HIMSS10 – Practice Fusion

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At HIMSS10, Dr. Eric Fishman had the opportunity to speak with Ryan Howard, CEO of Practice Fusion. As an EHR product and service completely free to physicians, they review Practice Fusion’s unique place in the EHR market. Mr. Howard discusses how Practice Fusion evolved out of the need to assist small, cash constrained physician practices in adopting EHR systems. With the Practice Fusion business revenue model, the company is able to provide licensing, training, secure hosting, backup, and support completely free to physicians. Lastly, Mr. Howards talks about Practice Fusion’s upcoming product launches, such as Chart Share. Chart Share utilizes Practice Fusion’s complex back-end system to share real time data between physicians, which will be a key interoperability feature.


Category: HIMSS10, Tradeshows
Date: March 12, 2010
Views:12,989 views
Information:

Dr. Eric Fishman: This is Dr. Eric Fishman for EHRtv and we have the pleasure today of speaking with Ryan Howard, CEO of Practice Fusion. Ryan, I thank you for taking the time today. I really appreciate it.

Ryan Howard: Thank you very much.

Dr. Eric Fishman: As you know, but maybe come of our viewers don't know, Practice Fusion is the only meaningful, if I can use that word, free EHR. Ryan, let's start with how you got the idea then we'll talk a little bit about the product itself.

Ryan Howard: I'd worked with Brown and Toland, one of the largest physician groups in California and when I worked with them, I learned a lot about how small doctors in the marketplace are capitalized, the makeup of their practice, their IT aptitude --

Dr. Eric Fishman: Or lack thereof.

Ryan Howard: Exactly. I understood that they were cash constrained, they had no IT resources, we saw that a lot of nurses were running the IT in the offices. Then I realized that beyond just serving them an application over the web their needs were much more complex than most users. So there's really two pieces of magic to the product. One is the cost. We found that the doctors were just totally cash constrained. I actually used to give the product away and charge for support and we still even had to manage that. It became difficult so we ended up going to a totally free model. We found other ways to subsidize it. Then beyond that, we also wanted to eliminate the complexity from the doctor as well. To keep going on that point, there's a tremendous amount of complexity in the back end for a physician to do his job effectively - - to order and receive labs, to order prescriptions and receive refills, to share a patient record and that's a great example. Where does that record live, who owns it, how is it synchronized between doctors?

Dr. Eric Fishman: Cloud computing is a phrase I've heard all day long today, yesterday, the day before. It is where we are now.

Ryan Howard: Absolutely. It inherently solves many of these issues and granted, we kind of had to start from scratch and create this - well, no one has ever done it in the past - but I think that why we have the volume and velocity that we do today.

Dr. Eric Fishman: Jumping ahead and we'll come back, I understand there have been over 30,000 physicians enrolled to use the software so far.

Ryan Howard: Yes, we just reached the 30,000 mark. We're ramping on with 1,000 users a week now (inaudible) tremendous. We're outpacing all of our major public competitors.

Dr. Eric Fishman: That's an unheard of number. Tell me the revenue models. It's a free doesn't last forever unless you have unlimited funds and you're doing it as a philanthropic effort which I think may not be the case.

Ryan Howard: Absolutely. On the back end we have ways that we monetize but it's not through the physician ever. Just to be clear, the free model includes licensing, training, hosting and support so the entire gambit. There's never any charge to the doctor. It's not freemium where they take the product and after they add a 10th user they get charged or to use a certain part of the product they get charged. It is totally free.

Dr. Eric Fishman: Just let me interrupt. I do a number of services for physicians and as you probably know, I'm an orthopedic surgeon. I feel abused by the insurance company by all parties and I've had a lot of pressure encouraging me to charge physicians for many of the services that we do for physicians and I just said no, I won't do it. So I commend you on that.

Ryan Howard: Yes, absolutely. The model is two-fold. There's some advertising on the product, it's small, it's discreet, there's no pop-ups.

Dr. Eric Fishman: Is it Google specifically or?

Ryan Howard: It's not Google, no.

Dr. Eric Fishman: Had it ever been Google?

Ryan Howard: Yes, it had been Google at one point. It's mainly just other service offerings, maybe billing services or things like that. There's people who want to reach doctors and beyond that, we also work with a data (inaudible). We're not selling that today but we probably will at some point. If we ever do, it'll be fully HIPAA compliant, de-identified anonymous so again, the integrity and the security of the model is really one of our top priorities.

