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$34 Million Series C Funding for Practice Fusion

Posted on June 28, 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.

Artis Ventures led the Series C funding round for Practice Fusion. They raised $34 million in this round with them now having raised over $64 million total. The full list of investors joining the Series C round includes long-time investors Felicis Ventures and Band of Angels, plus Glynn Capital, Ali and Hadi Partovi, Founders Fund, Morgenthaler Ventures, Scott Banister, SV Angel, Ghost Angel, and several other institutional and individual investors.

Some other good stats from the Techcrunch article on the EHR investment:
*Currently 170 employees, and expect to reach 250 employees by year’s end
*Added 4x a many users as Allscripts last quarter (Who Ryan Howard considers their largest competitor)
*2012 Q1 Revenue was “comfortably in the seven figure range”
*Hosts 40 million patient records
*150,000 doctors signed up (This is their signed up user number, not their active user number)
*7 months ago they were at 25 million records and 130,000 signups

I also found this Techcrunch quote fascinating: “Howard was careful choosing Artis Ventures to lead the round, telling me “it’s a wedding. You’re married to that investor. Artis is a hedge fund with a venture fund. It’s preparing us. It’s who would be buyers in a public market” indicating the company has its sights on an IPO.”

It’s worth noting that the founding doctor/CMO (Chief Medical Officer), Robert Rowley, MD, also recently left Practice Fusion. He’s still actively blogging about healthcare IT on Robert Rowley, MD and he tells me it was an amicable departure. I think it’s noteworthy though since Dr. Rowley was the physician face of Practice Fusion since the start of the company.

There’s no doubt that Practice Fusion is now a major player in the EHR world. Although, I’m still interested to see if they can live up to a $64 million financing at around a half a billion dollar valuation. I wonder how quickly things like having their software built using Flash will catch up with them. Plus, Practice Fusion was designed with the small doctor office in mind. Will it be able to evolve its platform to be able to support larger group practices?

I do think they have the right culture when it comes to opening up their data to other outside developers that will be required for them to have a widely adopted healthcare platform. We’ll see how the healthcare ecosystem responds to that type of open platform. They now have plenty of money in the bank to be able to find out.

Full Disclosure: Practice Fusion is an advertiser on a couple Healthcare Scene websites.

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.

Shifting Healthcare Venture Capital Investment

Posted on April 27, 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.

Change is in the air when it comes to venture capital (VC) investment in healthcare. I wrote about this a few days ago on a post on EMR Thoughts called VC Investment in Healthcare. The final paragraph is a nice summary of my thoughts:

I think we’re seeing a shift in healthcare investment into a large number of smaller companies who can innovate as opposed to larger sums of money into medical device and biotech companies. In some ways we’re seeing the costs associated with a startup company in healthcare starting to come down the way they did in the IT side of things.

I was amazed by the timing of a post from my favorite venture capital blogger, Fred Wilson, called Can The Crowd Be More Patient?. His first paragraph provides a similar sentiment:

One of the most noticeable changes to the VC business over the past decade is the movement of investment allocation from capital and time intensive sectors like biotech and clean tech to capital efficient and fast moving sectors like internet and mobile.

Although, Fred offers an interesting twist on where sectors like biotech might get their funding in the future: crowd funding.

The idea of crowd funding is definitely beginning to take shape. Websites like Kickstarter and IndieGoGo have started the trend with no equity involved and the latest jobs act has opened up the door to allow crowd funding to happen with equity involved. For those who don’t know what crowd funding is, it could be 1000 people all “investing” $100 into a company that needs to raise $100,000. That means that 1000 people are all at very little risk, but the company gets a relatively large sum of money. Those who invest the $100 would own a very small part of the company and benefit in any upside the company experiences. It’s going to be a game changing way to fund entrepreneurship and will be an incredibly important investment trend.

The interesting thing is that we’ve seen this funding trend in healthcare for a really long time. Ok, they haven’t gotten equity for the investment, but how many of you have supported cancer research or diabetes research through a donation? That’s basically an investment in the companies that are doing that research.

VC Investment in Healthcare

Posted on April 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.

There’s a real change happening right now in the venture capital healthcare investment world. In a recent article on NPR they highlight one piece of the change that’s happening with VC investment in healthcare:

The share of venture dollars flowing to seed and early-stage investments in biotechnology and medical devices has plummeted since 2007, when investors pumped $3.6 billion into 332 deals in which a price was disclosed, according to data compiled for Kaiser Health News by FactSet Research Systems. Overall venture investing declined by nearly one-third as the economic recession set in.

