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Practice Fusion Drops Free Software Model

Posted on February 26, 2018 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.

More than a decade ago, an upstart company grabbed the health IT world’s attention when it rolled out a free advertising-based EMR. The company, Practice Fusion, wasn’t the only venture offering free EMR access. But its brash attitude and unapologetic defense of its business model won the industry’s grudging acceptance, and its occasional bouts of hyper-aggressive sales tactics actually made its story more interesting.

Now, in the wake of its $100 million agreement to sell out to Allscripts, the end of an era has arrived. The company has announced that it’s now switching to a paid subscription model, priced at $100 per physician per month, according to CNBC.

Prior to his 2015 ouster from the company, founder and then-CEO Ryan Howard had continued to insist that Practice Fusion software would always be free. Apparently, over the long run, this didn’t work out. (No need to shed any tears for Howard, by the way. He’s comfortably ensconced in a new venture called iBeat. The company is building a cellular smartwatch that monitors heart rhythms and calls emergency responders in a crisis.)

Most observers see the $100 million sale to Allscripts as a bad deal for Practice Fusion which, as my colleague John Lynn notes, had raised more than $157 million over its lifespan.

It seems fair to say that if the free EMR model was still working, Allscripts wouldn’t have been able to pick up Practice Fusion so cheaply.Its increasingly tarnished reputation can’t have helped either. The company has always pushed the envelope with its aggressive marketing strategies, but in recent years it pretty much burst the envelope open.

Two years ago, Practice Fusion got slapped by the FTC for engaging in deceptive consumer marketing practices. Its problems began in 2012 when it began to send out email messages to patients of providers who used its EMR. According to the agency, Practice Fusion never told consumers that the doctors didn’t send the email messages, nor informed them that their responses to the emails would be made public. It’s hard to tell whether this played a role in the firm’s seeming decline, but it certainly didn’t help.

In all fairness, Howard and his team deserve a great deal of credit for breaking ground in HIT. Offering doctors an alternative to the hugely expensive, doctor-hostile EMRs available to medical practices at the time was a big accomplishment and provided a lifeline for many medical practices. Unlike many of its old-school competitors, Practice Fusion was physician-centric and affordable, and that was no small feat either. But over time, its big idea didn’t prove out. Practice Fusion has been forced to admit that there’s no (even ad-based) lunch.

Let’s see what Allscripts does with Practice Fusion’s assets and whether it invests in its latest addition to the corporate family. My guess is that Allscripts will let its latest toy languish and eventually die, but you never know. Maybe Practice Fusion will be reborn.

Practice Fusion Founder Launches Wearables Startup

Posted on May 31, 2016 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.

Free EMR vendor Practice Fusion has always been something of a newsmaker. Since its launch in 2005, the company has drawn both praise and controversy for its revenue-generation approach, which has included the analysis and sale of de-identified patient data and advertising to physicians.

But it’d be hard to question Practice Fusion’s success, particularly given that it found its legs during a hyper-competitive period of EMR vendor growth capped by the Meaningful Use incentive program. Over the company’s lifespan, it has grown to serve over 110 million patients, and reportedly supported more than 70 million patient visits over 2015. It also attracted over $150 million in venture and private equity funding. Will it provide a great return for investors, time will tell, but they’ve definitely left their mark on the EHR industry.

At the helm of Practice Fusion until last year was CEO and Founder Ryan Howard. Howard – whom I’ve interviewed now and again over the years — certainly doesn’t lack for confidence or creative thinking. So I was intrigued to learn that Howard has stuck his toe into the wearables market. Clearly, Howard has not wasted time since August 2015, when he was booted out as Practice Fusion CEO. And if he believes a wearables startup can make money in this rapidly-maturing niche, I’m inclined to give it a look.

Howard’s new startup, dubbed iBeat, is creating a watch which constantly monitors and analyzes users’ heart activity. The device, which transmits its data to a cloud platform, can alert emergency medical services and, using an onboard GPS, provide the wearer’s location when a user has a heart attack or their heart slows down below a certain level. Unlike competitor AliveCor, whose electrocardiogram device can detect heart rhythm abnormalities such as atrial fibrillation, it has no immediate plans to get FDA approval for its technology.

iBeat expects to sell the device for less than $200, though if users want the emergency alert service they’ll have to pay an as-yet unnamed extra monthly fee. That puts it smack in the middle of the pack with competitors like the Apple Watch. However, the startup’s focus on cardiac events is fairly unusual. Another unusual aspect to the launch is that Howard is targeting the 50- to 70-year-old Baby Boomer market. (Imagine a more-focused version of the LifeAlert “I’ve fallen and I can’t get up” service, which focuses on the 75-plus market, Howard told MobiHealthNews.)

My take on all of this is that there may very well be something here. As I wrote about previously, my own heart rhythm is being monitored by a set of devices created by Medtronic, a set-up which probably cost a few thousand dollars in addition to the surgical costs of implanting the monitoring device. While Medtronic’s technology is doubtless FDA approved, for not-so-serious cases such as my own a $200+ plus smart watch might be just the ticket.

On the other hand, I doubt that uncertified devices such as the iBeat watch will attract much support from providers, as they simply don’t trust the data. So consumers are really going to have to drive sales. And without a massive consumer marketing budget, it will be difficult to gain traction in a niche contested by Apple, Microsoft, Fitbit and many, many other competitors. Not to mention all the competitors in the “I’ve fallen and I can’t get up” category as well.

Regardless of whether iBeat survives, though, I think its strategy is smart. My guess is that more-specialized wearables (think, I don’t know, iSugar for diabetics?) have a bright future.