Practice Fusion lays off one quarter of its workforce

San Francisco-based ambulatory care electronic health record vendor Practice Fusion has laid off 75 employees, about a quarter of its work force, according to articles in Fast Company and TechCrunch.

The personnel affected involved those in the engineering, product, marketing and customer success departments. The articles indicate that only mid- and lower-level staff, not executive personnel, were impacted. TechCrunch confirmed that the restructuring, which was announced at a companywide meeting, was done to enable the vendor to "become cash flow positive."

Practice Fusion, which calls itself the top cloud-based EHR platform for doctors and patients, announced just last month that it had accelerated year over year revenue growth of more than 70 percent and had added 5,000 new active practices in 2015. It has gone through other recent changes, however. For instance, founder Ryan Howard stepped down as CEO in August 2015, according to the Wall Street Journal, and was replaced by Tom Langan. The company also has moved into new product lines, such as the offering in 2015 of prescription coupons in its EHRs that physicians can pass on to their patients and the creation of a national healthcare data base for professionals, public health organizations and research institutions.

It operates a business model that is somewhat different from some of the other EHR vendors by providing its tools for free to physicians; it makes money by selling advertising to pharmaceutical companies and others, enabling them to market to the physician users. 

The strategy is not without a bit of controversy. There have been concerns that the ads could run afoul of restrictions on marketing imposed on physicians by the Health Insurance Portability and Accountability Act (HIPAA) and that the sponsored notifications could be interpreted as violating the federal anti-kickback statute. Practice Fusion has refuted such concerns.

To learn more:
- here's the company's announcement of revenue growth
- read the Fast Company article
- check out the TechCrunch article
- here's the Wall Street Journal article