Running Head: EHR STRATEGIC MARKETING PLAN
Practice Fusion Strategic Marketing Plan
Gabriel Haukness
Concordia University, St. Paul
Integrated Marketing, MBA 520, Cohort 469
Professor Marciela Harris
January 6, 2012
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Executive Summary
This strategic marketing plan shows what Practice Fusion needs to accomplish to increase
its market share. This is a particularly crowded and entrenched market with little open space and
mostly occupied niches. This plan will detail how Practice Fusion can continue attracting new
users and advertising dollars. This is done by analyzing the opportunities in the HITECH act &
meaningful use, observing the unique product properties of Practice Fusion, target market
identification, strategic goals & their corresponding tactics and finally, critical success factors.
This research also examines items which require more research and existing ambiguities.
Practice Fusion has a unique advantage in the crowded EHR market because of its free nature.
To fully understand this advantage we must examine the market and legislative dynamics which
affect it.
Opportunity Assessment
The Electronic Health Record (EHR) market is best characterized by two forces: technology
and incentives. EHR vendors are software vendors. This means that their products rapidly evolve
and exist in a larger environment which is rapidly evolving. Investment decisions and strategies
are difficult because of the pace of this change. Managers and strategists may be able to
supplement current evaluations of this software market by examining previous mature software
markets and observing what happened there. According to Frost & Sullivan, the “core hospital
EHR market is considered to be mature and dominated by a handful of well-established,
relatively entrenched vendors” yet it is also dynamic due to “increasing provider consolidation,
improper product price points, poor usability, and uncertainties regarding the financial and
logistical fallouts of healthcare reforms present new opportunities (and risks) for both existing
vendors as well as entrants with niche products or service” (Eder, n.d.).
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In addition to being a mature market, the market is also living on a deadline. The Health
Information Technology for Economic and Clinical Health (HITECH) act contained within the
American Recovery and Reinvestment Act (ARRA) provides $20 Billion in incentive payments
for “meaningful use” criteria (Lamont, 2010). However, these incentive payments cover a 5 year
period and will expire by 2015 (Singh & Sawhney, 2006). This creates a dynamic within the
EHR industry of a ticking clock. These two factors will determine to a large extent the success of
individual firms. The deadline also means that profitability of the market exists within a very
short window of opportunity.
Practice Fusion was touted as the Google for doctors because of its free adoption feature.
This key feature is what differentiates it from the competition and gives it a competitive
advantage (Murray, 2006). Practice Fusion has seen rapidly rising growth but we also know that
the market is largely entrenched and mature. This paper surmises that the niche for free users is
rapidly being filled leaving growth opportunities for Practice Fusion limited from a market space
perspective: either they can steal other EHR users or they can keep adding features and create
enough dependency to be able to begin charging customers. Parctice Fusion is best positioned to
continue attracting customers and enhancing software so that it can compete against other clinic
and large-hospital tiered products.
Product Description
Practice Fusion is an innovative product due to it being web / cloud based and its free
cost. This makes it very distinct from other competitors as shown in the Product Value Curve. In
addition to free installation, training and support are both free, There are no hidden costs or
upgrades as it is not a ”freemium” model; however partnered service channels such as billing do
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cost money and referrals to these services is where Practice Fusion gets its revenue from
(Williams, n.d.).
Some have voiced concerns over security in a cloud based application but it is encrypted
by bank level security (“EMR Electronic Medical Records,” n.d.). It is HIPAA and HHS
compliant guaranteeing stimulus payments under the meaningful use criteria. It has a fairly
powerful suite of features for being free.
The product includes: charting, e-prescribing, and a patient dashboard with appointment
scheduling, billing, history chart notes and diagnostics. Diagnostics are done in CMS coding for
easy billing. Lab referrals are also possible with thousands of partnered labs. There is multimedia
support for image files such as X-rays or audio based biometric data.
Marketing Plan
The strategic marketing plan contained here examines the target market and
corresponding market dynamics to understand the place Practice Fusion exists in. We then
examine the product. The Blue Ocean strategy framework is used frequently in analysis and
decisions.
After examining the market, the product and our strategy framework we examine our two
goals of attracting more users and enhancing the software. Each of those sections contains
critical success factors, marketing & creative tactics and key supporting messages.
Target Market
Niche/Segment. The target market for this strategic plan is best suited for ambulatory, eprescribing and emergency within family or clinic sized practices. Many mid-sized and larger
practices currently use Epic or other large scale vendors (“KLAS releases list of 20 best software
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vendors for 2009,” n.d.). Attempting to obtain these customers would have to offer a great
incentive because of the high switching costs involved from starting a new software system.
Demographics. The demographics of the target market are physicians, nurses, IT,
insurers and healthcare financial officers. Because the niche is for family or clinic sized
practices, the doctors and nurses are most important. A culturally neutral tone should be sent due
to an international and non-male dominated workforce. The profit margin of the practice is also
important in that the thinner the margin, the more appealing a free EHR product. The target age
groups would be 28-70. Insurers should be notified that referrers could be a part of the revenue
model.
Psychographics. The first important step is appealing to the customers need for a reliable
(bug-free), free and meaningful use criteria product. Meaningful use has earmarked $32Bn and
providers will want to ensure that not only is it free, but that it meets such criteria (Swab &
Ciotti, 2010). EHR adoption and switching may incur high costs due to training so the product
needs to be very intuitive. Not only should it be intuitive, but it should be emphasized that
switching is very-easy.
