Computerized Physician Order Entry (CPOE): What Do We Know?

March 2012

Interest in reducing costly and dangerous medical mistakes made in hospitals has grown in recent years, especially with new advances in health information technology (HIT). Journalist Ted Burnham, recently noted on the NPR: Health Blog that an estimated one in seven hospital patients will suffer some form of error in their care. Approximately one-third of those are prescription drug related. A specific innovation in HIT, Computerized Physician Order Entry (CPOE), including e-prescribing, addresses this problem. In a typical e-prescribing system, a computer, which contains information about each patient and a set of rules for proper dosing, allergies, and drug interactions, is able to review a patient’s current medications, alert the prescriber to any potential conflicts, and then place the order directly with the pharmacy. In addition to being able to prevent harmful drug interactions, electronic prescriptions also reduce mistakes from misread handwriting, miscalculated dosages, and incomplete forms.

Both Burnham and Sarah Kliff, who writes for the Washington Post Blog, recently cited research from two Australian hospitals that experienced a 60 percent drop in such mistakes after implementing an e-prescribing system. At the same time, however, the news media has also pointed out that such systems can give rise to new types of medical error, especially those caused by faulty software design. Reporting on a survey by the Leapfrog Group, a coalition of large employers and other purchasers of health care, Burnham noted that fear of introducing these new sources of medical error are making some hospitals reluctant to implement e-prescribing systems.  Hospitals also report concern over the expense of e-prescribing systems and the difficulty in implementing them. Only 17 percent of responding hospitals currently use an e-prescribing system.

HCFO has funded research on the impact of computerized physician order entry (CPOE) systems on the quality and cost of health care. Information on that grant is included below.

The Costs and Benefits of Health Information Technology: Computerized Physician Order Entry (September 1, 2008 – December 31, 2010). Jeffrey McCullough, Ph.D., University of Minnesota. The researchers measured the quality and cost effects of clinical information technology (IT), specifically computerized physician order entry (CPOE) systems. They used data from 1997 to 2006 to measure the direct value of CPOE, as well as the value it creates in conjunction with complementary technological and organizational investments. The value of CPOE was based on its casual effect on medical errors, financial costs of medical errors, financial value of CPOE-driven error reductions, and “charge capture,” which the researchers describe as more effective billing and the ability to extract higher payments from Medicare and other payers. The objective of this study was to provide new insight into how clinical IT creates both financial and clinical value, while enhancing the empirical rigor with which that value is measured. Resulting publications include:

  • McCullough, J.S. and E.M. Snir, “Monitoring Technology and Firm Boundaries: Physician-Hospital Integration and Technology Utilization,” Journal of Health Economics, Vol. 29, No. 3, May 2010, pp. 457-7. McCullough and colleagues studied the relationship between physician–hospital integration and its relation to monitoring IT utilization. They developed a theoretical model in which monitoring IT may complement or substitute for integration and test these relationships using a novel data source. Physician labor market heterogeneity identified the empirical model. They found that monitoring IT utilization is increasing in integration, implying that expanded firm boundaries complement monitoring IT adoption. They argued that the relationship between monitoring IT and firm boundaries depends upon the contractibility of the monitored information.

  • McCullough, J.S. et al. “The Effect of Health Information Technology on Quality in U.S. Hospitals,” Health Affairs, Vol. 29, No. 4, April 2010, pp. 647-54. Health information technology (IT), such as computerized physician order entry and electronic health records, has potential to improve the quality of health care. But the returns from widespread adoption of such technologies remain uncertain. We measured changes in the quality of care following adoption of electronic health records among a national sample of U.S. hospitals from 2004 to 2007. The use of computerized physician order entry and electronic health records resulted in significant improvements in two quality measures, with larger effects in academic than nonacademic hospitals. We conclude that achieving substantive benefits from national implementation of health IT may be a lengthy process. Policies to improve health IT’s efficacy in nonacademic hospitals might be more beneficial than adoption subsidies.

  • Parente, S.T. and J.S. McCullough, “Health Information Technology and Patient Safety: Evidence from Panel Data,” Health Affairs, Vol. 28, No. 2, March/April 2009, pp. 357-60. The potential of health information technology (IT) to transform health care delivery has spurred health IT adoption and will likely contribute to increased investments in coming years. Although an extensive literature shows the value of health IT at leading academic institutions, its broader value remains unknown. We sought to estimate IT's effect on key patient safety measures in a national sample. Using four years of Medicare inpatient data, we found that electronic medical records have a small, positive effect on patient safety. Although these results are encouraging, we suggest that investment in health IT should be accompanied by investment in the evidence base needed to evaluate it.

While the grant above provides an example of HCFO-funded evidence on CPOE, other studies related to health information technology include:

Getting Tools Used: Lessons Learned from Successful Decision Support Tools Unrelated to Health Care
Grantee Institution: Center for Advancing Health
Principal Investigator: Jessie Gruman, Ph.D.
Grant Period: July 1, 2008 - June 30, 2009

Administrative Costs Associated with Third Party Payment
Grantee Institution: University of California, San Francisco
Principal Investigator: Harold Luft, Ph.D. and James Kahn, Ph.D.
Grant Period: September 1, 2005 - July 31, 2007

Administrative Simplification Challenges and Opportunities: A Physician Organization's Perspective
Grantee Institution: Massachusetts General Physicians Organization
Principal Investigator: Gregg Meyer, Ph.D.
Grant Period: August 1, 2005 - July 31, 2007

Improving Access to Improve Quality: Evaluation of an Organizational Innovation
Grantee Institution: University of Washington
Principal Investigator: David Grembowski, Ph.D. and Douglas Conrad, Ph.D.
Grant Period: November 1, 2004 - November 1, 2006

The Economics of Health Information Technology in Physician Organizations
Grantee Institution: University of California, San Francisco
Principal Investigator: Robert Miller, Ph.D.
Grant Period: February 1, 1999 - October 31, 2001

Information Technologies and the Use of Information in Managed Care
Grantee Institution: University of Minnesota
Principal Investigator: Jon Christianson, Ph.D.
Grant Period: January 1, 1999 - June 30, 2001