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A Practice Fusion IPO?

Posted on August 20, 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.

I just did a search on this blog and I found that I’ve mentioned the name Practice Fusion in 88 different posts over the years. Needless to say, Practice Fusion has been one of the most interesting EHR vendor stories out there. I’ve seen it first hand since they started advertising on EMR and HIPAA very early on in their life. I was even on stage talking about meaningful use at the first Practice Fusion user conference. We didn’t know very much about meaningful use at the time, but we put on a good show and shared what we knew at the time.

In the early days, many EHR vendors were really scared by Practice Fusion. Offering a Free EHR is a drastic thing to do and absolutely shook up the EHR industry. Much like Dell did in the PC market (and probably some others), Practice Fusion’s low price forced most other EHR vendors to lower their prices in order to compete. I saw the drop in price first hand as EHR after EHR dropped their price. At the same time as these price drops, EHR vendors were shifting from these massive front loaded EHR purchases to monthly price models that could compete with SaaS EHR pricing. The mix of pricing model changes and competition with a Free EHR was great for the industry.

With this as background, I definitely am intrigued by the news that Ryan Howard has been replaced as CEO of Practice Fusion. Tom Langam, Practice Fusion’s Chief Commercial Officer has taken the helm as interim CEO. The article I linked to above suggested that this and other personnel changes point to Practice Fusion possibly preparing for an IPO. In fact, they’ve had so many personnel changes over the years, most of the people I’ve gotten to know have left.

I’m not sure if Practice Fusion is preparing for an IPO or not, but I wouldn’t be surprised if they’re running out of money. Yes, it’s crazy to think that they could be running out of money after raising $70 million about 2 years ago along with $15 million more a few months later. CrunchBase has their funding to date at $157.5 million. However, I’m sure they have a high burn rate. Their leadership and investors have set ambitious goals for Practice Fusion to own the healthcare market (A goal which I’ve said is impossible. The EHR market will be heterogeneous!). I’m sure their spending habits match those ambitious goals. An IPO would be one way to fund that continued ambition. If they did do an IPO, we’d get some really interesting insights into their business model.

There’s some mystery surrounding how Practice Fusion makes money. I think you can summarize their income streams into three categories: advertising, data, and third party apps. Most people glob onto the first piece, but from what I understand it’s far from being their largest source of revenue. In fact, I wouldn’t be surprised if it was their smallest. The second piece is quite interesting. I once heard someone say that Practice Fusion made their money from selling health data, but then they were corrected by someone saying that Practice Fusion doesn’t sell data. Instead, Practice Fusion sells the insights from that data. A subtle difference, but an important one. The question remains, how valuable are insights from EHR data? Many other EHR vendors sell their EHR data. Is it just a matter of time until Practice Fusion does too? Will they be forced to in order to meet revenue goals?

The last piece of revenue is the one that most people ignore. However, it probably is the largest piece of the revenue pie. My guess is that their practice management system vendor partners are one of the most significant portions of their third party revenue. Practice Fusion doesn’t have their own PM and so they refer their users to an outside PM vendor. When they do so, Practice Fusion gets a cut. I’m sure this is not an insignificant number. It’s not hard to imagine Practice Fusion doing something similar with a whole marketplace of third party offerings that tie into their Free EHR.

Over the years, I’ve talked to a lot of investors and potential investors about Practice Fusion. I’ve always told them that Practice Fusion has definitely created value. They’ve done a good job leveraging the Free EHR to bring doctors in. What’s not as clear to me is whether they’ve created enough value to justify the $157.5 million they’ve raised. If they really are preparing for an IPO, then I guess we’ll find out soon. The revenue numbers that come out during the IPO process and how the street reacts to those numbers would be fun to watch. Yes, I know. I am an #HITNerd.

Some Inside Baseball for the EHR World

Posted on February 22, 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.

