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What Does e-MDs and AdvancedMD Under the Same Private Equity Mean?

Posted on August 11, 2015 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

The healthcare IT world has seen a lot of movement and investment lately. Kareo raised $55 million recently. Modernizing Medicine acquired gMed last month. Accolade secured $22.5 million in funding. medCPU closed $8 million in financing. BoardVitals raised $1.1 million to build the Wikipedia of Medicine. Premier acquired CECity. Plus, that doesn’t even mention the $1 billion acquisition of Merge healthcare by IBM. I’m sure that there are many more that people can share in the comments.

There’s a lot of investment going into healthcare IT. No doubt there’s a huge opportunity for health IT companies. However, I’ve been most interested in what’s happening with the EHR companies involved in these deals. For example, one recent transaction that I didn’t mention above was Marlin Equity Partners acquiring AdvancedMD from ADP. The ADP acquisition of AdvancedMD never seemed to work. The idea of doctors offices being small businesses and ADP offered a bunch of small business services kind of made sense, but most doctors offices treat their EHR purchase very different than other tech investments for their office. The EHR purchase is its own beast. So, it’s not surprising that ADP would divest itself of an EHR software company.

What’s more interesting about the deal is that Marlin Equity Partners had already acquired EHR vendor e-MDs in March of 2015 and merged it with MDEverywhere. Now Marlin Equity Partners has e-MDs and AdvancedMD under their umbrella. I asked them what their plans were now that they had two EHR vendors (competitors) in their portfolio. They declined to comment until the acquisition of AdvancedMD closed.

Something has to give. I can’t imagine Marlin Equity Partners continuing with two software companies. Hard to say whether e-MDs will win or AdvancedMD, but I expect we’ll see one of them being sunset in the next year or two. They’ll offerer a way to convert from one to the other, but switching EHR software is never fun. It’s even less fun when it’s being forced upon you by the vendor.

The crazy thing is that I think we’re just getting started with this kind of activity. 300 EHR vendors is not sustainable long term. I don’t think we’ll get to 5 EHR vendors like most suggest, but we could narrow it down to 100 and still have plenty of options. That’s a lot of doctors being left high and dry when their EHR gets consolidated.

Health IT Venture Funding For EMRs At Low Ebb

Posted on January 17, 2014 I Written By

Anne Zieger is veteran healthcare consultant and analyst with 20 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. Contact her at @ziegerhealth on Twitter or visit her site at Zieger Healthcare.

For several years, most health IT venture funding has focused either on EMRs or data and network infrastructure to support EMRs.  With the EMR market arguably completely saturated, it seems the money is flowing in a different direction.

According to a new report by Mercom Capital Group covered in iHealthBeat, health IT venture capital funding hit  $2.2 billion across 571 deals in 2013, nearly double the $1.2 billion and 163 deals executed in 2012.

So where did the money go? According to Mercom, consumer-centric health IT companies raised $1.1 billion, personal health companies raised $198 million and social health companies raised $166 million last year.  The mobile healthcare sector raised almost $564 million, not surprising at all given the speed at which mobile health is accelerating.

Meanwhile, roughly $1.1 billion was raised by medical practice centric companies, including $179 million by population health companies, $162 million but practice management companies and a scant $166 million by EMR companies.

According to the report the top five venture funded companies of 2013 were Evolent Health, which raised $100 million, Practice Fusion, which raised $85 million, Fitbit, which raised $73 million, MedSynergies, which raised $65 million, and Proteus Digital Health, which raised $45 million.

So, as it turns out, Practice Fusion took the lion’s share of EMR venture funding last year, leaving the rest of the industry to scavenge for what remained in terms of VC interest.

What does it say in terms of the health of the EMR business?  Well, it’s not necessarily a sign of anything terribly negative in terms of EMR vendors’ future; after all, you’re not seeing a lot of new EMR companies jumping into the business, for good reason.

On the other hand, it does suggest that the market for EMRs has solidified, and is not perceived to have dramatic growth potential by VCs.  I suppose we shouldn’t be surprised or concerned for that matter. If EMR vendors aren’t in explosive growth mode at this point, it’s just because they’re serving the customers they’ve got. It could be worse.

SCOTUS Decision, Combating Mobile Health Threats, and a Video from RockHealth: This Week at HealthCareScene.com

Posted on July 1, 2012 I Written By

Katie Clark is originally from Colorado and currently lives in Utah with her husband and son. She writes primarily for Smart Phone Health Care, but contributes to several Health Care Scene blogs, including EMR Thoughts, EMR and EHR, and EMR and HIPAA. She enjoys learning about Health IT and mHealth, and finding ways to improve her own health along the way.

