BILL ANALYSIS                                                                                                                                                                                                    







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          |Hearing Date:June 25, 2001     |Bill No:AB                |
          |                               |1589                      |
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                    SENATE COMMITTEE ON BUSINESS AND PROFESSIONS
                             Senator Liz Figueroa, Chair

                       Bill No:        AB 1589Author:Simitian
                    As Amended:April 30, 2001          Fiscal:Yes

          
          SUBJECT:  Healing arts: electronic transmission of  
          prescriptions.
          
          SUMMARY:  Requires the Medical Board in consultation with  
          the Board of Pharmacy to conduct a study on the electronic  
          transmission of prescriptions by physicians.

          Existing law:

          1)Establishes the Medical Board of California within the  
            Department of Consumer Affairs to regulate and license  
            physicians and surgeons and to perform various duties  
            relating to other healing arts practitioners.

          2)Establishes the California State Board of Pharmacy to  
            regulate and license the practice of pharmacy.

          3)Prohibits dangerous drugs or devices from being sold or  
            furnished without a prescription, and defines a  
            "prescription" as an oral, written, or electronic  
            transmission order issued by licensed prescribers, as  
            specified.  Further defines "electronic transmission  
            prescription" as including both image prescriptions  
            (facsimile) and date prescriptions electronically  
            transmited from a licensed prescriber to a pharmacy.

          4)Requires generally that an oral or an electronic data  
            transmission be reduced to writing by the pharmacist as  
            soon as practicable, or recorded and stored  
            electronically under specified circumstances.  






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          5)Allows the patient to have an electronically transmitted  
            prescription to a pharmacy of their choice or to have a  
            written prescription.

          6)Permits a prescriber to electronically enter a  
            prescription into a pharmacy's or hospital's computer  
            from any location outside of the pharmacy or hospital  
            with the permission of the pharmacy or hospital, unless  
            the prescription is for specified controlled substances.

          7)Provides that it is the intention of the Legislature that  
            pharmacies in this state have the ability to adopt new  
            technologies involving the electronic transmission of  
            prescriptions to reduce the occurrence of dispensing  
            errors and to improve service to California.

          This bill:

          1)Makes Legislative findings that in 1993, approximately  
            7,000 deaths occurred in the United States as a result of  
            medication errors.  

          2)Makes further findings that illegible prescriptions  
            result in more than 150 million inquiries each year by  
            pharmacists for clarification of the prescription and  
            that while technology exists or electronic transmission  
            of prescriptions, less than 5 percent of physicians and  
            surgeons use this technology.  

          3)Requires the Medical Board to consult with the Board of  
            Pharmacy and commission a study that evaluates the  
            electronic transmission of prescriptions by physicians  
            and surgeons and report its results to the Legislature on  
            or before January 1, 2003.

          4)Specifies that the reports should include recommendations  
            to encourage physicians and surgeons to use this method  
            to transmit prescriptions and identify systems to protect  
            patients, including the issuance of a "digital  
            certification."

          5)Defines "digital certification" as an electronic  
            signature that verifies the identity of the physician and  






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            surgeon who is transmitting the prescription  
            electronically. 

          FISCAL EFFECT: According to the Assembly Appropriations  
          Committee Analysis dated May 16, 2001, minor one-time costs  
          to the Medical Board ranging from $50,000 to $100,000  
          (Medical Board Contingent Fund), to commission the study.

          COMMENTS:
          
          1.Purpose.  This bill is sponsored by the author.   
            According to the author, the Assembly Health Committee  
            has been researching various E-health issues, including  
            E-prescription issues.  The Palo Alto Medical Foundation  
            has begun testing a new Web-based system that allows  
            patients to view their own medical records, request  
            appointments and renew prescriptions on line.  The author  
            further explains that New Jersey is considering new rules  
            to allow physicians to E-mail prescriptions to a  
            pharmacy, a move aimed at reducing errors caused by  
            illegible handwriting.  Also, as the industry explores  
            options to make health care delivery more efficient and  
            cost-effective, there is a need to develop standard  
            protocols regarding signature verification, security, and  
            interfacing with current requirements relative to  
            prescribing drugs or oversight of drug prescription will  
            become unsound.

