- Hard on the heels of agreeing to sell itself to Allscripts, Practice Fusion is planning to abandon its free EHR software model, CNBC reports.
- Starting this summer, the San Francisco-based vendor will offer its service to physicians on a subscription basis at $100 per month. Practice Fusion has begun notifying clients of the change, according to CNBC.
- The change could be a win for other EHR vendors in the independent practice space, Ken Comee, CEO of rival CareCloud, told CNBC. “Maintaining the customer base could be a challenge because they’re charging for something that was once free,” he said. "It might encourage doctors to evaluate their options.”
The no-fee business strategy — cloud-based and scalable — is what spurred Practice Fusion’s growth and funding in its early years, making the vendor a top EHR choice among small physician practices. At one point the company was valued at $1.2 billion.
Practice Fusion officials considered taking the company public, but that idea fell away as Meaningful Use spending dried up and most providers had an electronic system in place. The company laid off a quarter of its workforce in early 2016 and soon after put up a “For Sale” sign.
Last month, Allscripts inked a definitive agreement to acquire Practice Fusion for $100 million cash. Allscripts on its Q4 earnings call announced the deal had closed. The move will expand the Allscripts presence in outpatient settings. Practice Fusion currently services about 30,000 ambulatory practices and five million patient visits a month.
The sale underscores a broader consolidation trend in the digital health space. 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.
“The EHR market is saturated [and] consolidation is very clear,” Kenneth Kleinberg, vice president of research at Chilmark Research, told Healthcare Dive in January. “Four, five [or] six players is about what we’re looking [at] for 2018.”