It had been reported by CNBC that Practice Fusion would have an announcement in March regarding their business model. This same report stated that current customers that have used Practice Fusion as a free EHR solution, will now be charged $100 a month per physician beginning this summer.
A valuation that needed evaluation
An extremely popular EHR solution for small businesses, Practice Fusion boasts over 100,000 healthcare users.
Once a Wall Street darling, the final acquisition price of only $100 million was a fraction of the reported $1.5 billion valuation in 2016 when it hired JP Morgan to consider an IPO.
Acquired by Allscripts in January of this year, it became apparent that Practice Fusion’s free business model would likely soon come to an end.
Adding salt to the wound, there is angst reported with common shareholders of Practice Fusion feeling shut out while executives were able to still make out with a pre-arranged deal.
Is free too good to be true?
The founder and previous CEO, Ryan Howard of Practice Fusion stated in 2015 that “Practice Fusion will always be free.”
Practice Fusion was able to provide their EHR for free because their business model leveraged advertising on its platform to generate revenue. The premise was not that much different from how Google makes money. Practice Fusion felt that healthcare companies would want to advertise on their platform to reach a narrowly targeted audience of healthcare providers. And healthcare providers would put up with the advertising because the solution was free. Seemed like a small price to pay for many small medical practices.
But the digital world of marketing and advertising is continuously evolving and Practice Fusion had a steep hill to climb to continue as they had been.
Practice Fusion charging? If only we had a crystal ball…
The company stated, “We have a product announcement upcoming in early March, and we look forward to sharing it further with you and all of our stakeholders very soon,”
Here we are at the end of March and there has been no announcement. We will have to wait and see. Stay tuned…