Dr. Eric Fishman: So talk about the data security and issues of that nature and the features.

Ryan Howard: On the technology side, again, we're based in the clouds so when you look at another EMR, even if you install that yourself, you're going to have, as a physician, different levels of security that you need to comply and you're going to have to manage the protocols. What we have in place is data encrypted at rest, data encrypted in transit. We have Cisco firewalls, there's redundancy, mirrored backups, we're co-located. All these things add up to a level of service of a Fortune 500 company. For a doctor to do this with another EMR they could purchase the EMR and pay that upfront licensing. That would be significant but beyond that, they would also have to run all that (inaudible) office.

Dr. Eric Fishman: Substantial.

Ryan Howard: Exactly, exactly. I don't even believe they could do it and stay in business.

Dr. Eric Fishman: Many people may not know about your history. You worked with CNET and you've got Salesforce.com, obviously a substantial company, as one of the investors in Practice Fusion.

Ryan Howard: Well, I personally worked for the founder of CNET, Halsey Minor. Halsey was, again, founder of CNET and he also founded Grand Central. He was one of the largest individual investors in Salesforce.com really an on-demand pioneer. The company, Practice Fusion has an investment and a technology partnership from SalesForce.com so obviously they're an on-demand pioneer. When you think about it, they're one of the largest cloud-based enterprise or software as a service enterprise communities in the world. They have about a million users and so they really understand a lot about getting users rapidly on a platform and we've had the benefit of their experience.

Dr. Eric Fishman: Seems to be working. What do you see as the future for the next 12 months?

Ryan Howard: I think by the end of the year, we'll probably break in about 100,000 users. I think the future of the product is really a feature we have coming out in the next two months called Chart Share. What is does is that - we spoke earlier about HL7 being a dirty word for example.

Dr. Eric Fishman: Not a dirty word but complicated.

Ryan Howard: Complicated and I do think it's a dirty word. Why I say that is that you electricity right? You go home and you plug in your laptop and power automatically comes to it but you don't know where your power grid is or your converter box so it's something that they just don't even know about. You don't manage the infrastructure or the power station at your house and it's really the same concept. We already take care of a lot of that complex interoperability and connectivity in the back end. We're taking it to the next level of sharing data in real time with other doctors. When you look at our business model because it's free to the doctor and because it's web-based, we will have a feature called Chart Share that allows, say myself as a PCP, to share a patient chart with you as a specialist real time but what we'll be doing in the background is actually giving you a Practice Fusion account. Now if you want, you can keep using the products so we have continuity between us. If you don't want to do that you can export it.

You can export the CCR, put it in your old legacy system or you can just print it and put it to paper but really it causes this very viral, for lack of a better term in health care, method of helping us expand but also it really solves the main problem of interoperability in a space (inaudible). No one else can do it and no one else does.

Dr. Eric Fishman: There's a number of ways of attacking that issue but seems like you got very interesting solution.

Ryan Howard: Absolutely, yes.

Dr. Eric Fishman: Ryan, let's go to business model for a second. Obviously, it's free. A lot of physicians want to know is the company that I, if not invested money, invest their time in will be there tomorrow. If I can ask are you profitable, how's the company doing?

Ryan Howard: Right now we're in (inaudible) growth mode so we're constantly spending a little more. We're hiring a few employees a week right now. We're trying to really keep up with the demand of the system but we do have significant revenue at this point. I think a lot of the other vendors are selling based on fear and if they have an inferior product, they can argue that all day long. They might be like, a newer vendor isn't as secure but for our specific case, we're funded by a billion dollar company. We're also backed by Morganthaler Ventures. They're a $400 million fund so we have significant funding, major backers.

Dr. Eric Fishman: And if you've already got the revenue then there's sustainable growth.

Ryan Howard: We're in great shape. Absolutely.

Dr. Eric Fishman: Ryan, thank you very much.

Ryan Howard: Great. Thank you much

Dr. Eric Fishman: This is Dr. Eric Fishman. We've been speaking with Ryan Howard, CEO of Practice Fusion. Thank you.

One Response

  • Angela Smith says:

    Does Practice Fusion have the capacity to integrate to different types of EMR into a single EHR? For example Intergy by Sage and Titanium schedule.

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