In 2007, Practice Fusion’s Web-based electronic health record (EHR) system was used by 92 medical professionals. Today the company has a customer base of more than 100,000 doctors and clinical office staff, making it the fourth-largest vendor of EHR systems for physicians in the U.S., according to industry researcher SK&A. What sets the 350-employee startup apart from its much larger competitors is that it makes its product available to doctors for free. Howard, a former IT consultant to a large Bay Area medical group, says that he tried charging $300 a month for access to Practice Fusion’s system. Even that, though, proved too high for doctors, a high proportion of whom own their practices and must foot the bill for technology upgrades. So a few months after the launch, Howard dropped the price to zero. The company makes money by charging more than 70,000 pharmacies, 300 diagnostics labs, and 21 imaging centers for access to its captive community of medical pros. For example, labs pay for the convenience of transmitting test results rather than faxing them, while drugmakers pay to deliver targeted ads to doctors. For an additional fee, companies can use a Practice Fusion tool to sift through its trove of more than 80 million patient records to identify patterns, such as why doctors might be choosing one drug over another. Link
