Practice Fusion delivers free, hosted apps for doctors

If you want more proof that software as a service and ad-supported business models are shaking things up, check out Practice Fusion. This week the small company announced the availability of its free, on-demand suite for physician practices.

Practice Fusion CEO Ryan Howard touts the software suite as Google Apps for physicians. It's a radical departure from the established and costly software packages used by physicians to manage their offices and patients records.

Practice Fusion includes practice management, scheduling, patient management (electronic medical records) and e-mail applications. The Web interface takes advantage of Flex 3, Adobe's rich Internet application platform.

Howard is betting that he can make money on free software by connecting advertisers with doctors while they are working via ads. So far Practice Fusion has about 1,000 physicians signed up for the service and about 20 advertisers, including Johnson & Johnson, AstraZeneca LP and Ortho-McNeil-Janssen Pharmaceuticals, Inc.

"The campaigns range between a $50 and $150 CPM, and we are starting to do a significant amount of lead generation, where there is typically an ongoing revenue sharing component," Howard said. Given how difficult it is for a drug salesperson to get a doctor's attention, Howard may have tapped into a rich vein.