The heat is on. Doctors, long resistant to taking their practices into the digital age, are finally starting to adopt electronic health records. President Obama said earlier this year he wanted to see all medical records digitized within five years. There have been many reasons for the foot-dragging, but a big one has been cost, about $44,000 per physician to install an electronic health-records system -- not including any ongoing maintenance costs -- according to a study in Health Affairs.
To make sure the digital switch doesn't take an eternity, the government is now kicking in some cash -- some $44,000 per physician over five years to computerize their practices. But it's unclear how many will bother to apply. Wiring up the nation's doctors, hospitals, pharmacies and insurance companies is expected to improve care, reduce medical errors and eliminate the waste that occurs when, say, the same test is ordered by different doctors because it's easier to just do it over then wait for the previous test results to arrive. Needless to say, the push to go paperless has led to something of a land grab among the dozens of software companies that provide such systems, says Ryan Howard, chief executive officer of one such outfit called Practice Fusion.
I caught up with Howard on the sidelines of the Health 2.0 Conference in San Francisco this past week. Practice Fusion's model is different than that of rivals such as All Scripts (MDRX) and eClinicalWorks, he argues. For starters, his software is not installed in any practice, but rather Web-based and hosted on an outside server, similar to what Salesforce.com (CRM) has done with customer-relationship management software. In fact Salesforce.com is a Practice Fusion partner. More unusual, perhaps, is the fact that Practice Fusion software is free, provided that doctors agree to have ads appear on their records system. That some of these ads may be pharmaceutical company ads, which could show up as physicians are writing prescriptions online, may raise some eyebrows.
I talked to Howard about his ad-supported model, data security on the Web and the benefits of doctors entering the electronic age, among other topics. Edited excerpts of our conversation follow:
Daily Finance: Studies frequently cite cost as the main barrier keeping doctors from implementing electronic medical records. How does offering a free, ad-supported model change the proposition?
Ryan Howard: There are multiple barriers to entry. Cost is the biggest one. When you look at the marketplace, 80 percent of doctors practice in offices of eight physicians or less. The average general practitioner in California makes $140,000 a year. If software companies charge $40,000 for their electronic medical record, this is really taking a chunk out of their pay. They pretty much cannot afford the technology.
The second biggest hurdle is implementation. Doctors don't have the expertise or aptitude to install the hardware or software or database connectivity. To have a consultant on site is really expensive. The part of the model that makes a lot of sense is having a managed service, which is what our cloud-based [a system in which people use the Web to access business applications that are available remotely through a tech infrastructure or "cloud"] service offers them.
With your ad-supported model, isn't there a concern that ads for pharmaceuticals that pop up when doctors are prescribing will be not just intrusive but also perhaps inappropriately influential?
To be perfectly transparent, we get anything from vacation ads, to wealth management ads to pharmaceutical ads. There are really two questions. There's intrusiveness and then there's influence. The way the content is provided is very discrete. There are no pop-ups. We never ever sell any physician data. We don't do any matching. As far as the doctors go, the majority goes in for our ad-supported model. [Practice Fusion offers an ad-free model that costs $100 per month per physician].
As far as influence goes, this is a human being. You're flashed ads every day, whether it's a bus driving down the street or it's an ad on Facebook. You're not buying every product you see. Pharmaceuticals know how to promote their products and doctors really create research. It's not so much a branding exercise as it is an educational exercise. So it's not "pick this drug now as you're writing this prescription." It's "Hey doc, take a look at this and see that the efficacy of this drug might be better than the drug that you're used to using."
At the end of the day, the doctor is a highly sought-after individual. He's advertised to in many, many different ways -- through pharmaceutical reps, mailers, throwaways. They're human beings. Any physicians is going to think critically and going to apply that to anything he sees.
So what do you see as the main benefits to doctors going digital?
There are 195,000 deaths a year from medical errors. This will help reduce that. What I do think is the Holy Grail, and where the government is trying to go, is to interoperability among systems or the ability for everyone to share patient charts in real time. The main real case scenario is when you go to your doctor, he sends you to a specialist, making that data that is available in your chart to another doctor, real time.
There are lots of systems out there. Could your system eventually link up to other systems, or to the "network of networks" that the government wants to see built?
Yes. This is the only true platform that is open.
You're using the Web to store and transmit patient data. How do you reassure patients and doctors that this information is secure?
When you look at a standard practice today, data that is stored in a paper environment isn't perfectly safe. Obviously, someone could throw a rock through the window and steal all the paper. The office could burn down. Paper is not all the safe. There is no audit trail. Anyone can look at the chart. You hear this all the time.
You take the next step where you have an electronic health records system installed in your office and you have a whole other set of problems. Your cleaning lady may unplug it tonight. A drive might crash and you may lose all your data. You hear about thefts on the system where you lose 50,000 records at one time.
In my opinion, having the data in a cloud and a HIPPA [Health Insurance Portability and Accountability Act]-compliant infrastructure is much safer. We provide millions of dollars of infrastructure around the doctor's data. We provide Cisco firewalls, data redundancy, mirrored backups and biometric security to get into the facility. We had an office that burned down last year. The doctor logged into his account the next day and had access to all his patient information.
How many doctors have signed up?
We have about 21,000 users now and about half of them doctors. We're in all U.S. states. We're dealing with 21 different specialties and obvious primary care is the biggest specialty.
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