Many might look at this and say that this is a bad thing for healthcare. I think this this is a good thing for healthcare. One reason why is described in the same article:

“If you come in with [a device] that’s 10 percent better and twice as expensive, it’s hard to get anyone to care,” said Bryan Roberts, a Palo Alto, Calif.-based venture capitalist at Venrock, a Silicon Valley company that invests in firms working on health services, medical devices and drugs.

I think it’s healthy that we’re no longer investing twice as much money in something that delivers only partially better care. Sure, we still need companies innovating and looking at how that 10 percent better care can have an extra 0 on the end and be 100% better care.

Plus, I think we’re seeing a shift in healthcare investment into a large number of smaller companies who can innovate as opposed to larger sums of money into medical device and biotech companies. In some ways we’re seeing the costs associated with a startup company in healthcare starting to come down the way they did in the IT side of things.

Google Health Creator Raises $6.5 Million for Healthy Lifestyle Game, Keas

Posted on December 27, 2011 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.

Techcrunch recently did an interview with Adam Bosworth who is likely best known as one of the creators of Google Health (yes, Google Health is gone now). The video interview has some interesting tidbits about Google Health and why Adam Bosworth thinks it failed. I think it’s interesting to see what else is happening in the health IT investment market. Adam Bosworth makes some interesting points about ways to add gaming to healthcare.

In this case, Keas, a Healthy Lifestyle Game company has raised another $6.5 million from Atlas Venture and Ignition Partners bringing the total investment to $16.5 million. That’s a HUGE bet on healthcare IT. Although, I guess you could classify this as a gaming investment as opposed to a mobile health investment.

The interesting thing is that the Techcrunch article highlights the corporate use case for this type of mobile platform. I wonder if the majority of the projections are more of the corporate health revenue model or more of the consumer health. Either way, I’ll be interested to know what $16.5 million of investment can do in this area. The problem is that at that funding level they can’t just build a cool app. They have to do a lot more than that to be successful and exit in a reasonable matter. This will be fun to watch.

Fred Wilson on Healthcare IT Investment

Posted on November 28, 2011 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.

One of my favorite venture capitalist bloggers (yes, I’m a nerd like that) is Fred Wilson from Union Square Ventures. He’s been posting something like every day for the past 10 years or something close to that. I’m sure I take a lot of my blogging style from him which is funny since I mostly write about EMR and healthcare IT, but I’m only at 6 years of blogging. [Excuse the digression]

Anyway, yesterday Fred wrote a post about his view of Healthcare investment. Being in the healthcare IT world where he’d want to invest I read with keen interest to hear his thoughts. The first and last paragraph of his post sums up his position on healthcare investing:

A few weeks ago, I met with a VC who has been investing in healthcare for over 30 years. He asked if we invested in healthcare and I told him that we’d like to but we don’t really know how to fit it into our investment thesis which is focused on large networks of engaged users disrupting large markets. Clearly healthcare is a large market, possibly the largest measured as a percent of GDP. But we haven’t seen many large networks of engaged users emerging in healthcare.

It is likely that we’ll be doing more looking and studying and less investing in healthcare for a while (as we did in education). But I’m hopeful that entrepreneurs, industry observers, and of course all of you, will help us develop a thesis that allows us to start investing in healthcare. Like education, it feels like a market where you can make strong returns and also help facilitate important and needed changes.

Fred does clarify in his post that there are probably a lot of great healthcare IT investment opportunities out there, but that doesn’t mean that those opportunities meet the investment thesis for their VC investment portfolio.

I left my gut reaction to Fred’s post in the comments as follows:

One challenge with your investment thesis for healthcare is that healthcare is somewhat unique in that a HUGE amount of market power (see pharma, other medical procedures) is held by such a small number of people (see doctors). So, there’s a huge market, but there’s not a huge number of users to engage. Of course, there’s still the consumer (patient) side where you could have the large engaged users. Plus, patients are slowly becoming more engaged in their healthcare.

As a side note, I’ve started kicking around the idea of hosting a Healthcare “Disrupt” for healthcare IT companies to pitch their companies. Could be a great place to continue your research.

Fred then replied:

yes, that consolidation of market power is the primary reason we have avoided healthcare to date

As I’ve thought more about the consolidation of market power, healthcare is not completely unique in this but it does make for an interesting dynamic that doesn’t exist in a lot of consumer applications which Fred Wilson usually focuses on. Although, the patients getting involved could swing that pendulum the other way enough to get Fred Wilson and similar investors to start investing in healthcare.

