Blue Cross and Allscripts to distribute $23 million in technology to doctors

The state's biggest insurance company said today it will pay 750-plus doctors and 39 free clinics in North Carolina to switch from paper prescriptions and forms to electronic medical records.

Blue Cross and Blue Shield of North Carolina announced the $23 million program in collaboration with with Allscripts, a Chicago company that will contribute $8 million to the effort.

The companies said that using electronic medical records will reduce errors, flag unnecessary tests and give medical professionals instant access to a patient's medical history. Thus, if a Raleigh resident has an emergency in Asheville, doctors and nurses in that city could instantaneously access the patient's vital records, instead of requesting faxes of paper records.

For Allscripts, a company with a substantial operation in Raleigh, the deal means it will get to market its expensive technology to doctors who are on the Blue Cross network.

Blue Cross officials expect the program eliminate inefficiencies, duplications and other waste that typically drive up medical costs by 20 percent. They hope it eliminates unnecessary procedures, recommendes cheaper treatment options and other such benefits.

Blue Cross officials said those savings wouldn't automatically translate to a 20 percent cut in premiums, but they would help manage spiraling health care costs.

Electronic medical records are part of the Obama Administration's goal of modernizing the nation's health care system.

But fewer than half the state's independent primary care physicians use electronic medical records. One reason is that doctors are traditional and slow to adapt to new technologies. Successfully transitioning from paper records stored in file cabinets to digital records stored in central data banks can take anywhere from six months to a year.

Another key reason is that electronic medical records technology are expensive. The Allscripts product costs about $30,000 per doctor in the first year and about $2,000 a year thereafter in support and maintenance contracts.

The Blue Cross and Allscripts program will cover 85 percent of a doctor's cost of the technology and support services for five years. It will cover 100 percent of the cost for a free clinic that serves the uninsured.

Additionally, under the federal stimulus program pays, doctors are eligible for about $44,000 in subsidies for switching to electronic medical records.