Free electronic medical record system comes with strings attached

Practice Fusion's model is the first known EMR to place ads throughout Web-based patient records and collect patient data directly from doctors for commercial sale.

By Pamela Lewis Dolan, AMNews staff. May 7, 2007.

Realizing that many practices are unable to install an electronic medical record system due to their cost, Practice Fusion, a San Francisco-based company, is offering a Web-based system at a price it would seem no one can refuse -- free.

But free comes with a price. The system would put advertising on the medical record. And nonidentified data from the patient records would be packaged and sold for marketing purposes.

Critics say Practice Fusion's business model is taking advantage of patient-doctor trust by commercializing patient information. But others say this model might be a way to get EMRs into physicians' offices.

Practice Fusion founder and CEO Ryan Howard said the goal was to create an inexpensive, on-demand model that removed the complexities that most physician practices were dealing with. He said his company wanted to offer a low-cost EMR, but when it realized that for many physicians any cost was one "you'd rather not incur," it came up with the idea to offer it for free under a business model that would allow the company to profit on the back end. If a practice doesn't want ads, or the data de-identified and sold, the practice would pay $250 per physician, per month, for the system.

"There's no denying the model is novel," said Howard, formerly an independent consultant for Brown & Toland Medical Group, a 1,500-physician independent practice association in the San Francisco area. "But I think it will be successful."

Howard said several large groups already have signed on, which brings the system to 2,600 physicians. Don E. Detmer, MD, president and CEO of the American Medical Informatics Assn., said low-cost EMRs clearly can be seen as a benefit to doctors. And their availability helps move the nation toward President Bush's goal of having a national health network by 2014.