Also, I’m dead serious about the idea of doing a Healthcare “Disrupt” like conference. We’ll see if we can get all the right people in place to make it happen.

EHR Related Stocks Up 82% Since EHR Stimulus Package

Posted on November 22, 2011 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.

If you’re like me and work in the healthcare IT industry, you know that we’re in a really amazing environment right now. Turns out, healthcare IT related companies are enjoying the EHR stimulus money from the HITECH act as much or more than anyone else.

In an analysis by USA Today, they found that since 2009, the healthcare IT related companies stock value increased by an average of 82%. 11 of the 45 companies they analyzed they increased by a combined total of at least $20 billion since the HITECH act was passed.

They also break down how much each healthcare IT and EHR related stock increased since the HITECH act took effect:

  • 194% for Cerner;
  • 134% for Allscripts Healthcare Solutions;
  • 105% for Computer Programs and Systems;
  • 105% for McKesson;
  • 96% for Siemens;
  • 89% for UnitedHealth Group;
  • 83% for Accenture;
  • 55% for athenahealth;
  • 51% for Dell;
  • 34% for General Electric.
  • During that time, the stock value for Quality Systems dropped by 3%

Some pretty amazing numbers. Plus, it’s interesting to think that the stimulus money is just getting started. Greenway EHR users have gotten $5 million and Cerner EHR users have gotten well over $2.2 million in EHR incentive money.

I’m not stock analyst, but I’m sure these stocks will continue to grow in this frothy healthcare IT environment.

List of Healthcare IT Investments in 2011

Posted on November 15, 2011 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.

On EMR Thoughts I’m always interested in taking a look at the various market trends happening in the healthcare IT space. So, I was pretty excited when I found a great spreadsheet by RockHealth that lists the venture funded health tech companies in 2011.

The list has 41 companies with $457.81 million in funding. Not to bad for healthcare IT. Plus, I know that there missing some of the other healthcare IT investment that happened in 2011. For example, CareCloud got a $20 million investment and they’re not found on the list. Plus, this list only looks at investments over $2 million. From what I’ve seen the smaller investments in healthcare IT have been really large.

Now for a look at the 41 companies that are on the RockHealth spreadsheet. It’s great to look at the various companies in healthcare IT that are getting money. Definitely some really interesting companies on this list.

ABILITY Network – $27M – Web-based healthcare network connecting providers and Medicare
Adflow Health Networks – $2.5M – Personal health kiosk
Alliance Healthcare Networks – $11M – Performance online marketing for healthcare
AssureRX – $19M – Medical platform technologies in various therapeutic areas
Avisena – $2.5M – Revenue cycle management and practice management solutions for healthcare organizaions
Awarepoint – $27M – workflow automation and tracking solutions to the acute care hospital marketplace
Azumio – $2.5M – Smart phone heart rate monitor
BAM Labs – $2.4M – Sleep monitoring device
Basis – $9M – Basis Band – heart rate monitor and activity monitor
BL Healthcare – $5M – Remote health management solutions
Digital Assent LLC – $7.5M – Patient check-in
Doximity, Inc. – $10.8M – Professional networking for physicians
EGHC – $61M – Diverse software and service offerings for healthcare and insurance delivery
Explorys, Inc. – $11.5M – Big Data for healthcare
Forerun, Inc. – $2M – Physician documentation for Emergency Medicine
goBalto – $5M – new generation web-based solutions that simplify how clinical trials are conducted in the pharmaceutical, biotechnology and medical device industries
Health Guru – $6M – Health videos for web
Healthrageous – $2.5M – Personal connected health
HealthTap, Inc. – $2.35M – Website for patients to find health information
HealthTeacher – $5.27M – Online health curricula for K12 teachers and health educators
Humedica, Inc. – $20M – Clinical informatics for hospitals, ambulatory, and life science organizations
Jan Medical, Inc. – $3.15M – Device to detect ischemic stroke
Kareo – $10M – Cloud-based practice management and medical billing software
Kyruus, Inc. – $5.5M – Big data analytics
Lumos Labs, Inc. (Lumosity) – $32.5M – Online tool for cognitive enhancement
Massive Health, Inc. – $2.25M – Chronic disease management
Modernizing Medicine, Inc. – $7.14M – Electronic medical assistant for dermatologists
MotherKnows – $3.3M – Child online health record for parents
My Health Direct, Inc. – $4M – Doctor-facing OpenTable for appointment management
Net Orange – $5M – Healthcare supply chain management.
OPTIMIZERx – $10M – Platform for health co-pay coupons, rebates and other prescription savings offers and information
Practice Fusion, Inc. – $23M – EMR marketed to doctors and groups
Resilient Network Systems, Inc. – $5M – Cloud computing, information sharing
Rethink Autism – $2.5M – Web-based autism training, assessment, and management
Sermo – $3.5M – Social network for doctors
Sharecare, Inc. – $8.75M – Quora for health
Teledoc – $18.6M – Telephone medical consultation services
Truveris – $3.8M – Health IT for managers of prescription benefit plans and payers under these plans
Vitals.com (MDx Medical) – $12M – Online services enabling people to rate their doctor, book physician appointments and compare costs of medical procedures
Wellfount, Corp. – $6M – Medication dispensing system
ZocDoc – $50M – Open Table for doctors and dentists

