Senior Fellow  Newt Gingrich

Today, technological innovation flourishes everywhere but health care. Even in the midst of a heated presidential campaign, Sens. John McCain and Barack Obama are in full agreement that we must modernize our system with information technology. Take paper-based prescriptions, which kill too many and cost too much.

We know from experience that electronic prescribing (e-prescribing) improves patient safety by avoiding drug allergies and preventing medication errors while saving money by increasing the use of generic drugs and avoiding duplicative prescriptions.

The Massachusetts eRx Collaborative has been at the cutting edge of these efforts. The three major health plans collaborated to deploy e-prescribing tools to thousands of physicians, covering hardware, software, set-up training and ongoing support at no cost to the prescribers. Why? Because it saves lives and saves money.

Last year, approximately 104,000 prescriptions were changed or canceled because of drug-safety alerts. In 2006, Blue Cross Blue Shield of Massachusetts members saved $800,000 in co-payments after e-prescribing pointed doctors toward generic alternatives. Doctors like the technology, too: More than 81 percent would recommend the technology to a colleague.

It is this kind of success that led the Institute of Medicine to recommend that every prescription in the United States be written electronically by 2010. Lawmakers and industry leaders did not move fast enough to meet this deadline, but the new Medicare law is an important step.

Based on the bipartisan Medicare Electronic Medication and Safety Protection (E-Meds) Act, introduced by Sens. John Kerry and John Ensign, Medicare will now pay higher Medicare reimbursements to those doctors who use e-prescribing to improve care. The act also includes a financial penalty for those physicians who still refuse to e-prescribe. The Congressional Budget Office estimates that this market-driven, carrot-and-stick approach will save Medicare $2.5 billion.

By helping pay for the technology, the legislation addresses one of the biggest obstacles to physician adoption: costs. A recent survey of physicians found that while more than 80 percent of doctors know the value of e-prescribing, only 7 percent actually use the technology, and 63 percent said implementing it is not a priority.

The main reason? They bear the costs. So with the right balance of financial incentives, physicians can and will adopt this life- and money-saving technology.

We expect this law to start a wave of adoption, leading to the use of more sophisticated technology.

Health and Human Services Secretary Mike Leavitt recently launched a demonstration project that will pay 1,200 small- to medium-sized physician practices up to $290,000 each to use electronic health records to improve patient care. Health technology leaders Allscripts and Misys recently announced a merger, bringing badly needed consolidation to the IT sector. Tech giants Microsoft and Google created front-page news when they introduced online portals to engage consumers on their health.

While the recent progress on e-prescribing is important, it will not be enough unless and until we implement broader, more comprehensive payment reforms that push health care providers to use health information technology.

With the right solutions and by looking forward instead of left or right, we can finally bring medical care into the 21st century. And that's something that even Democrats and Republicans can agree on.

Newt Gingrich is a senior fellow at AEI. John Kerry is a U.S. senator from Massachusetts.