EMR and HIPAA

Medicaid Doctors and Dentists Gaming the EHR Incentive Program

In order to get the EHR incentive money, Medicaid Doctors and Dentists are only required to purchase the equipment. They can, technically, just buy it and do anything with Meaningful Use. Recently, Dentrix recently partnered with Henry Schein to get access to this money. In this post, the legality of doing this, with no intention of actually passing Meaningful Use standards, is discussed.

SCOTUS Decision and Healthcare IT

The recent decision on the “Affordable Health Act” has gotten the attention of many people across the country. Will this decision affect the IT and EHR world? This post delves into that question, as well as addresses how the SCOTUS decision will impact healthcare reimbursement.

Wired EMR Doctor

My Presentation Submission to 2012 mHealth Summit

Many doctors are hesitant to embrace mHealth. Dr. Michael Koriwchak submitted a talk to the 2012 mHealth Summit, explaining why he feels this is the case. This post gives a basic overview of his talk, which is split into three sections: 1) addressing practicing physicians concerns about mHealth, 2) addressing the culture differences between physician and HIT communities and, 3) outlining the concessions both physicians and the HIT community need to make in order to facilitate communication, promote adoption of mHealth, and improve the quality of mHealth products.

Smart Phone Health Care

Combating Mobile Health Threats: 13 Tips Everyone Should Read

There is a big concern for the security of mHealth, and rightfully so. With all the intelligence to create this technology, there’s people out there wanting to steal information from it. An article a mhimss.com created a list of 13 tips for “combating mobile health threats”. Read the tips and other commentary this week over at Smart Phone Health Care.

App Created to Connect Patients With Doctors Immediately

Consult-a-Doctor is a program designed to connect users with a doctor without ever leaving their home. This cloud-based program is available for the iPhone and requires a subscription. Patients are able to access live medical consultations, treatment, and even receive prescriptions through this program.

EHR and EMR Videos

RockHealth Startup Elements: Product Design with Dave Morin

RockHealth has created a series of videos concerning the elements of starting up a healthcare company. The video featured this week on EHR and EMR Videos features David Morin talking about Product Design. To check out other videos in the series, some of them are posted here.

EMR and EHR Thoughts

$34 Million Series C Funding for Practice Fusion

Practice Fusion brought their total funding to over $64 million, with $34 million coming from recent Series C Funding. Although Practice Fusion seems to be one of the major players in the EHR world, there are some complications that may make it difficult to live up to this $64 million financing.

The Shift from Expensive Technology to Cost Saving Technology

Posted on June 6, 2012 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

Someone recently pointed out to me the irony of healthcare’s history investing in technology. Plus, they pointed out an interesting shift in healthcare IT investment that I think’s worth pointing out and discussing further.

If you look at many of the healthcare technology investments of the past they often were in very expensive equipment. Think about the huge robots or other medical devices with enormous price tags. These machines were often miracle workers in what they could accomplish, but in order to have that miracle it usually came with a really hefty price. I’m not sure all the rationale for buying these huge expensive machines, but they would make these purchases over and over. This type of spending led healthcare technology investment to spend huge amounts of money trying to create the next technology that would get hospitals to spend large amounts of money on a huge device.

The unfortunate thing for healthcare was that while this new technology could improve the quality of care provided it cam at an enormous cost. I know that I and many others mostly throw cost out the window when we’re talking about our health. We want the best treatment possible no matter the price.

The interesting thing is that a new breed of healthcare IT investment is happening. There’s a shift to investing in software and devices that instead of increasing the cost of healthcare strive to actually lower the costs of healthcare. While certainly many would argue on whether EHR software lowers the costs of healthcare, that’s the intent. I think that long term we’ll see the cost savings of EHR software and the software that gets built on the backs of EHR software will lower costs.

I’m sure there are a lot more examples that illustrate both sides of this. Plus, there are likely some exceptions to the above analysis as well. Although, I do think this is a trend that’s important and will serve healthcare very well.

EHR Company Funding Risks – Large Company Backed EHR

Posted on June 1, 2012 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

This is the fifth and final post in my EHR Company Funding Risks series that was started in response to my original post about the The Current Health IT & EHR Bubble. In this series, we’re looking at the following EHR company categories: Seed Funded, Well Funded, Positive Cash Flow, Large EHR Company, and Large Company Backed EHR. Next up is Large Company Backed EHR.

Large Company Backed EHR
The companies in this category are quite interesting, because they can often exhibit the characteristics of EHR software in every other category of EHR company. It’s all about the story of the company. For example, I’ve come across some really large companies who have developed their own EHR and only have 1 practice using their EHR. This is very much like a seed company. There are some larger companies who have acquired essentially the EHR software of another company and now they’re trying to grow the user base similar to a well funded EHR company.

