E-prescribing.

Medication errors cost the health care system $77 billion and cause 7,000 deaths annually, according to the Institute of Medicine. But e-prescribing--the electronic transmission of a prescription between a doctor and a pharmacy--may change those statistics. By eliminating illegible handwriting and vague prescriptions, it is reducing medication errors and helping prevent harm due to improper medication.

The more sophisticated systems provide access to patients' medication histories and can prevent problems caused by drug interactions and drug allergies. They can reduce costs by increasing the use of generic medicines. Providers also can see if patients are filling prescriptions.

Fewer than 20 percent of health care providers, however, now use e-prescribing systems and independent pharmacies have been slow to go electronic. Since last August, all states allow e-prescribing via approved specialized networks.

Several states are rapidly expanding their e-prescribing initiatives in their Medicaid programs to save costs and reduce errors. Florida, Kansas, Mississippi, Missouri and Tennessee offer programs that give providers access to patient medication history based on Medicaid claims data and the state Medicaid drug formulary.

Mississippi officials estimate saving $1.2 million per month. Florida and Tennessee have received federal grants to expand their current Medicaid e-prescribing programs. And 19 states plan to soon add e-prescribing initiatives in Medicaid.

States also are using e-prescribing for state employees. Minnesota's state employee health plan requires that, by 2009, all network pharmacies must accept e-prescribing, and by 2011 all network providers must prescribe electronically. A pharmacy or provider that fails to meet these deadlines faces removal from the state employee health plan network.

By October 2008, New Hampshire plans to be the first state in which all providers can write electronic prescriptions. Anthem Blue Cross Blue Shield, the state's largest payer, is offering access to a discounted wireless plan, free e-prescribing software and a free hand-held computer. And the state and local government health plan offers its 40 highest prescribers free e-prescribing software and hand-held computers.

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The Medicare Prescription Drug Improvement and Modernization Act of 2003 includes a requirement that Part D drug plans support e-prescribing by 2009. The Centers for Medicare and Medicaid Services count e-prescribing as one of the 119 quality measures for which physicians can receive bonus payments of up to 1.5 percent of their Medicare fees.