I thought I’d take this moment to take a quick look at what many might consider inside baseball when it comes to the EHR world. Although, I’ve been intrigued by a couple announcements that were made recently.

The first announcement is Kareo buying the Epocrates EHR which came just in time for HIMSS. You might remember that I covered the Epocrates EHR on a number of occasions. I first saw the Epocrates EHR at HIMSS in 2010, and subsequently wrote about Epocrates “killing” their EHR immediately after launch. When that happened, I think we all wondered what would happen with the Epocrates EHR code base. You don’t just throw a meaningful use certified EHR to the curb do you?

We now know the answer to that question is no. Kareo saw fit to acquire the Epocrates EHR software and Dr. Tom Giannulli, formerly of Epocrates, is now the Kareo CMIO. I can imagine that Dr. Giannulli wanted to stay with his baby (the Epocrates EHR). I’m also quite intrigued that Kareo is offering the EHR for free (at least for now?). The funny thing is that I had written that the Epocrates EHR should be free. I guess I was sort of right, but I definitely didn’t think that the Epocrates EHR would become free since Kareo makes their money from the Practice Management and billing side of the house. We’ll see how that strategy works for Kareo. In some ways it’s taking a page out of the AthenaHealth playbook.

What might be simply an odd coincidence of timing (or not), Practice Fusion just sent out a letter (shown below) to its users from Practice Fusion Founder and CEO, Ryan Howard. In it he acknowledges Practice Fusion’s past challenges with billing, and he outlines their strategy on making the Practice Fusion billing situation better.

Does this relate to Kareo? Maybe, maybe not. What I do know is that many Practice Fusion users are on Kareo as well since it was Practice Fusion’s only major Practice Management software partner when Practice Fusion started. It seemed like a great match since Practice Fusion only had EHR, and Kareo only had Practice Management. Kareo now has an EHR, and Practice Fusion is working on billing and practice management. I guess we should have seen this coming.

Here’s the full email I got from Practice Fusion (Full Disclosure: They said Dr. Lynn, but I’m not a doctor.):

Hi Dr. Lynn,

The Practice Fusion team takes pride and appreciates your role in making us the fastest growing EHR community in the US.

We also recognize that billing has not been our strongest suit. Improved superbills and an updated payer list have been highly requested by our user community.

That’s why, by the end of March, we’re going to deliver you major new enhancements to your billing experience:

• A comprehensive, streamlined superbill, directly integrated with your workflow
• Flexible reports for billing users
• The ability to export billing data to most major billing systems
• New billing software and service partners with more economical pricing

This means you can stick with the exact billing workflow and system you use today in your practice. We’re building the ability to integrate directly by allowing you to export data to your billing system via HL7. If you prefer superbills, you’ll soon have a drastically improved superbill to work with. And if you’re looking for a new billing system altogether, we’ll also have new, low-cost partners coming soon.

We’re excited to be making your EHR faster, more flexible and easier-to-use. Lastly, our commitment to you has not changed since the day you signed on—Practice Fusion will deliver all this for free. Stay tuned for our billing revamp at the end of March!

Best,
Ryan Howard
Founder and CEO
Practice Fusion
ceo@practicefusion.com

Dell Partners with Practice Fusion Free EMR

Posted on June 3, 2010 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 have quite a bit of history writing about the various Dell EMR offerings and also the Practice Fusion Free EMR. So, you can imagine my interest when I saw the announcement that Practice Fusion and Dell were partnering to offer a free EMR on Dell hardware.

Of course, this is kind of a no brainer for Dell. At least if they like the Practice Fusion EMR product. Dell is all about getting distribution for it’s hardware. Why not bundle that hardware with a Free EMR? As long as it doesn’t hurt Dell’s existing EMR partnerships with: Allscripts, NextGen and eCW then it seems good for Dell. Dell obviously has a big interest in healthcare IT with all these EMR partnerships along with their purchase of Perot Systems.

