College of American Pathologists
Printable Version







July 2007

Raymond D. Aller, MD
Hal Weiner

bullet With Practice Fusion’s online EMR system, cost is no object

A San Francisco-based software developer is refuting the claim that there’s no such thing as a free lunch by offering clinicians a free online electronic medical record system.

This spring, Practice Fusion received a Top Health IT Innovators award from FierceHealthIT, an online source of health care news, for its program that offers a free online EMR system to physicians. Practice Fusion will sell advertising to cover the cost of the system through search engine giant Google and Healthline, an online source of consumer health care information. Practice Fusion also markets practice management, claims management, and scheduling systems.

As of mid-June, 600 physician practices had contracted to use the free online EMR system, which is slated to complete beta testing this fall, and 3,000 contracts were pending, according to company CEO Ryan Howard.

In general, Howard says, health plans are interested in the EMR as a value-added premium for their physician members. As a central repository of health care information, the EMR system also has potential for use in disease management, he adds.

Practice Fusion had been selling the EMR system until this spring, at which time the company announced that it would offer it for free because expense is the remaining barrier keeping physicians from using EMRs. “Price was really the last issue that we saw in the marketplace,” says Howard. “A lot of vendors are just gouging physicians today, and we came up with essentially a novel way to subsidize the cost of the solution.”

With the free system, an advertisement appears on the computer screen when a user views a patient’s record. The type of advertisement that appears is based on the physician’s specialty and the condition of the patient whose record is being viewed. The process of getting the appropriate ad to the appropriate physician is straightforward. Practice Fusion sends key words, based on fields in the patient record, to the ad service’s Web site. The Web site uses the key words to select an appropriate advertisement and then sends it to the EMR application for display next to the patient’s record. Howard is quick to point out that no identifiable patient information is accessible to anyone except the physician.

“What’s being passed to Google are key words. And the key word might be ‘ob/gyn,’ it might be ‘diabetes,’ or it might be ‘heart condition,’” he explains. “There’s no patient information being shared with advertisers.”

Practice Fusion is targeting its EMR system at practice groups, rather than individual physicians. Groups who choose not to receive the advertising pay a monthly fee of $250 per doctor.

The company has a service agreement with Google’s online advertising program, AdSense, and has signed an ongoing contract with Healthline. Howard stresses that the arrangement with Google is more than just a regular account. “We are the second customer ever of Google’s to integrate directly to an API [application programming interface],” he says, noting the direct, secure connection to the company’s system.

Health plans, medical groups, and pharmaceutical companies have expressed interest in advertising on the EMR system, says Howard. And Practice Fusion recently signed up a medical transcription company.

The beta phase has been running smoothly, Howard adds, noting the system’s use of updated Web 2.0 technology. “It’s a phenomenal piece of technology. So it shines on its own,” he says. “The free part just really is a novel way to subsidize the cost of it.”

The online system eliminates installation and integration issues. It’s also intuitive, making it user friendly, and interoperable, Howard says.

Practice Fusion expects to have 1,000 practices signed up to use the system by the end of the year and 7,000 practices by the end of 2008, he notes. A health care organization representing 40,000 physicians has expressed interest in the program, as have several other health care plans. “We’re engaged with some of the largest health plans in the country right now, probably a half dozen of them,” Howard says.

The company is also working on deals with new user groups that, as Howard describes it, will put the company on the map. “There’s been so much interest,” he says, “it’s hard to keep up.”

Despite a growing fan base, some in the health care industry are wary of such advertising arrangements. Joy Pritts, a research associate professor at Georgetown University’s Health Policy Institute, says there may not be any direct privacy issues with Practice Fusion’s technology, but there are other issues that may cause concern for physicians and consumers.

“Who is going to be monitoring these programs to see what information truly is shared?” asks Pritts, noting the lack of an independent auditor to verify that no personal information is being transferred. “There’s a lot of trust involved in doing this.”

Such an intense form of advertising can also influence physician prescribing patterns, says Pritts, leading clinicians to prescribe a certain medication based on advertising rather than what’s best for the patient. This means cheaper alternatives may be overlooked—something that Pritts says goes against the EMR movement’s goal to improve health care and reduce costs. “I’m not sure that this type of model for an electronic health record supports either of those propositions,” she says.

But Practice Fusion’s chief medical officer, Robert Rowley, MD, who has been involved in developing the EMR system, says the business model puts the cost of such systems on those who will benefit from them financially—health plans, who will be among the advertisers.

A physician working on the chart of a patient with congestive heart failure, for example, would receive a best practices prompt from the patient’s health plan that would note the preferred way of managing this disease, Dr. Rowley explains. That prompt is considered an ad, and, “The health plan then paid for that ad,” says Dr. Rowley, a family practice physician in Hayward, Calif.

