Practice Fusion Bids for Dominance in the Doctor’s Office with a Free, Ad-Supported Electronic Health Record System

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made. “Everything WebMD does is free, and they’re doing $500 million a year in revenue,” he points out. “When we finally went to free, it was counterintuitive. But look where we’re at now. We are the largest, fastest-growing community [of EHR users]. We are bringing on more users daily, I would be so bold as to say, than all of our competitors put together.”

You can ascribe much of Practice Fusion’s success so far to Howard’s stubbornness. Back in 2008, the startup came perilously close to running out of money. Howard had already sold his house and his car to keep the company afloat, and a second house was in foreclosure. “I’d gotten into a motorcycle accident a few years earlier, and when the settlement check came, I used that check to make payroll,” he told the entrepreneurs in Mountain View. “When we got funded, I was four years behind on my taxes and I needed two root canals.” The moral of the story, in his eyes: “Whatever you are willing to do to pursue your dream, you will most likely have to go beyond that.”

Howard grew up in a blue-collar family in New Hampshire, fathered a son while still in high school, and dropped out. “I have never thrived in the academic environment,” he says. “I’ve learned in a different way.” He eventually got his GED and attended community college, then went on to the University of New Hampshire, St. Mary’s College of California, and the Haas School of Business at UC Berkeley.

But along the way, he worked on manufacturing lines and shipping docks for companies like New Hampshire-based Cabletron Systems—experiences, he says, that gave him a first-hand understanding of sourcing and supply chains. He sharpened that understanding as a product manager at InterTrade Systems, which specializes in electronic data interchange (EDI) between businesses. And his EDI expertise eventually landed him in the IT department at Brown & Toland, the huge San Francisco-based physician group.

That was his first exposure to healthcare—and he says he quickly saw parallels with manufacturing and other industries. “You have a patient and he goes to the doctor, and the doctor sends a claim to an insurance payer, and it comes back as an EOB, an explanation of benefits,” he says. “This is totally synonymous with purchase orders and invoices and advance ship notices. The process is the same.”

But while Howard worked to help Brown & Toland’s physicians computerize their billing systems, he noticed that only about 10 percent of them stored their patients’ health records in digital form. “The problem fascinated me. For a year or two while I was at B&T, I was pondering things like ‘Where are the records? Who owns them? How you access them? How do you synchronize them?’ The billing problem is simple. EHRs were infinitely more complex.”

The final piece of the founding concept for Practice Fusion came while Howard was at GrandCentral, a startup created by Internet entrepreneur and CNET founder Halsey Minor. Most people remember GrandCentral for its voice-over-Internet telephony service, which later became the core of Google Voice. But Howard says the company started out as an “integration on demand” provider. “Halsey wanted to create a platform where you could build an app in your enterprise, and have that connect to any other app; it was like at Salesforce, but he was way ahead of the curve,” Howard says.

The only problem with GrandCentral was that it didn’t have a killer app for its platform, Howard says. But did, with its low-cost customer relationship management system. “That was when I had the epiphany,” Howard says. “Doctors can’t afford EHR technology. The average family physician in California makes $120,000 a year.” But if somebody were to … Next Page »

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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  • civisisus

    wow,so much bs in here the smell’s making me nauseous

    ryan’s never met a metric he didn’t like (to exaggerate)

    please, people, do yourself a favor – find your health care tech info elsewhere

  • Wade Roush

    Civisisus: If you have a specific criticism or data that counters what’s in the story, by all means share it here, or e-mail me at Otherwise this just trolling.

  • Ram

    Wade, I’m considering Practice Fusion for a client and was reading up on them. This is the most detailed writeup I’ve come across. Thanks!!

  • Hillary

    I would rather pay than compromise my patient’s privacy.