E-prescribing adoption and use increased substantially following the start of a federal incentive program.

E-prescribing, or the electronic generation of a prescription and its routing to a pharmacy, is generally believed to improve health care quality and reduce costs. However, physicians were slow to embrace this technology until 2008, when Congress authorized e-prescribing incentives as part of the Medicare Improvements for Patients and Providers Act. Using e-prescribing data from Surescripts, we determined that as of December 2010, close to 40 percent of active e-prescribers had adopted the technology in response to the federal incentive program. The data also suggest that among providers who were already e-prescribing, the federal incentive program was associated with a 9-11 percent increase in the use of e-prescribing-equivalent to an additional 6.8-8.2 e-prescriptions per provider per month. We believe that financial incentives can drive providers' adoption and use of health information technology such as e-prescribing, and that health information networks can be a powerful tool in tracking incentives' progress.