I can think of a few EHR acquisitions where the large EHR company acquired a cash flow positive EHR company and they’re continuing to grow that EHR company in a cash flow positive way. Then, of course there are a few large companies that have large EHR install bases as well. There’s also everything in between in this category, so it’s hard to generalize about this group.

With that said, since it has the backing of a large company (in healthcare or not in healthcare) the biggest risk is that they’ll shift their priorities from the EHR software and on to something else in their company. Most large companies trying to get into the EHR software business come quick out of the gate. If they do well, they’ll continue growing it like they did. If they don’t do well, they’ll often throw in the towel by cutting resources to that venture and then eventually a sale of the EHR assets to another company.

Read all the posts in the EHR Company Funding Risks series.

EHR Company Funding Risks – Large EHR Companies

Posted on May 29, 2012 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

This is the fourth post in my EHR Company Funding Risks series that was started in response to my original post about the The Current Health IT & EHR Bubble. In this series, we’re looking at the following EHR company categories: Seed Funded, Well Funded, Positive Cash Flow, Large EHR Company, and Large Company Backed EHR. Next up is Large EHR companies.

Large EHR Companies
Most of the EHR companies that fit into this category are publicly traded EHR companies (with a few notable exceptions). Each of these EHR companies has their own story, but the majority include some mix of EHR acquisition or EHR merger to get into or expand their EHR market reach. Often this means that the EHR company has more than one EHR software under their purview.

Many of the larger EHR group practices and particularly the multi specialty clinics look to the larger EHR companies because these large EHR companies have usually worked to try and cover every EHR specialty in their EHR. In most cases the EHR software has been around for a very long time. This is good because then the software is often mature, but it’s also bad because it’s often built on old technology.

The large complaint against these large EHR companies is that they’re large and impersonal. That they are out of touch with the customer. Of course, this is kind of the nature of being a large company and having a large user base. Plus, you can imagine the challenge listening across a half dozen different EHR software products.

The risks associated with these large EHR companies software usually has much less to do with cash flow and much more to do with the decisions of the EHR company executives. With multiple EHR software under their umbrella, will they choose to close the one you use down and focus on their other EHR products? Will your EHR product get lost in the corporate shuffle of priorities? Sure, they’ll still support your EHR product if there’s an issue, but have they dedicated the company resources to your EHR or to another product in the company’s portfolio?

One argument that larger EHR vendors have made is that they’re the only companies that have the resources available to create the EHR software of the future. Some argue that many of the smaller EHR companies won’t be able to meet meaningful use stage 3, because they don’t have the resources available to do that. Not to mention when we eventually have to do Watson like Smart EHR software integrations across large data sets. I think the first part about doing MU is overstated. I think the jury is still out on how smart EHR software will become over time and how smart physicians require their EHR to be.

Next up, we’ll look at Large Company Backed EHR. Read all the posts in the EHR Company Funding Risks series.

EHR Company Funding Risks – Positive Cash Flow EHR Companies

Posted on May 25, 2012 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

This is the third post in my EHR Company Funding Risks series that was started in response to my original post about the The Current Health IT & EHR Bubble. In this series, we’re looking at the following EHR company categories: Seed Funded, Well Funded, Positive Cash Flow, Large EHR Company, and Large Company Backed EHR. Next up is Cash Flow Positive EHR companies.

Positive Cash Flow EHR Companies
This type of EHR company is usually a conservatively funded EHR company (often through non traditional funding mechanisms, or through a private buy out) that have grown large enough that their current user base provides enough cash flow to cover the EHR company’s ongoing expenses. The majority of these EHR companies have been around for a long time. In most cases they started out as EHR only companies (since everyone already had a PM system) and over time were able to grow a large EHR user base.

Instead of going after a large funding round, these EHR companies stayed small and chose to grow slow and steady over time. At this point, most of these companies have a large enough user base and enough cash flow that they’re in it for the long haul. While a sale could happen, most are content to continue growing the way they’ve done for a long time.

The users of these systems are usually happy with the software. Plus, they’ve often been using it so long that the idea of switching is something they wouldn’t even entertain. Even if the EHR software has some issues, the practices know the problems and have found ways to work around them. Plus, I’ve heard from many about the kinship they have with the EHR software that they’ve had for so long.

The real question for these EHR companies is how well they’ll be able to retain their existing EHR user base and/or how well can they acquire new EHR users. At some point if they aren’t maintaining or growing their EHR user base, they won’t have the cash flow needed to continually improve the EHR system with changing technology and clinical requirements. Plus, considering the fast pace of technology, time and their legacy software creation starts to catch up with them.

Many of the best specialty specific EHR companies have been able to reach this category. Some are still in the seed funded or well funded categories, but most of the specialty specific EHR companies I’ve seen have reached the cash flow positive category or are really close to getting there. Most of them realized that they had a very specific EHR market and so they had to grow it slow, steady and focus on revenues early.

