Strategic Management in Healthcare: E-Prescribing

Paper Info
Page count 5
Word count 1410
Read time 6 min
Topic Health
Type Essay
Language 🇺🇸 US


Healthcare organizations are increasingly recalibrating their strategies to meet the current needs for patient care. Integration of information technology has, for some hospitals, emerged as an efficient way of addressing diverse medical conditions while lowering physician fatigue. However, the digitalization of the patient care process is not a guarantee that the goals of the clinical setting will be achieved. In some cases, the digitalization process may result in an improper use of resources. Therefore, it is vital to understand the opportunities, threats, advantages, and disadvantages that any medical technology can potentially have before making decisions on its implementation. E-prescribing is one of the modern advancements in healthcare involving transmission of prescription or related information through electronic media. The transaction can occur, directly or via an intermediary, between a dispenser, pharmacy, and health plan benefits manager. The aim of this report is to evaluate the pros and cons of e-prescribing, summarize its standards, evaluate projected cost ns time savings, and comment on the 2013 e-prescribing penalty.

Pros and Cons of E-prescribing

One of the advantages of using e-prescribing is that the physicians can access the patient’s medication histories, insurance plan formularies, clinical decision-support system, and electronic prior authorization. The implication is that the doctor will be in a better position to avoid errors (Klepser et al., 2016). Moreover, the electronic prescription can be customized to provide real-time data streaming, which indicates if patients are adhering to their medication. With this information, the doctor can understand there are drugs which need to be avoided for a particular client due to issues such as allergy or resistant disease.

The other advantage is that the model allows healthcare providers to access the medicines that the patient has covered when making the prescription. With this system, both the patient and the organization can potentially be cost-effective. For example, one study found that e-prescribing formulary decisions at a rate of 3.3% can result in savings of $845,000 for 100,000 patients (Klepser et al., 2016). In many states, healthcare has become a burden due to the increase of people living with chronic diseases. Cost-saving is thus needed to build the economy and ensure that money is channelled to other resources.

Time is a vital resource in the healthcare industry, and e-prescribing can increase efficiency in many ways. First, since the doctor transmits data using the internet, that pharmacist can receive information within seconds as opposed to when a person is sent to hand-deliver the prescription. Furthermore, the pharmacist will not have difficulties reading the handwriting of the doctor and seeking clarification since the information is typed (Oktarlina, 2020). The implication is there will be less errors, and the process will take a shorter duration.

There are also a few disadvantages of using e-prescription, key among them being that e-prescription can result in errors for some patients, such as those who have diabetes. According to Ratanawongsa et al. (2017), “many insulin products have similar brand or generic names but differ in onset and duration of action” (p. 3). As a result, a wrong medication may be selected due to confusing between the brand name or failure to distinguish the “tall man letters” (Ratanawongsa et al., 2017, p. 3). Some e-prescribing terminologies are different from what is taught in clinical and education literature. Unless there are standardization and agreement with vendors on naming, confusion may arise.

Few professionals in the healthcare sector have the competencies in the use of digitalized systems. The lack of training is, thus, a major disadvantage in implementation of the e-prescribing (Oktarlina, 2020). Moreover, people are often afraid of change, so that even if there are resources to provide basic education on proper use of e-prescription, there is still possibility that some medics will resist the transition and stick with the old format. The implication is that the e-prescription will raise controversies.

Last but not least, e-prescribing can also result in poor coordination and compensation of healthcare workers. For instance, coordination between nurses, pharmacists, physicians, and physicians may be affected if there is no benefit standardization. Juszczyk et al. (2016), also warns of possible misuse of anti-biotic drugs if e-prescription is adopted. Moreover, if the coordination is between various hospitals, such as during referrals. The coordination between an institution using e-prescription and another one that uses traditional methods may be complex. The effectiveness may also be influenced by the hospital structure and location. For example, in rural areas where network penetration is low electronic transmission may be inefficient.

E-Prescription Standards

The National Council for Prescription Drug Programs is an accredited organization that specializes in standard development. The standards are divided into those that are applicable to telecommunications, SCRIPT, ASC X12N-2701/271 Eligibility and Benefit, and the Formulary and Benefit. The communication channels between the benefit management companies (PBMs) and the retail pharmacy dispenser. Incentives for physicians, dentists, health plans, and the institutions are well stipulated (Klepser et al., 2016). The message format should offer communication protocols and requirements for data content. The interoperability of data to be achieved through terminologies and unique identifiers for each medication. Other recommendations are for all pharmacy systems using e-prescription should adopt the commercial compendia source for the names of e-prescribing drugs. In addition, the industry-recognized best vocabulary should be used in electronic prescription.

