Business Report

Pharmacists Offer an Rx for Health Communication

A company set up to handle prescription orders could be the key to the health-care Internet.

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.

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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.

“We’ve been doing pharmacy-to-doctor transactions, so the obvious conclusion was to support doctor-to-doctor communication,” says Cris Ross, executive vice president and general manager of Surescripts’ clinical interoperability business.

As simple as the software may seem—it’s not much more than secure e-mail—nothing like it is generally available to doctors, who still rely on fax machines or couriers. “Health care wants and loves this kind of exchange,” says Steven Waldren, director of the AAFP’s Center for Health IT. “The problem has been that there has been no one willing to pay to build the network, or pay for the transactions.”

Subscribing to the AAFP portal costs doctors $15 per month, a price Waldren thinks is low enough for his members to accept. “Our doctors run small businesses,” he says. “If it’s going to cost $5,000 for infrastructure and $500 a month, then they won’t do it. We really think there needs to be a very lightweight exchange, and that is what we are pushing.”

The government has been trying to coax its own data-exchange standards into existence through the Direct Project, an effort started in March 2009 to “specify a simple, secure, scalable, standards-based way” to send health information over the Internet. That effort involves a score of corporate players including Microsoft, Siemens, and Google.

Other efforts to create health information exchanges in the U.S. have occurred mostly at regional levels. One of them, the Indiana Health Information Exchange, includes 70 hospitals and around 19,000 physicians in that state and in Chicago. Waldren says the problem is that even such large networks are still too small to force insurance or lab testing companies to adopt their technology protocols. “No one in health care has had enough market share to drive standardization,” he says.

Some experts think Surescripts is big enough to do so, effectively overtaking the government standard-setting plan, at least for basic data transfers. Analysts at Chilmark Research, in Cambridge, Massachusetts, call Surescripts the “closest thing the U.S. has to a de facto national health information network.”

Surescripts says it supports government protocols and that more than 200 different programs for managing electronic patient records already interface with its e-prescribing network, and that regional data exchanges and large health-care companies will be able to use the network in the future. “We think we can simplify things,” Ross says. “The doc plugs into us once, and we plug into many health information exchanges. Our approach is to provide a commercially viable, low-cost implementation. We think we will dominate.”

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