Next up, we’ll look at Large EHR Companies. Read all the posts in the EHR Company Funding Risks series.

EHR Company Funding Risks – Well Funded EHR Companies

Posted on May 22, 2012 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

This is the second post in my EHR Company Funding Risks series that was started in response to my original post about the The Current Health IT & EHR Bubble. In this series, we’re looking at the following EHR company categories: Seed Funded, Well Funded, Positive Cash Flow, Large EHR Company, and Large Company Backed EHR. Next up is Well Funded EHR companies.

Well Funded EHR Companies
These EHR companies are those that have moved past the beta phase of their EHR and have usually gotten a large second round of funding that will allow them to work on scaling their EHR user base. This is where I see the largest number of what most would consider “startup” EHR companies. They usually have a few million in the bank and somewhere between 50-200 doctors on their platform.

With the money in the bank, most of these EHR companies have a number of years of runway to be able to see their EHR company play out. They still haven’t made it to what I call the EHR promise land of 1000+ doctors on their platform, but they have enough money to try and reach that goal over the next couple years.

The risk for a practice choosing one of these well funded EHR companies is what will the EHR vendor choose to do once they reach 1000+ doctors. Will they sell the company off to someone else (which almost never ends well for the practice)? Or do these EHR vendors have the staying power and desire to go after something much larger? The other risk is that the EHR company will only ever have a few hundred doctors. When you’re a well financed EHR company that doesn’t gain traction, this will usually end up in a fire sale of the EHR to some other company who wants to acquire the users you do have.

Despite the risks mentioned above, many really love these “startup” EHR companies that have plenty of funding. They’re usually very responsive companies that are able to have a real personal touch with their users. They usually have some unique selling proposition which the practice found so intriguing in the first place.

Most of the Free EHR vendors fit in this or the previous seed funded category as well. However, the amount of funding that the Free EHR vendors require is a multiple higher because they usually need to be able to reach a certain install base before their revenue model kicks in. The other principles are very much the same. Although, most of the free EHR vendor revenue models require a large user base. The Free EHR promise land is probably closer to 10,000 and some might argue that to really make it work they need 100,000+.

Next up, we’ll look at Positive Cash Flow EHR Companies. Read all the posts in the EHR Company Funding Risks series.

EHR Company Funding Risks – Seed Funded EHR Companies

Posted on May 18, 2012 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

In my post called The Current Health IT & EHR Bubble a good conversation was started about the way EHR companies are funded and how many of them are at risk of running out of money. Obviously, this should be a concern to anyone selecting an EHR software. Once an EHR company runs out of money, it’s almost never pretty for their users. The EHR software is usually sold to a larger EHR vendor or other EHR competitor and you can imagine which EHR that vendor chooses to sunset.

Here’s a look at how I define the various funding for EHR companies and the risks associated with each EHR funding situation: Seed Funded, Well Funded, Positive Cash Flow, Large EHR Company, and Large Company Backed EHR. I’m sure some of these categories could be divided other ways too. Plus, some EHR companies fall into the middle of 2 categories. However, hopefully you can use these categories to get an idea of how the EHR software you have or are looking at getting is positioned as far as EHR funding.

Over the next couple weeks, I’ll take each category (Seed Funded, Well Funded, Positive Cash Flow, Large EHR Company, and Large Company Backed EHR) and discuss how I define each category and some of the characteristics and risks associated with each type of EHR vendor. First up is Seed Funded EHR companies.

Seed Funded EHR Companies
This is the relatively new EHR company. In most cases, these EHR companies have a very small set of basically beta EHR users. Most people see these companies as the most risky and that’s probably true. Small funding and small user base means you have less revenue and less cash in the bank. However, most of these companies also have smaller staff and burn through money much slower than large companies.

The question with seed funded companies is can they get to either the next round of funding (the more likely option) or enough users before they run out of money. This is often a hard question to answer. In the current EHR investment market, it seems most EHR companies in this stage have gone and gotten the next round of EHR funding while the funding market is good.

Some physicians love these companies. As one of their beta users, your feedback is heard and incorporated into the product. Plus, it’s exciting for many of us to see something build out over time. This is particularly true when the small EHR software company is doing something innovative and unique. The good part for the EHR market is that if a company like this runs out of money, only a few practices are affected. Plus, those practices that are affected usually knew what they were getting into when they chose the small EHR company.

If a seed funded EHR company is able to build a user base with just their seed funding combined with some good boot strapping, a number of them will be able to kick and scratch their way to profitability with a much smaller group of customers. Although, once they do that, they move from this category into the Cash Flow Positive category of EHR companies

Next up, we’ll look at Well Funded EHR Companies. Read all the posts in the EHR Company Funding Risks series.