claims delivered electronically in the U.S., and including processing “approximately 1 million electronic prescriptions per month.” (In comparison, Surescripts reports it routed 68 million prescriptions electronically in 2008.)
Mark Lyle, the former CEO of eRx Network, now senior vice president of the pharmacy services group for Emdeon, said that he believes the combined companies now provide the e-prescribing connectivity to 10 EHR vendors and stand-alone e-prescribing software systems used by high-prescribing, office-based physicians.
“No one has connectivity to all of the different physician systems out there,” Lyle said. “We believe that right now our volume is roughly 20% of the e-prescription transactions. That gives you an idea why we are mildly confident we have a shot at doing this.”
Some of that flow passes through the Surescripts network, Lyle said, as do, for now, all of the transactions with the PBMs. Still, Lyle said, many of the smaller PBMs that are not one of the three PBM giants that founded RxHub and are partners in Surescripts might like to see a competing exchange emerge that is not owned in part by competing PBMs.
“You can bet there is some heartburn between the PBMs who are not shareholders of RxHub,” Lyle said. But mainly, the two companies have invested heavily in a technology infrastructure that, like any machine, makes its owners more money the more efficiently it is used.
“You have to invest in your infrastructure, and once you meet that nut, transactions over that start contributing heavily to the profit side,” Lyle said. “We want to leverage our significant infrastructures that route billions of administrative and billing transactions today.” Lyle said the aim is to add clinical transactions, such as e-prescribing and routing laboratory information “into that infrastructure.”
Going forward, both Emdeon and Surescripts will face the same formidable challenge—penetrating the small-office market, a veritable Death Valley so far for healthcare IT.
Ratliff said that 70% of prescriptions moving through the Surescripts network are written on EHRs, with the remainder on stand-alone e-prescribing systems. A “sizable percentage” of Surescripts' current physician users are in large practices, Ratliff said, just as EHR data shows most physicians currently using EHRs are in larger groups.
And yet, “the ones that are writing a majority of prescriptions are the primary-care doctors in the small practices,” Ratliff said. “There is not a silver bullet in this area, but it is an important last mile component that we have to attack.”
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