          2.Studies Indicate a Need for More Efficient Practices and  
            Processes to Prescribe Medications and Transmit  
            Prescriptions.  In November of 1999, the Institute of  
            Medicine (IOM) released a report, "To Err is Human:   
            Building a Safer Health System," which found that  
            approximately 7,000 hospital patients die annually across  
            the country from preventable medication-related errors.   
            The IOM report found that 2 out of every 100 hospital  
            patients will die or be injured as a result of  
            preventable medication errors, and that each medication  
            error increases the cost of a hospital stay by an average  
            of $4,700.  The IOM report included several  
            recommendations to address the medication-related errors,  
            including that health care organizations and the  
            professionals affiliated with them establish patient  
            safety programs which incorporate well-understood safety  






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            principles, such as standardizing and simplifying  
            equipment, supplies, and processes, and that health care  
            organizations implement proven medication safety  
            practices .

          A white paper from the Institute for Safe Medications  
            Practices (ISMP) called for the elimination of  
            handwritten prescriptions within 3 years.  The ISMP paper  
            stated that the health care industry has been slow to  
            adopt new technologies, and that prescription writing is  
            perhaps the most important paper transaction remaining in  
            our increasingly digital society.  The ISMP argues that  
            the hurdles until very recently have been clinicians'  
            reticence about computers, a lack of hardware and  
            software that would conveniently allow prescribers to  
            select medications electronically, and fear of the costs  
            associated with such technology.  The ISMP asserts that  
            fortunately, the advent of wireless hand-held devices is  
            making it increasingly possible to solve the "handwriting  
            crisis," perhaps on all three counts. 

          3.Arguments in Support.  The  California Medical Association   
            (CMA) is in support of this measure and indicates that  
            the CMA continues to examine methods whereby physicians  
            can reduce medical errors through their Project SAFE CARE  
            (Strategic Alliance for Effective Care and Reduction of  
            Errors) Task Force.  The Project is currently reviewing  
            several vendors that may have the capacity for  
            electronically prescribing medications in order to  
            develop important criteria that physicians may consider  
            when taking advantage of this technology.  It is the  
            belief of the CMA that this bill will assist physicians  
            in accomplishing their goal of ensuring patient safety  
            and reducing medical errors.  

          The  California State Board of Pharmacy  (Board) is also in  
            support of this bill and indicates that electronic  
            prescribing has been proven to substantially reduce the  
            incidence of medication errors and has the potential to  
            bring substantial operating efficiencies to prescribing  
            and dispensing processes.  As explained by the Board,  
            electronic prescribing has begun to take hold in the  
            hospital setting and experience in one hospital found a  
            50% reduction in medication errors and a two hour  






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            reduction in the time required to process the order and  
            administer the drug to the patient.  A study required by  
            this bill will provide recommendations on how to speed up  
            the adoption of this technology in other settings.

           
          4.Support if Amended. The  California Optometric Association   
            (COA) expresses its support for this measure if it is  
            amended to be provider neutral.  The COA is concerned  
            that the language limits the study to recommendations  
            pertaining physicians and surgeons and that there are  
            other health care providers who issue prescriptions and  
            should be included in the study as well.
          They suggest that the term "physicians and surgeons" be  
            replaced by "  licensed health care providers acting within  
            the scope of their license  ."
          

          NOTE:  Double-referral to the Senate Judiciary Committee.


          SUPPORT AND OPPOSITION:
          
           Support  :  California Medical Association
                  California State Board of Pharmacy      

           Support if Amended  :  California Optometric Association 


            Opposition  :None Received





          Consultant:Bill Gage