Is Practice Fusion’s “Free” EHR for Real?

As I was writing three recent blogs, I kept pondering these questions: Is Practice Fusion, Inc, a San Francisco-based company offering a “free” EHR to physicians an example of “disruptive innovation”? After all, its EHR appears to be simpler, more convenient, more affordable, and intuitively easier to use than other EHRs– the criteria usually applied to disruptive innovations. Does it signal a “breakthrough” towards a decentralized technology deployable at the site of care? How can Practice Fusion offer its EHR for “free”? What triggered this “breakthrough”?

When all is said and done, I believe this “breakthrough,” if it is that, is not attributable to new EHR software or hardware, but to a new revenue model. Or you might say, it is a “fusion” of all three of these elements.

Here is how Ryan Howard, CEO of Practice Fusion, explains this model,

‘Our revenue model works in a few different ways. We monetize transactions from our partners. We do some lead generation. So if the doctors are looking for a billing service, for example, we have a billing service that they can use. We do some advertising to the physicians: different health care services, insurance companies, device manufactures and pharmaceuticals as well.”

If you think about it, Practice Fusion has adopted and modified the revenue model that has made Google so successful, namely gathering revenues from online advertising and lead generation tied to “free” access by users. It does not require physicians to install new hardware and software, but to off-load what they need in an EHR to the Internet using their existing office computers.

The beauty of it is, of course, is that you can use your own computer and somebody else – people and businesses who want access to physicians to sell them products – pays the freight for the EHR.

In other words, someone else, not physicians, is paying the bill. According to Howard,

“The product is provided to physicians fully subsidized. It’s not a “take now, pay later” or get half of the product now and then pays for the rest of it. Every feature that’s included with the product in any capacity is offered at no cost, so it’s truly free. It’s offered with support, training, and hosting. It’s the only totally free model on the market.”

Back to my recent posts for context.

• On May 22, in “Will Innovation Save America’s Health Care?” I wondered out load whether innovations from largely web-based technologies and systems would save us from Europe’s fate- the crushing cost and ensuing debt of unsustainable social welfare programs.

• On May 21, in “EHR ‘Inevitability’ and the Physician ‘Waiting Game,’“ I questioned whether EHR systems were ready for prime time, and I implied physicians were right in waiting for useful, affordable, and intuitively and clinical compatible systems.

• On May 20, in “EHRs – Size of Physician Market, Numbers Sold, By Whom, Comprehensiveness of Systems,” I reprinted an article by Chris Thorman of Software Advice, on the scope, players, and nature of the EHR market.

In the May 20 blog, I shared a chart showing EHR vendors and number of physician users.

Vendor Physician Users Practices Served

Epic 45,000
AllScripts 40,000
eClinicalWorks 40,000
GE Centricity 35,000
NextGen 35,000
SOAPWare 30,000
Practice Fusion 18,500
Eclipsys 11,000
Sage Health 10,000 .
Greenway Medical 6,000

On May 21, I received the following email from Emily Peters, Director of Communications for Practice Fusion,

“Hi Dr. Reece,

“I’ve been closely following your blog coverage this week about market share, innovation and Practice Fusion.”

“We do see some element of the “waiting game” that you described with physicians, but much less than even just six months ago. Practice Fusion now serves about 40,000 users and 2 million patients across the country – making us, not only the fastest growing EMR community, but also one of the largest. “

Before that on May 13, I had read a podcast interview with Ryan Howard, CEO of Practice Fusion, in which he said, “We just broke 15,000 users.”

I have no reason to question or challenge these physician user figures, which bespeak of explosive growth. But I can ask: how could one EHR company grow so fast?

Maybe it’s simply a matter of timing, namely, the physician market is primed and ready to get into the EHR game. Maybe it’s the marketing magic of the word “free.” Maybe it’s because Practice Fusion has the only “free” EHR on the market. Maybe it’s word getting around among physician users that this EHR really works. Maybe it’s because the Practice Fusion model profits physician users because it qualifies them as “meaningful users” and therefore qualifies them for federal reimbursement. Maybe it’s because most physicians now have broad band Internet access in their offices and can put this EHR to work in a short time frame without elaborate training and installation preparation.

Or maybe Practice Fusion is not what it’s cracked up to be and is too good to be true. There are no perfect systems in the EHR world, all are evolving, and there is always room for skepticism, or as one pessimistic wag with a weakness for puns observed, there is always gloom for improvement.

Perhaps readers of this blog will give me insight into what they think of Practice Fusion? Is it for real, or does it have blemishes that I do not see? Please feel free to comment one way or another.