I did have a few questions about the Practice Fusion side which I posed to Ryan Howard, Chairman and CEO of Practice Fusion. The following are my questions and his answers:

Will Dell be marketing the Practice Fusion EMR as well, or is this mostly just a Practice Fusion tie in with Dell hardware?
Ryan: The strength of our partnership with Dell is that it is a true joint program. Both Dell and Practice Fusion are promoting the affordable EMR bundles for physicians. Dell through their 866-Dell-EMR hotline and on their Dell Healthcare website. Practice Fusion through www.practicefusion.com/dell. Both companies are dedicating marketing resources to reaching the small medical practice sector with this offer.

Why would a doctor buy the Dell products through Practice Fusion instead of just on their own? Do you offer a better discount?
Ryan: Doctors get a significant discount through Dell/Practice Fusion over the general Dell retail prices. It varies per piece of hardware, but is as much as 40% off. We directly negotiated these deals for our user community and Dell’s team tested each piece of hardware to make sure it would work well with Practice Fusion. You can see all the discounts here.

Isn’t it a little ironic that the “Free EMR” now has a link to “Apply for financing”?
Ryan: No. Although Practice Fusion’s EMR is free, doctors still often need to purchase new computers, scanners, printers, etc. Even with the Dell discounts, it can add up quickly for a small medical practice – the Dell financing deal relieves that last bit of financial pressure from the practice and gives them some flexibility on repayment.

Full Disclosure: Practice Fusion is an advertiser on this site. Although, they didn’t pay me to write this blog post or filter the questions I asked Ryan in anyway. I just love to post anytime I see Dell and EMR in the same sentence.

EMR Vendor Practice Fusion’s CEO Interview

Posted on October 5, 2009 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.

Many of you probably realize how much fun I have ragging on the SaaS (hosted) EMR model. I admit that I love playing devil’s advocate. I think that’s what makes me great when working with an EMR, but I digress. What people don’t realize is that I really love the SaaS EMR model and I think it’s just as viable an option as a client server EMR. I just haven’t drank the Kool-aid for either side yet.

With that background, I was excited for the chance to do an interview with one of the biggest fans of the SaaS EMR model, Practice Fusion. In fact, they’ve even taken it one step further in providing a free, ad-based EMR. The following is an email interview I did with Practice Fusion CEO, Ryan Howard.

Give us a summary of Practice Fusion for those who aren’t familiar with the company.

Practice Fusion provides a free, web-based EHR for physicians. We’re the fastest growing electronic health record community in the country, just passing the 20,000 user mark in September.  Our system includes charting, scheduling, integrations with lab networks and billing providers, eRx (in October) and unlimited support – all at no cost.

What guarantee do you provide to users that are concerned about their data being stored offsite?

Our guarantee to our physicians is that Practice Fusion provides a level of service that is dramatically higher than they could ever do on their own. From a practice’s perspective, they have access to world-class infrastructure that only a Fortune 500 company could afford. This includes data redundancy, automated back-ups, biometric security, Cisco firewalls and bank-level encryption. For a physician to build this independently would cost millions of dollars.

What about those who might be concerned that Practice Fusion might not be around forever (always a possibility) or will be acquired by another EMR vendor and they’ll be unable to get access to their EMR data to move if they wish?

A practitioner always retains ownership of their data. They can choose to export their data from our system at any time – just as we offer free uploads of data into the EMR, our team will also assist with free exports as requested. This would be true in the highly-unanticipated event of a merger or closure of our system as well.

Do you provide any mechanisms for doctors to take their data from your system and move to another EMR?

Practices using our EHR always retain ownership of their data and can export any time if needed. Just as we offer free imports of data into our system, our support team can also assist with extracting records to be transferred to a different EMR.

What do you tell doctors who are concerned about how they’ll continue seeing patients if their internet goes down?

There’s risk with both paper and electronic methods. Think about what a doctor does in his office with paper records: what happens if the offices burns down or records are stolen?

