Practice Fusion’s changes show all good things must end
Wednesday, March 07, 2018
Can you hear that? It's the sound of thousands of medical practice administrators collectively sighing and thinking that all good things must come to an end. At the same time, a small group of executives are probably wondering whether they should have cashed in their chips sooner.
The second bit of news first: Practice Fusion — the formerly independent electronic health record company known for offering a free, training wheels-type of EHR — recently sold itself to Allscripts in a deal reported to be worth about $100 million. That's a huge drop in price from when the EHR market was truly on fire at the earlier part of the decade and Practice Fusion was valued at $1.5 billion.
Alas, the market cooled quickly following the heyday of the federal meaningful use program designed to get physicians off paper-based processes and onto electronic systems. Per reports, Practice Fusion officials one considered taking the company public, but that was a lost cause when the federal incentive funds dried up.
Practice Fusion laid off about 25 percent of staff in early 2016. This was followed by the posting of a "for sale" sign. Then, along came Allscripts with a cash deal finalized in late 2017.
During a recent earnings call, Allscripts leadership said the move was designed to reach a broader portion of the outpatient market. Practice Fusion helps the company do this because of its services to about 30,000 ambulatory practices and 5 million patient monthly visits.
Getting back to those practice administrators: Change is constant, especially in business. For each of these 30,000 practices that uses Practice Fusion, the technology previously was a free, ad-sponsored offering. No more.
Allscripts recently announced that the free party is over and Practice Fusion will abandon its free EHR software model, CNBC reports. As early as this summer, the San Francisco-based firm will offer its service to physicians on a subscription basis at $100 per month.
As Healthcare Dive points out, Practice Fusion's no-fee business strategy — cloud-based and scalable — is what made it a market leader among small physician practices. Additionally, the site notes another long-talked-about trend: vendor consolidation.
"The sale underscores a broader consolidation trend in the digital health space," according to Healthcare Dive. "With the end of MU incentives, a mined EHR market and shift toward consumer-centric models, larger companies like Allscripts are hungry for new revenue streams. One answer is to snap up smaller vendors that expand code, customer reach or geographic footprint."
All of this change doesn't mean bad things are abundant. For Practice Fusion clients, the purchase by Allscripts might lead to additional added value that outweighs the future costs of the technology. And for practice administrators who would rather place their financial commitments elsewhere, there are still other options available for their consideration.
For some, the good times might be coming to an end. For others, the good times might just be getting started.
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