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How difficult is it for doctors to share patient information electronically? Apparently pretty difficult: when a clinic in Minnesota managed to transmit some immunization records to the local public-health department this year, the U.S. government trumpeted the feat in a press release.

U.S. doctors and hospitals are on their way toward adopting electronic patient records for all Americans. After that, the next step in electronic medicine will be to create “health information exchanges.” Imagine that wherever you go, your electronic health record will follow, preventing doctors from unnecessarily repeating a test or prescribing a drug you are allergic to. That could save a lot of money, considering that as many as 30 percent of laboratory tests are repeated because doctors don’t have access to patients’ earlier results.

Yet today U.S. doctors and hospitals struggle to exchange even basic patient information electronically. The reasons include laws protecting patient privacy. But most of all, the problem is that exchanging data hasn’t been in anyone’s economic interest. “The problem with information exchange is not the technology—it’s around the business case,” says Farzad Mostashari, the federal government’s coördinator for health information technology. Hospitals and doctors simply don’t see much economic reason to share information with competitors, or even to avoid repeating tests.

That may explain why Surescripts, a little-known company started by the nation’s retail pharmacists and drug distributors to electronically route prescription orders, has quickly managed to become the country’s single biggest exchanger of health information. It is on track this year to process over three billion electronic messages between pharmacies, insurance plans, and some 286,000 doctors, and it plans to begin trading other types of clinical data as well.

Surescripts, a private company based in Arlington, Virginia, hit on an economic model for data exchange that works partly because there is no direct charge to doctors. Instead, Surescripts makes money by charging a few cents to pharmacies on each transaction. Pharmacies save money by eliminating data entry and by selling more drugs (since about 28 percent of paper prescriptions are never filled by patients, while electronic ones are billed instantly).

Surescripts now handles more than 20 percent of prescriptions nationally and is trying to position its network as a way for doctors to trade clinical information about patients. In July, for instance, the American Academy of Family Physicians (AAFP) teamed with Surescripts to launch a Web portal that lets family doctors send each other encrypted messages and attach x-rays or photos of a rash.

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Tagged: Business, Business Impact, The Era of E-Medicine

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