Internet connectivity is generally a concern for all internet-based models. Practice Fusion has a number of ways to circumvent this issue. While a doctor is using our EHR, data entered about the patient is constantly being saved. If the computer crashes or the internet fails, the visit is automatically saved. The physician can log back in, pick up where the session was lost and continue directly with patient.

Specific to the operations of a practice facing long-term downtime issues with their broadband company:  Practice Fusion has partnerships with various hardware providers who offer network redundancy utilities for physicians. For example, these systems can seamlessly transition to a cellular network if there is a broadband issue in the office.

How will Practice Fusion be approaching EHR certification and the billions of dollars in EHR stimulus money?

Practice Fusion is pushing toward HHS certification aggressively. Our physician team – Dr. Laffel and Dr. Rowley – has been working closely with the HIT committee and other thought-leaders throughout the past year to ensure that the final criterion for “meaningful use” reflects what is best for physicians and patients. The criteria for EHR certification are still in development but we’re certain that Practice Fusion’s system will meet the requirements. And, if something emerges that we weren’t expecting in that process, Practice Fusion’s SaaS-based platform allows us a degree of flexibility that other systems can’t match. We’re very comfortable with the certification road ahead.

What effect do you think the EHR stimulus money will have on adoption of EHR software?

It’s the silver bullet. The EHR stimulus incentives are helping to push widespread EHR adoption in a sector that has traditional been hesitant to make the switch away from paper. And, honestly, physicians were hesitant for good reason considering the expensive, bulky, IT-intensive solutions that dominated the market in the past.

Now, things are changing quickly and the market is in a frenzy. Vendor bottlenecks are already becoming an issue with the surge in demand. Traditional EHR systems with 12+ week integration schedules can’t keep up with requests. I see Practice Fusion’s five minute online set-up process, Live in Five, as a big advantage in the market as this tidal wave approaches.

Which standards are Practice Fusion adopting to provide for portability of data between Practice Fusion and other EHR vendors?

Practice Fusion’s open platform accommodates HL7, CCR and XML portability. And as one of the only true SaaS based EHR’s, we can quickly adapt our system as new portability standards emerge.

Practice Fusion will also be launching an innovative new feature called Chart Share at Health 2.0 this fall. This system allows physicians to securely share crucial patient data with other providers at no cost with no integration. It’s a major step toward collaborative care and will allow doctors who don’t have interconnected EHR technology or haven’t made the switch to an EHR to still receive and use digital records in their practice.

Describe 3 specific features which make Practice Fusion special (not including your pricing plan).

  • Practice Fusion is the only EHR with a true SaaS-based model. Other vendors – such as eClinicalWorks and Allscripts – claim to be SaaS but in fact use old-school ASP technology.
  • Our ‘Live in Five’ set-up process is unique in the market.  Physicians who are interested in Practice Fusion’s EHR can sign up online and start charting in five minutes. An entire practice can be set up in a single afternoon.  No risks, no consultants, no downtime – fast and simple integration is key.
  • I am also proud of Practice Fusion’s advances in connectivity. Physician using our free EHR can access integrated Surescripts along with real-time Quest Diagnostics and BioReference labs within the system. And we’re constantly working on adding new integrations to this list based on our community requests. With Practice Fusion, doctors are set-up with these sophisticated integrations with no cost and no development time.

What technologies and devices do you think will be the future of EMR software?

I fundamentally believe that the only way to solve the problem of national adoption of EMRs is to accommodate physicians through a web or cloud-based platform. Once this is implemented, the benefit will be unprecedented. Central reporting and trending of patients’ chronic conditions will enable providers and caretakers to identify emerging trends and truly perform evidence-based medicine.

What is needed is a unified platform to be a conduit between patients and their doctors. There are a lot of devices – such as Continua and smart phone applications – that monitor patients’ chronic conditions. The challenge is to integrate this data in EMR’s in a meaningful way to improve the quality of care.