The Internet has made it drop-dead simple to book travel, search for restaurants and find a movie date. But when it comes to health services, the web is still in the Dark Ages. Medical records are stashed in disparate file cabinets and consumers spend hours self-diagnosing with inaccurate information.
While tight regulations and even tighter health spending budgets have long discouraged startups from innovating in this market, there are signs the tide is changing.
Practice Fusion, which provides a free electronic medical records system for physicians, announced today it raised $34 million to help doctors bring their most critical information online. Meanwhile, HealthTap introduced an app that lets patients communicate with medical experts in a private and secure setting. The goal of the service is to replace the 25 percent of doctor visits that are strictly for informational purposes, according to the company, and to offer an alternative to the bad advice spread across the Web.
“We’re trying to replace message boards online,” said Ron Gutman, the founder and chief executive officer of HealthTap. The Palo Alto, California-based startup raised $11.5 million in December.
Gutman’s team has spent the past two-plus years creating a database of 12,000 medical experts who are ready, willing and able to answer questions posed online by consumers. In order to build trust with users, answers are rated by other medical experts as part of a scoring system. That was step one.
Now, for $9.99 (or about half the cost of a typical office copayment), a patient can start an online conversation, via the web or a smartphone, with a licensed physician. Have a question about an ingrown toenail? Curious about a skin ailment? There are specialists who can help. HealthTap’s service also allows patients to snap pictures from their phones and upload them into the conversation.
The bulk of the transaction cost gets remitted to the physicians, who have limits as to what they can do online. They can’t prescribe medication or make actual diagnoses, but they are allowed to provide advice and make suggestions. HealthTap partnered with Lloyd’s of London to develop a type of liability insurance that protects doctors from malpractice claims.
As for San Francisco-based Practice Fusion, the mission is to get rid of paper charts, spreadsheets and schedules by providing a free and easy-to-use digital storage system. The five-year-old service is ad-supported and has 150,000 medical providers and 40 million patients using it.
Artis Ventures, which led the fundraising, sees Practice Fusion more like the world’s most popular video-sharing site than an old clunky piece of expensive software.
“Not since YouTube have we seen a company with such spectacular growth, capable of having a profound and lasting positive impact on our daily lives,” said Mike Harden, a partner at Artis, in a statement.