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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.

Practice Fusion Cuts 25% of Staff

Posted on February 4, 2016 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.

Following on our post a few weeks ago about the potential Practice Fusion IPO, news just came out that EHR vendor, Practice Fusion, has now cut its staff by 25%. The Techcrunch report says that the cuts were across the board and affected roughly 74 people. Many are suggesting that the two reports are related since cutting staff is a great way to improve your profit numbers before an anticipated IPO.

While I think the IPO could be in mind, I think there are likely some other trends at play too. While Techcrunch notes that it’s a down market for many IT companies, I think it’s fair to say that many EHR vendors have felt the pinch of late. I wrote a year or so ago that the golden era of government incentivized EHR sales was over and we’re entering a much different market. So, it shouldn’t be a surprise that an EHR vendor might go through some cuts as the false market created by meaningful use disappears. I won’t be surprised to see more layoffs from other EHR vendors. Especially ambulatory EHR vendors like Practice Fusion.

No doubt another factor at play is that Tom Langan replaced Ryan Howard as CEO back in August. It’s very common for a new CEO to go through a round of layoffs after taking over a business. Doing so is hard for the previous CEO who’s so connected to the staff. Not that layoffs are ever easy, but it’s much easier for a new CEO to layoff people in order to make the organization more efficient. That’s particularly true when the previous CEO was the original CEO and Founder of the company.

The cynical observer could also argue that Practice Fusion needed to do these layoffs in order to slow their burn rate since they aren’t in a position to raise more capital. You’d think the $150 million they already raised would give them plenty of run way. However, you’d be surprised how quickly that disappears with that many staff on payroll (Not to mention rents in San Francisco). I personally don’t think this is a case of Practice Fusion cutting staff because they can’t go and raise money. However, it could be Practice Fusion cutting its burn rate so that they have some flexibility on when they go public without having to raise more money.

All of this said, 74 people lost their jobs at an EHR vendor. That’s never fun for anyone involved. At least they’ll likely have plenty of job opportunities in silicon valley. Unless that bubble pops like some are suggesting. It will be interesting to see how many now former Practice Fusion employees search for another job in health care IT.

Thoughts on Practice Fusion Raising $70 Million

Posted on September 24, 2013 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.

Today, Practice Fusion announced that they have just closed a $70 million round of funding. This series D round of funding brings Practice Fusion’s total funding to $134 million and a valuation estimated at $700 million. The round was led by Kleiner Perkins Caufield & Byers, OrbiMed Advisors, and Deerfield Management Company.

We’d heard that this round was close almost 2 months ago. I’m not sure what took them so long to finally close the round. I also found it interesting in this Forbes article about the funding round that “Practice Fusion leads vendors this year in acquiring Allscripts’ former customers.” I have a feeling Aprima might have something to say about that.

In that same article, Practice Fusion declined to disclose revenues, but Ryan Howard suggested that he expects Practice Fusion revenues to triple next year. Then, it was suggested in the article that payments from labs connected to Practice Fusion customers would make up a significant source of revenue. You might remember that Practice Fusion lost one revenue stream when Kareo decided to launch their own free EHR. Practice Fusion has since rolled out 3 new billing companies and so they could have made up that revenue.

The article also suggests that revenue is available from Pharma for mining the Practice Fusion data for insights. Then, they’ve always talked about the potential for pharma advertising in the Free EHR. I also had someone suggest to me recently that Practice Fusion could be making money off of selling leads to the various healthcare education companies out there. Considering the number of emails I get from these healthcare education companies, they definitely have money to spend on targeted leads.

The question I’ve asked for many years isn’t whether Practice Fusion has created value. No doubt their current user base and data set has value. The question that remains is whether they’ve created a company that merits a $700 million valuation and whether the $134 million investment will yield a quality return. Plus, can Practice Fusion build the company’s revenue while still maintaining physicians’ trust in Practice Fusion. They now have $70 million in funding to find out.

$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.

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.

An Underdog Among EMR Companies

Posted on June 22, 2011 I Written By

Dr. West is an endocrinologist in private practice in Washington, DC. He completed fellowship training in Endocrinology and Metabolism at the Johns Hopkins University School of Medicine. Dr. West opened The Washington Endocrine Clinic, PLLC in 2009. He can be contacted at doctorwestindc@gmail.com.

Short post today.  I just love a feel-good underdog story, don’t you?  In the not-so-distant past, Ryan Howard, CEO of my — so proudly said — electronic medical record company Practice Fusion literally gave it all to pursue his entrepreneurial dreams.  Details of his amazing story and why he should be sincerely congratulated can be found in an interview (“Why Peter Thiel Likes Electronic Health Record Provider Practice Fusion”) by Forbes.com’s Zina Moukheiber.  The nice part is that they’re still working on the happy ending.

Dr. West is an endocrinologist in private practice in Washington, DC.  He completed fellowship training in Endocrinology and Metabolism at the Johns Hopkins University School of Medicine. Dr. West opened The Washington Endocrine Clinic, PLLC, as a solo practice in 2009.  He can be reached at doctorwestindc@gmail.com.