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Digital Ads in Your Chart?

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Doctors show willingness to tolerate advertising in exchange for free access to a web-based electronic health record service.

For Dr. Vatsal Thakkar, getting to use electronic health records for free is just a bonus – the real attraction is the accessibility and versatility of having a web-based record-keeping service.

And like a growing number of doctors making the transition to online EHRs, the New York psychiatrist doesn’t mind having to put up with an ad on the screen to get access to the service.

“Before I started using it, I guess the use of ads was a question, because it seemed a little eerie,” said Dr. Thakkar. But with only one ad on each screen view, he said “it almost feels light compared to any other web activity that you do.”

Along with more than 150,000 other healthcare providers, he gravitated to a free EHR offered by Practice Fusion. The San Francisco-based company is one of the fastest-growing EHR suppliers in the country, having grown nearly threefold from 60,000 users over the past two years.

Currently only a few EHR providers offer free service, with Practice Fusion and its smaller downstate rival Mitochon Systems the best known. Both Laguna Hills-based Mitochon Systems and Practice Fusion generate much of their revenue from ads placed on the free EHRs. Using a business model that recently earned it plaudits from the World Economic Forum as a Technology Pioneer, Practice Fusion, in particular, is banking on expectations that doctors now mandated by the Obama administration to go electronic by 2014 will be attracted to a free service.

“We definitely benefitted from the shift in focus, with doctors wanting to adopt technology when typically they have not,” Lauren Fifield, senior health policy advisor at Practice Fusion, told HealthBiz Decoded.

Fifield compares the company’s business model to Google’s, saying, “The concept of being free is part of the natural path of moving to a web-based model.”

Free for All?

It’s a business proposition that is attractive not only to the healthcare providers, but to pharmaceutical companies and other advertisers willing to pay to reach doctors at the point of service.

EHRs “create a good environment for a marketing platform, where physicians don’t feel threatened [by ads] because they know they’re making the right decisions for their patients,” said John Mangano, vice president of marketing solutions at Internet analytics company comScore Inc. “But by the same token, they can be reached by this media.”

A December study by the Reston, Va.-based firm found that while just 4 percent of physicians access EHRs online, they spend much more time on those sites than on other healthcare-related sites. While 81 percent of the respondents visited content sites geared specifically toward physicians, they only spent an average of five minutes a day on those sites – compared with 18 minutes on EHRs.

For advertisers, getting access to physicians while they’re in with a patient is “potentially a valuable proposition for them,” said Mangano.

A free EHR would likely be appealing to smaller practices, which tend to be a “frugal bunch,” he said. But the EHR service industry is shifting too quickly to settle on a single business model.

Indeed, Practice Fusion itself is adapting its revenue mix as it continues to grow and reach a critical mass of physicians and their patient records. A growing revenue stream comes from the more than 150 labs across the country that want to connect to the company’s EHR and send test results directly to users.

The ads still provide a “viable, strong revenue stream,” said Fifield. “But what we are now able to do is look at other parts of the ecosystem that are running inefficiently.”

An Ethical Dilemma?

When Dr. Thakkar opted for Practice Fusion’s EHR, he says he was less interested in free cost than in the functionality of a web-based service. He can access the records from home or either of his office locations, while being able to make simultaneous documentations with staff members.

Most other Practice Fusion clients appear to share his tolerance of the ads as well, since only 1 percent have opted to pay $100 a month for the company’s ad-free service.

“It’s not like a drug rep pitching to you,” said Dr. Thakkar, adding that the pharmaceutical ads are of the kind placed on newspaper sites. Healthcare-related ads probably make up less than half the mix on the site, he said, having seen banners pitching cars and trips, among other things.

“It doesn’t feel overly intrusive,” he said. “If it was reading the chart and basing ads on that, that would be different.”

Both Practice Fusion and Mitochon stress that their use of ads complies with the patient privacy protections of the Health Insurance Portability and Accountability Act, or HIPAA, as well as the pharmaceutical ad regulations of the U.S. Food and Drug Administration.

“Philosophically, the company feels very strongly about providing this product, and in terms of ads – completely comfortable,” said Fifield.

David Muntz, the principal deputy national coordinator at the Office of the National Coordinator for Health Information Technology (ONC), which is leading the government’s health technology push, said the issue may be impacted more by personal preference than ethics.

“To the point where it’s a distraction from core duties, then people will shy away from those applications,” said Muntz. This pattern is following the evolution of many Internet and app offerings that begin without ads. Ethics enters the conversation because the distraction of ads during use of other programs does not seem to have the same potential impact as it does in healthcare.

Yet Mangano of comScore, which analyzes online marketing, said that while most physicians will say advertising doesn’t influence them, it does have some effect.

“Not all campaigns create a change in a physician’s behavior, but they do change awareness and perceptions of a brand,” he said. But that doesn’t mean it’s inappropriate, he added, since his research suggests ads are unlikely to change what a doctor prescribes.


Photo courtesy of MC4 Army via Flickr