Dr. Rowley cites statistics that show that only 11 percent of the efficiencies generated by the use of EMRs is reaped by physicians, while health plans have the most to gain. This advertising model, he says, puts the cost burden of an EMR system where it belongs. “Those who benefit from it are the ones who pay for it,” Dr. Rowley adds. “The burden is taken off of the physician.”

bullet Misys Healthcare signs agreements to sell hospital systems business

Misys Healthcare Systems recently announced that it is divesting itself of its hospital systems business through two deals totaling $414.5 million and will focus on selling computerized medical record systems to physician offices.

Misys announced last month that it is selling its diagnostic systems business, including its Misys Laboratory product line, to Vista Equity Partners for $381.5 million. “We are long-term investors in technology-enabled companies that provide leadership in their markets,” says Robert F. Smith, managing principal of Vista Equity Partners. “We are committed to the health care market, as evidenced by our previous acquisition of surgical information systems, and have long been impressed with the product offerings, vision, and market leadership found within the diagnostic systems business of Misys Healthcare.”

Misys has also agreed to sell its computerized patient record systems business aimed at hospitals to QuadraMed Corp. for $33 million in cash. “Adding the CRP product to QuadraMed’s suite of health care solutions is a key step in our plan to accelerate QuadraMed’s growth while delivering on our care-based revenue cycle strategy,” says Keith Hagen, CEO of QuadraMed. “As a result of this acquisition, QuadraMed will be positioned to support the clinical information systems needs of large complex hospitals and health care delivery systems, particularly those focused on full clinical integration, clinical decision support, and computerized physician order entry.”

The sales are part of Misys’ five-year plan to boost revenue, cut costs, and revamp products. “We are now focusing very tightly on what we do best,” Mike Holsinger, director of communications for Misys, told CAP TODAY. “We believe that our best opportunity for growth lies in the ambulatory space and in building connected communities. Misys is rebalancing its portfolio in order to execute that strategy and drive value.”

Misys expects its deals with Vista and QuadraMed to close this fall, Holsinger says. The company will continue operating out of its Raleigh, NC-based headquarters.

bullet Visionary Medical Systems purchases Antek HealthWare

Visionary Medical Systems recently acquired Antek HealthWare, LLC, for an undisclosed sum.

The acquisition represents a strategic move for Visionary into the laboratory information systems arena. Visionary markets an integrated line of clinical, financial, document-management, and chronic care-management products.

“By integrating electronic lab results with Visionary’s EHR, physicians will be able to reduce the time required to report on and consult patient studies,” says Andy Pollack, president of Antek.

Antek’s management team will continue to manage, deliver, and support its current suite of products, including its LabDaq LIS and Daqbilling system.

bullet Cerner gets FDA clearance for transfusion product

Cerner Corp. has received FDA 510(k) clearance for its Cerner Bridge transfusion administration and specimen collections software.

The product provides bar-code scanning technology, integrates wireless networks and clinical systems, and uses positive patient identification.

With FDA clearance of the product, Cerner completes its point-of-care suite for Cerner Bridge Medical, which also includes a medication administration solution.

bullet Data Innovations Europe acquires PGP

The middleware vendors Data Innovations Europe and PGP, both based in Brussels, Belgium, have joined forces with DIE’s purchase of PGP for an undisclosed sum.

The move positions DIE’s parent company, Data Innovations, as the world’s largest laboratory middleware company, with more than 6,500 middleware systems installed in 49 countries.

bullet Orchard releases new version of Harvest LIS

Orchard Software has released Harvest LIS version 7.5.

Among the new features in version 7.5 are:

  • improved result delivery rules. A single rule may contain groups of locations, providers, and other conditions, as well as handle multiple printers or fax destinations.
  • insurance management during order entry, which allows the user to easily select and rearrange plans to address unique insurance situations to ensure reimbursement.
  • scheduling of automatic quality control when specific choices are ordered for a patient.
  • automatic order creation as the LIS receives results from a reference lab or host system.
  • automatic report scheduling capabilities for such management reports as billing summary, order choice utilization, test utilization, and collection list.
  • storage of up to eight ICD-9 codes with each order choice.
  • date and time exclusions in turnaround time reports.
  • rules for label printing. Rules can be written based on collection location, ordering location, and priority.

bullet Upcoming meeting

The University of Washington Center for Public Health Informatics will host the conference PHI2007: Creating a Global Partnership in Public Health Informatics on Sept. 17 and 18 in Seattle. The World Health Organization is co-organizer of the conference.

The goal of the meeting is to create a partnership of individuals, organizations, and research centers to develop a framework for addressing strategic health information issues and requirements for global population health interventions. The conference will specifically address standards for interoperability, data collection and data sharing, and education and training.

Additional information about the conference is available at https:// phi 2007. or by calling 206-221-7444. Early registration is recommended due to space limitations.

Dr. Aller is director of bioterrorism preparedness and response for Los Angeles County Public Health Acute Communicable Diseases. He can be reached at Hal Weiner is president of Weiner Consulting Services, LLC, Florence, Ore. He can be reached at