WASHINGTON (Reuters) - The future has arrived for U.S. doctors when it comes to prescribing medications.

Customers stand in line to pick-up prescriptions at a Wal-Mart in Leesburg, Florida October 6, 2006. REUTERS/Charles W Luzier

Starting next month, Medicare, the federal health insurance program for the elderly and disabled, will offer financial bonuses to doctors who prescribe drugs electronically rather than on paper. Doctors who do not will face penalties from Medicare starting in 2012.

This is intended to help persuade the vast majority of U.S. doctors who do not “e-prescribe” to start, both to improve efficiency and curb medical errors.

“The incentives starting January 1st will be just what is needed to get more and more people to do this,” said Dr. Ted Epperly, president of the American Academy of Family Physicians representing 93,000 doctors.

“However, it will not be a stampede. It’s going to be more of a slow trickle growing to a moderate flow over six months or so.”

Proponents say that when a physician zaps a prescription electronically to a pharmacist rather than scribbling it on a piece of paper, it removes the possibility a patient might get the wrong drug because of a doctor’s sloppy handwriting or a different medication with a similar name.

And research shows that doctors using an e-prescribing system are prompted about price and are more likely to pick cheaper generics over pricier name brand drugs.

The bonuses take effect just weeks before President-elect Barack Obama takes office with plans to overhaul the U.S. health care system, the world’s most expensive.

Obama’s advisers have stressed greater efficiency, including electronic medical records and e-prescribing.

CARROT AND STICKS

The e-prescribing incentive measure was passed by Congress in July over a veto by President George W. Bush. It raises Medicare payments to doctors who e-prescribe, with a 2 percent bonus in 2009 and 2010, a 1 percent bonus in 2011 and 2012 and a 0.5 percent bonus in 2013.

Doctors who do not e-prescribe get a 1 percent Medicare payment penalty in 2012, rising to 1.5 percent in 2013, and 2 percent in 2014 and thereafter.

By the end of 2008, about 12 percent of doctors will be e-prescribing, doubling the number from the beginning of the year, said Rick Ratliff, co-CEO of e-prescription network SureScripts-RxHub.

That represents a leap from about 35,000 doctors to more than 70,000 in a single year.

“When the new incentives kick in, we think there will be continued momentum,” Ratliff said in a telephone interview.

About 80 percent of the 57,000 U.S. pharmacies are taking e-prescriptions, including big chains such as CVS, Walgreen and Rite Aid, Ratliff added.

Some private insurers including WellPoint Inc are offering their own bonuses to doctors who e-prescribe. But some doctors may still fret the cost of adopting e-prescribing.

“Part of what may be holding some providers back is they don’t realize there is a free e-prescribing product available,” said Lee Shapiro, president and chief operating officer of Allscripts.

The National ePrescribing Patient Safety Initiative, a coalition of companies, offers Allscripts e-prescribing software to doctors for free.

Dr. Steven Waldren of the American Academy of Family Physicians said some doctors might not be convinced by the Medicare bonuses. Doctors were offered bonuses to take part in a Medicare physician quality reporting system, but thousands who reported the data have never received the payments, the group said.