Projected Cost and Time Savings by HHS

The strategy number for E-Prescribing of Controlled Substances (EPCS) as stipulated by the United States Department of Health and Human Services (HHS) is 321 (See appendix A). According to the latest data that HHS compiled focusing on the category of digital services for e-prescription, the net cost saving for the financial year 2017 is $2.07, and the total amount earmarked for the financial year 2019 is $8 (United States HHS, 2020). These estimates indicate that the use of e-prescribing is cheaper. Although the research on the time saved is not provided, it is expected that there will be minimal movement because data is transferred using the internet.

It is worth noting, that the projections depend on the competencies of the industry to strategically manage their resources when integrating the technology.

The process of implementing the e-prescription should consider contextual factors such as the location, size, average age of healthcare providers, and penetration of technology. Doing a preliminary study to identify unique factors in an organization that can impend or promote adoption of the electronic transmission system is important. The project managers can benchmark in hospitals which are successfully using e-prescription. However, it is important to understand the differences that can make the technology successful in one setting and not in another. The proper planning and research are intended to ensure that human error is avoided during the implementation to minimize resource wastage.

2013 E-Prescribing Penalty

The 2013 e-prescribing (eRx) penalty required all eligible professionals (EB) who did not successfully subscribe to the e-prescribers by 2011 and failed to submit the ten e-treatment claims mid-2012 to be given a penalty of 1.5% for the charges that they reported in 2013. The penalty considered hardship and exclusions if requested on time. I think the introduction of penalties for physicians was an effective move as it helped to change the behaviour of medical workers positively. Specifically, the medics will have to file their work within a stipulated time period to avoid financial deductions. The physicians were, therefore, extrinsically motivated to avoid procrastinating their work.

In addition, I think the decision led to increased data being registered in the electronic health record system. The legalization of this rule reinforced the Health Information Technology for Economic and Clinical Health (HITECH) Act for investment recovery. The doctors who embraced the electronic medical records system received incentives, while those who did not were penalized. However, the penalties negatively affected the physicians who were overloaded with work. They had to work within fixed deadlines and still be responsible for managing their patients. A possible recommendation is to employ people who will work as physician assistants to help in entering electronic data into the computer systems.


The adoption and use of e-prescribing are expected to save time and cost, increase efficiency and reduce error. However, the introduction of this technology can also intensify human error due to poor coordination, few healthcare specialists with informatics training, and standardization. As it is expected with new systems, controversies will always occur before full integration. The effort to standardize the e-prescription will help to alleviate some challenges. Moreover, the e-prescription penalty has resulted in more healthcare providers embracing electronic media records.


Juszczyk, D., Charlton, J., McDermott, L., Soames, J., Sultana, K., Ashworth, M., Fox, R., Hay, A. D., Little, P., Moore, M. V., Yardley, L., Prevost, A. T., & Gulliford, M. C. (2016). Electronically delivered, multicomponent intervention to reduce unnecessary antibiotic prescribing for respiratory infections in primary care: A cluster randomised trial using electronic health records—REDUCE trial study original protocol. BMJ Open, 6(8), e010892.

Klepser, D., Lanham, A., & Cochran, G. (2016). Electronic prescriptions: Opportunities and challenges for the patient and pharmacist. Advanced Health Care Technologies, 2016 (2), 1-11.

Oktarlina, R. Z. (2020). E-prescribing: Benefit, barrier, and adopting challenge in electronic prescribing. Journal of Medicine, 21(2), 98-101.

Ratanawongsa, N., Chan, L. L., Fouts, M. M., & Murphy, E. J. (2017). The challenges of electronic health records and diabetes electronic prescribing: Implications for safety net care for diverse populations. Journal of Diabetes Research, 2017, 1-7.

United States HHS (2020). HHS IT reform cost savings/avoidance.

Appendix A

E-prescribing Cost Saving according to HHS

E-prescribing Cost Saving according to HHS

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EssaysInCollege. (2022, August 20). Strategic Management in Healthcare: E-Prescribing. Retrieved from


EssaysInCollege. (2022, August 20). Strategic Management in Healthcare: E-Prescribing.

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EssaysInCollege. "Strategic Management in Healthcare: E-Prescribing." August 20, 2022.