Cost-Effectiveness of a Computerized Provider Order Entry System in Improving Medication Safety Ambulatory Care

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This is a review of the 2014 paper by Forrester, et al. [1]


  • Background—Computerized provider order entry(CPOE) is the process of entering physician orders directly into an electronic health record. Although CPOE has been shown to improve medication safety and reduce health care costs, these improvements have been demonstrated largely in the inpatient setting; the cost-effectiveness in the ambulatory setting remains uncertain.
  • Objective—The objective was to estimate the cost-effectiveness of CPOE in reducing medication errors and adverse drug events (ADEs) in the ambulatory setting.
  • Methods—We created a decision-analytic model to estimate the cost-effectiveness of CPOE in a midsized (400 providers) multidisciplinary medical group over a 5-year time horizon— 2010 to 2014— the time frame during which health systems are implementing CPOE to meet Meaningful Use criteria. We adopted the medical group’s perspective and utilized their costs, changes in efficiency, and actual number of medication errors and ADEs. One-way and probabilistic sensitivity analyses were conducted. Scenario analyses were explored.
  • Results—In the base case, CPOE dominated paper prescribing, that is, CPOE cost $18 million less than paper prescribing, and was associated with 1.5 million and 14,500 fewer medication errors and ADEs, respectively, over 5 years. In the scenario that reflected a practice group of five providers, CPOE cost $265,000 less than paper prescribing, was associated with 3875 and 39 fewer medication errors and ADEs, respectively, over 5 years, and was dominant in 80% of the simulations.


The authors seek to estimate the cost-effectiveness of CPOE implementation in an ambulatory setting by constructing an analytic model.


A cost-effectiveness model was constructed by projecting the expected cost savings from decreased ADE's and medication errors, over an expected 5-year run cycle. Total group analysis was based on the entire group of 400 prescribers, small-group analysis was also performed.


The "base model" projected $18 million in savings with CPOE, and would be associated with 1.5 million fewer errors and 14,500 fewer ADEs. In a small, 5-provider model, the projection was that CPOE would save $265,000 and result in 3,875 fewer medication errors and 39 fewer ADEs over a 5-year span.


The projections indicate that deployment of CPOE in the mid-size, ambulatory setting is likely to be cost-effective. Ambulatory providers, even in small groups, should expect to see a reasonable benefit over 5 years.


It's an interesting approach, and a reasonable way to approach cost-effectiveness in the ambulatory setting, which has not been studied as well as the inpatient setting. Whether this "makes the case" for a small ambulatory provider would be difficult to guess, but it seems like a well-thought-out analysis that would boost confidence heading into a CPOE deployment.

Related Articles


  1. Forrester, S. H., Hepp, Z., Roth, J. A., Wirtz, H. S., & Devine, E. B. (2014). Cost-effectiveness of a computerized provider order entry system in improving medication safety ambulatory care. Value in Health: The Journal of the International Society for Pharmacoeconomics and Outcomes Research, 17(4), 340–349.