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When Dr. Michael West decided to make his endocrinology practice a “paperless” office, he had no idea what he was getting himself into.

He and practice manager Ken Harrington researched electronic health record systems throughout the fall of 2009, ultimately sinking tens of thousands of dollars into a complex EHR system for the growing Washington D.C. medical practice.

What it actually provided, however, was a disaster. Within two months of installing the system, West jettisoned it and headed back to the drawing board.

One night, Harrington and West were looking up EHR systems online and came across Practice Fusion. On a whim, they decided to try it. Now scheduling appointments, prescribing medications, storing and pulling up medical histories, preparing home care instructions for patients – none of it generates paper. West says the improved efficiency has allowed him to reduce staffing and cut hours from his work day.

That’s what Practice Fusion CEO and founder Ryan Howard had in mind when he left his position developing a claims management system for a large medical group. Too much technology was going into medical payment systems, he feared, while very little was being focused on the records that actually make a difference in patients’ lives. And that wasn’t about to change, he worried, because most medical practices are small businesses unable to hire dedicated IT personnel. With EMR systems starting around $50,000, most doctors simply couldn’t afford to go digital.

“Ninety percent of doctors do have a computerized billing system, but 90% of doctors don’t have an electronic medical records system,” he says. “That means the focus is on getting paid, not on healthcare.”

Practice Fusion initially planned to charge doctors $300 per month to use its web-based software, but Howard quickly dropped all charges. Physicians now use Practice Fusion for free and the company has started to make money by analyzing the generalized health data that they pour into the system each day. Already, more than 70,000 users with a total of 9 million patients are benefiting from the software, while on average 350 more users sign up each business day. In addition to transforming existing businesses, Practice Fusion’s service has helped to create entirely new enterprises.

Nurse-practitioner Raymond Zakhari says the service has let him create “a turn-key hospital in a backpack” with which he now conducts house calls throughout New York City. Using Practice Fusion, a laptop with a wireless connection, and a few basic medical tools, Zakhari can do physical exams, collect blood samples, prescribe medications, and track a patient’s progress without ever making them leave home.

And because his company, Metro Medical Direct, has few overhead costs, Zakhari says he can be profitable with only two house calls per month.

“I can take care of documentation without carrying around pounds of papers,” he says. “I can see a patient’s chart, so I’m not prescribing blindly. I can send prescriptions to any pharmacy and because so many of them deliver, the patient can have the medication in just a couple of hours. That’s better than some hospitals can do.”

[Image via The National Guard/Flickr]