Founded in 2005, Practice Fusion is an electronic health record (EHR) application for healthcare providers. Over 40,000 physicians and practice managers in 50 states currently use Practice Fusion’s Electronic Health Record.
Practice Fusion employs the “freeconomics” business model via its free, Web-based electronic health information system (some optional modules, such as electronic claim billing and submission are fee-based). Practice Fusion is a user-friendly electronic health record (EHR) system that can be activated in less than five minutes. It includes scheduling, medical history, charting, billing (including electronic claims submission), laboratory interfaces, and e-prescribing (Practice Fusion’s e-prescribing technology allows doctors to submit electronic prescriptions to more than 50,000 pharmacies in the United States at no cost). Amazingly, e-mail and telephone support are also offered without charge.
It is this essentially free business model that made it interesting for us as a case study.
Practice Fusion derives revenue from sources similar to Google: it embeds advertisements in a banner at the bottom of its electronic medical record system and it sells de-identified patient and doctor data from its system to third parties, maintaining full HIPAA compliance along the way. Practice Fusion also gives physicians the option to operate an ad-free electronic medical record system for $100 per month, which is still substantially less than the competition charges. However, as expected, most physicians choose to run the advertisement-based model, according to Matthew Douglass, Practice Fusion’s VicePresident of Engineering, who was kind enough to walk me through a “behind the scenes tour.”
Despite the revenue from advertising and the sale of de-identified data, for the business to work, costs must be kept low. Matthew says that he accomplishes this three ways: widely accepted internet standards, cloud computing, and a secure database management system.
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