Product Value Curve. Shown here is the value curve of Practice Fusion compared to
other vendors.
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In viewing this product mix and the three customer types (close to consuming, refusing &
distant) the key to increasing demand through this campaign is to align the needs of all 3 (Kim,
2005). Distant consumers may not have yet heard there is a free EHR solution and need to be
found. Refusing customers likely use Epic and will not want to change because of switching
costs. What could align all three is the cloud based offering if implemented and marketed
properly.
Strategic Goals
Strategic Goal 1: Attract more users. The first goal is to attract remaining practices of
less than 20 users and subsequently partners and advertiser revenue. Very similar to Google, the
revenue model works through the relationship of advertisers and the users. The previous year
saw 400% growth in new users (“EMR Electronic Medical Records,” n.d.). They should be able
to obtain another 400% in one year through the remainder of adopters in the market.
The first critical success factor is through the ability to leverage current user’s networks
to find more physicians. The marketing tactic to meet the success factor of leveraging existing
social networks will be to build their credibility through hosted community forums, blogs and
discussion boards. Because social communities can build a momentum, fostering and
encouraging discussions is needed (Kotler, 2010). Online communities are only successful when
they are active, so the communities can be made vibrant through participation incentive
programs. Once these communities are very active, the credibility will attract more users due to
the overall positive market sentiment.
The second critical success factors are through referrals from their partners such as billers
and insurers. The previous momentum from 2011’s user surge will provide the needed capital to
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fund advertising in partners channels to spread awareness and increase visibility. The creative
portion of this will consist of e-mail campaigns, search engine optimization and industry & trade
articles and product placement on web pages.
Strategic Goal 2: Enhance software compatibility. The second goal will also lead to
more users through proactive development practices. Practice Fusion currently uses Flash for its
interface. While this makes it animated and smooth, it also renders the application useless when
viewed on iPhones and iPads. This is a huge tactical gap when viewing the popularity of the iOS
system, especially the iPad. These tablets have enormous potential for doctors and clinics, and
their use is rising. This shortcoming could easily deter users who already have such hardware.
This programming change should be in beta-testing by the end of the year. The current site
would then run in parallel to the HTML 5 development platform.
The first critical success factor will be the ability to integrate with existing data
warehouses. This paper advocated Wixom’s and Watson’s approach of incremental building in
three to six month phases, with each building phase replicating existing features of the Flash
based application (Wixom & Watson, 2001). Specifically, these phases must establish “data
definition and device interoperability standardization” (Conley et al., 2008, p. 156).
The other critical success factor is to obtain management support and proper resources.
This has been found to greatly influence implementation success (Wixom & Watson, 2001).
Because this represents a large shift in the way the product is made, it will require much effort.
Tipping Point leadership should be used by identifying “people and activities that exercise a
disproportionate influence on performance. This conserves resources by most effectively
leveraging resources with disproportionate influence” (Kim, 2005, p. 151).
Key Messages
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The two most important themes to communicate are “free” and “everywhere”. The
freeware aspect, and the products core strength needs to still be the core message (Heath &
Heath, Dan, 2007). But just free is not good enough, prospective users had to know that it is
intuitive, and there is free training and support. Where many times free equates to low quality,
advertising that there is minimal risk, you can try it for yourself for free and that there is
unlimited support are ways to overcome that perceptive hurdle.
The cloud based selling point is another factor in something free of great value. Being
cloud based eliminates hosting, the need for IT, hardware problems and many costs. It also offers
safety and security. This cloud hosting is not only free by nature, but arguably better than
something which you pay for.
The other feature to advertise is the upcoming ability to be on all devices. The trend
toward mobile computing continues at a rapid pace and market analysts see this only increasing.
This is where the message of “everywhere” comes into play. With a shift away from Flash and
through using HTML 5, this product can truly be everywhere in ambulatory and emergency
settings. Being “everywhere” on company or personal computers, tablets and phones will be a
great leap and presents new market space for this product.
All communications should emphasize these points. These messages are: free, free
training & support, cloud-based, on all your devices, iOS, and Android & Windows compatible
and intuitive. These messages along with the credibility build on the incentivized online
communities will build momentum and resonate the product well.
Marketing Plan Summary
The target market niche is ambulatory clinics of twenty users or less. Practices on thin
margins will be especially receptive. Consumers need to know they can obtain money in the
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ARRA intended for meaningful use. This products value curve differs from all the competition
because it is free and cloud based. More users will be attracted through vibrant online
communities with participation driven by incentivizing. With the software moving to HTML5,
full device compatibility can be opened to attract more users within that market niche by offering
the capability to work everywhere. Key messages throughout the plan will be “free and
everywhere.”
Additional Research & Unknowns
This research and plan’s scope did not cover the effects of healthcare legislation and
reforms. The relatively new laws emphasize many earmarks dependent on standardization (U.S.
Government Printing Office, 2010). Yet, many of the standardizations are not yet fully defined
under meaningful use due to vagueness in the certifications involved. Another separate study
needs to be done to develop strategies in response to this legislation.
Also past the scope of this research is physician tablet adoption. Finding the number of
practices using iPads and doctors using smart phones for work would be an effective indicator
for the volume and channels used to advertise the “everywhere” feature. Shifts in the tablet
market share could affect the decision to adopt Practice Fusion.
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Reference
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Simultaneous trend analysis for evaluating outcomes in patient-centred health monitoring
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