Practice Fusion Inc., a San Francisco startup, offers systems to put medical records in digital files, a move experts say is one of the keys to controlling health care costs. Electronic medical records systems generally cost doctors upward of $20,000 to install. But Practice Fusion offers the service at a price that's hard to beat - free.
The company is teaming up with Google Inc. to offer physicians and medical groups a Web-based digital medical records system at no cost. The service will be funded by advertising.
The Bush administration has made digitizing the nation's medical records by 2014 one of main elements of its health care program. But physicians - especially in small practices - have been slow to respond. Making computerized systems affordable could be what's needed to get them to sign on.
In addition to a medical records system, Practice Fusion offers practice-management tools, such as billing systems. It says that by partnering with Google's AdSense network, the company can cover the cost of its services.
Practice Fusion is not the only company offering Internet-based medical-record systems. "We just happened to find a way to subsidize the cost of it," said Ryan Howard, the company's chief executive officer.
"There are 830,000 doctors in this country and two-thirds are in practice with eight physicians or less," said Howard, 31, who previously integrated systems for San Francisco's Brown & Toland Medical Group. "We help out the little guy."
Practice Fusion's deal with Google is what makes a free medical records system possible. Google's AdSense program will generate ads that will be displayed as the records system is used.
When a doctor using the service calls up a patient's health record, AdSense will recognize certain keywords - such as "diabetes" - and ads related to that condition will appear on the page.
Advertising will be discreet - no pop-ups - and keywords are limited to a patient's condition, diagnosis or treatment. Practice Fusion says it complies with all federal privacy laws and will protect patient data, Howard said.
Pharmaceutical companies interested in having their ads viewed by a captive physician audience are expected to be the primary advertising clients. But Howard says the model will also appeal to insurance companies and other health-related firms and services.
Doctors will have the option of paying a $250 monthly fee to use the system without advertisements.
Under the deal, Google will share more than half the advertising revenue. Both parties declined to reveal financial details.
Despite the reassurances that sensitive information will be protected, combining patient data with an Internet search engine supported by advertising is enough to set privacy advocates' teeth on edge.
"It still comes down to the fact the company is using people's sensitive, personal information for profit," said Allison Knight, staff attorney for the Electronic Privacy Information Center in Washington.
Knight acknowledged drug companies already advertise heavily to doctors through sales representatives and direct mail. But, she said, such methods are "not the same as putting it in their (physicians') brain as they're looking at your particular file."
Google will know how many ads were viewed and which received "click-throughs," but will not be able to connect that information to individual patients or physicians, Howard said. Google officials said their company will have no access to any patient data. Practice Fusion will provide advertisers with basic demographic information about the physicians who view the ads - such as their city and specialty - but will not reveal names.
Physicians Integrated Medical Group, an association of about 500 independent doctors in San Francisco and San Mateo, Calif. counties, is the first medical group to sign on with Practice Fusion.
"We have a system and we receive claims in the mail and we process them," said Jim Rodriguez, the medical group's CEO. "But this will allow us to do it all electronically."
Physicians Integrated Medical Group initially plans to offer the system within the next month or 45 days to allow its doctors to manage billing electronically. Eventually, the group will encourage physicians to use the system to manage patient medical records.
Rodriguez said 70 to 80 percent of the physicians in his group have some form of computerized billing system, but fewer than 15 percent keep electronic medical records.