100Plus Founded by Practice Fusion Founder Ryan Howard and Chris Hogg

Posted on November 4, 2011 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.

I just saw the news hit Techcrunch that a new company 100Plus raised $500k from Peter Thiel and is being founded by Chris Hogg and Ryan Howard, CEO of free EHR vendor Practice Fusion.

My first response was, wait…Ryan Howard is founder of a new startup company. What about Practice Fusion. Then, as I read about 100Plus, I realized that 100Plus is basically an extension of Practice Fusion. I see it as Practice Fusion’s research division. Sure, Practice Fusion already has a research division, but 100Plus is likely going to be the way that Practice Fusion is able to leverage their currently 24 million records.

Techcrunch describes the new company, 100Plus as such:

Essentially, 100Plus is a personalized health prediction platform that uses data analytics and game mechanics to show just how much small changes in one’s behavior can lead to a longer and fuller life.

I’ll be interested to see what they produce. I’m sure they’ll reach out beyond just the Practice Fusion data to other healthcare data repositories as well. However, the game mechanics part of it sounds interesting to me. I’ve always believed that someone is going to find a way to improve our health using some form of game mechanics. I’m not sure if 100Plus will be the company to do that (they’re still in stealth mode until next year), but someone will.

Investment in Healthcare IT

Posted on September 19, 2011 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 investment area has been really interesting lately. We have all sorts of healthcare focused incubators popping up. The Startup Weekend mega event had healthcare as one of its three focuses (I was sad I couldn’t attend this event). Lots of people are talking about healthcare as a place ripe for IT innovation.

Dan Munro latched on to some of this health IT investment in a really interesting post. Here’s a section of his post near the end:

I have no insight into the applications for either Healthbox or Blueprint, but Rock Health had over 350 applications for their first cohort of 11 companies. That ratio is farily common – although Y-Combinator’s Winter 2011 cohort was 43 companies (99 founders). The sheer number of applications to Rock Health indicates the strength of the Rock Health program (location + strong network + zero dilution). It also highlights the sheer volume – 350 teams (worth repeating) – committed to making a difference in healthcare. That. Is. Awesome! We need to foster, encourage and promote all those people and that activity – collectively – in every way that we possibly can. Maybe he should be, but the next Mark Zuckerberg isn’t toiling away inside Harvard thinking how he can move the U.S. Healthcare system into the 21st Century. Whatever “it” is at that age and location – it better involve large doses of the opposite sex, a different type of pharmaceutical and some form of loud music.

Simple math says that 20 companies (2 cohorts per year) at $20k each plus rent, payroll, legal and all the other expenses should be less than $2M per incubator per year. Our $8M “innovation” fund (from the $395M balance) could easily support 4 more incubators – in say San Diego, Austin, Seattle and Phoenix. 7 incubators running 20 companies equals 140 companies innovating in healthcare – per year.

Of course, the biggest problem with Dan’s idea is that the government doesn’t like to invest money this way. For some reason, that almost seems unacceptable for a government to invest money in these companies that have a high probability of failure. Even if we can see how this type of innovation could provide some really interesting benefits to healthcare. Plus, $8 million for 140 companies. That’s a pretty interesting number to me.

I love the incubation idea and I’m glad that it’s started to go in healthcare. I hope it’s incredibly successful. Either way, it’s going to be really fun to watch the innovations coming out of these investments. An EMR company has already come out of the most famous incubator: Y Combinator. I don’t see why other EMR and healthcare IT companies couldn’t do well also.

Note: I think one of those incubators should be in Las Vegas. Although, I’m admittedly biased towards Las Vegas Startup companies.