To The Rescue!

Consumers may also get a taste of the new medicine. The same companies are helping providers launch their own so-called physician portals, which allow patients to make appointments, send secure e-mail to doctors and view their own charts and lab results. As part of a pilot project in Silicon Valley, insurers for a group of companies, including Oracle and Cisco, will soon reimburse doctors for certain e-mail consultations. At the end of the trail, WebMD's goal of online, real-time insurance-eligibility checks and claims adjudication is very slowly starting to become a reality.

It's not just about the bottom line. More than a year ago, the Institute of Medicine issued a now famous report that documented up to 98,000 annual avoidable deaths caused by medical errors. Last month the I.O.M. followed that up with a more sweeping indictment of the sorry state of IT in hospitals and doctors' offices. California has passed a bill requiring many hospitals to install technology by 2005 that will help reduce medication errors. "The pen," says Neal Patterson, chairman of health-IT veteran Cerner, "is the most dangerous, wasteful medical device."

Though doctors seem proud of their illegible handwriting, it has a huge cost. Each year pharmacies make 150 million calls to doctors to clarify confusing prescriptions. Today's tech-savvy medical students will probably never use an R pad, but doctors currently write only 1% of prescriptions electronically. "We can take the headache out of their most common practices," says Allscripts CEO Glen Tullman.

Only a few thousand M.D.s have moved to complete electronic prescribing, but almost 100,000 rely on a basic drug database from Epocrates to check out side effects, recommended dosages and interactions. Allscripts' E-prescription product also lets doctors do their dictation and automatically enter the appropriate billing codes for each procedure--thus eliminating a common error that usually results in drawn-out disputes with insurers. The business got a boost in February when the nation's three largest pharmacy benefit managers (PBMs) announced that they were building a standardized network, dubbed RXHub, to let doctors instantly beam e-prescriptions to client pharmacies.

Intelligent digital health records have long been the industry's holy grail, though today just 10% to 15% of all charts are electronic. Their appeal is obvious. It costs about $9 every time a doctor pulls a chart, which is often incomplete. When a patient arrives at an emergency room or calls a doctor, there is seldom time to consult his documented medical history. In the event of a drug recall, wading through stacks of files to find patients at risk isn't an option.

"We're really running small businesses but haven't been given any of the tools to do it," says Orly Avitzur, a Tarrytown, N.Y., neurologist who pays $99 a month for a digital charting program from Medscape. Working at her Dell laptop, Avitzur is automatically prompted to ask her patients about certain symptoms, from dizziness to headaches. She no longer has to shell out $15,000 annually to have her scribbled notes and dictations transcribed, and she can send info to insurers or other consulting doctors in a matter of hours, not days.