Practice Fusion Drops Free Software Model

More than a decade ago, an upstart company grabbed the health IT world’s attention when it rolled out a free advertising-based EMR. The company, Practice Fusion, wasn’t the only venture offering free EMR access. But its brash attitude and unapologetic defense of its business model won the industry’s grudging acceptance, and its occasional bouts of hyper-aggressive sales tactics actually made its story more interesting.

Now, in the wake of its $100 million agreement to sell out to Allscripts, the end of an era has arrived. The company has announced that it’s now switching to a paid subscription model, priced at $100 per physician per month, according to CNBC.

Prior to his 2015 ouster from the company, founder and then-CEO Ryan Howard had continued to insist that Practice Fusion software would always be free. Apparently, over the long run, this didn’t work out. (No need to shed any tears for Howard, by the way. He’s comfortably ensconced in a new venture called iBeat. The company is building a cellular smartwatch that monitors heart rhythms and calls emergency responders in a crisis.)

Most observers see the $100 million sale to Allscripts as a bad deal for Practice Fusion which, as my colleague John Lynn notes, had raised more than $157 million over its lifespan.

It seems fair to say that if the free EMR model was still working, Allscripts wouldn’t have been able to pick up Practice Fusion so cheaply.Its increasingly tarnished reputation can’t have helped either. The company has always pushed the envelope with its aggressive marketing strategies, but in recent years it pretty much burst the envelope open.

Two years ago, Practice Fusion got slapped by the FTC for engaging in deceptive consumer marketing practices. Its problems began in 2012 when it began to send out email messages to patients of providers who used its EMR. According to the agency, Practice Fusion never told consumers that the doctors didn’t send the email messages, nor informed them that their responses to the emails would be made public. It’s hard to tell whether this played a role in the firm’s seeming decline, but it certainly didn’t help.

In all fairness, Howard and his team deserve a great deal of credit for breaking ground in HIT. Offering doctors an alternative to the hugely expensive, doctor-hostile EMRs available to medical practices at the time was a big accomplishment and provided a lifeline for many medical practices. Unlike many of its old-school competitors, Practice Fusion was physician-centric and affordable, and that was no small feat either. But over time, its big idea didn’t prove out. Practice Fusion has been forced to admit that there’s no (even ad-based) lunch.

Let’s see what Allscripts does with Practice Fusion’s assets and whether it invests in its latest addition to the corporate family. My guess is that Allscripts will let its latest toy languish and eventually die, but you never know. Maybe Practice Fusion will be reborn.

About the author

Anne Zieger

Anne Zieger

Anne Zieger is a healthcare journalist who has written about the industry for 30 years. Her work has appeared in all of the leading healthcare industry publications, and she's served as editor in chief of several healthcare B2B sites.