Epocrates–in time for EHR madness?
Epocrates made available a first-phase version of its electronic health record this month. The company, which specializes in developing point-of-care mobile reference applications, is aiming the new product at practices of ten or fewer physicians.
The move to the EHR is a bit of a stretch for Epocrates (NASDOQ: EPOC), which went public in February 2011 and today has a market cap of $255 million. Last year’s annual report shows Epocrates’ investment in its EHR was $8 million. For the past two quarters, Epocrates reported a decline in net income compared with the previous year. The company cites costs related to the research and development of the EHR as a reason for the loss. Now that the EHR has been launched, the company hopes to earn back its investment by charging a monthly subscription for the service.
The version of the EHR we saw wasn’t iPhone based–yet. It was SaaS -based, had a lovely user interface and will be competing with Practice Fusion, athenahealth, and many more in the SaaS EHR space. The EHR incorporates patient encounter notes, electronic lab integration, ePrescribing and access to Epocrates’ drug database. Epocrates says it is going to extend the EHR to Android smartphone devices and the iPad tablet. It will also be modified to meet guidelines for meaningful use. For example, a patient portal will be added to the EHR to support a collaborative effort between doctors and patients to manage health.
Epocrates’ past success has come from its free offering of a native mobile application, a robust drug database for iPhones, Android smartphones, Windows Mobile phones and BlackBerry and Palm (now WebOS) devices. The Epocrates Rx drug reference app allows access to thousands of drug monographs, formularies, and provides a lookup of drug-drug interactions and pill identifications. So far, earnings have come largely from pharmaceutical advertising, which companies do through “clinical alerts” on mobile applications. Premium subscription services also contribute to revenues. Epocrates says that 45 percent of United States physicians use an Epocrates product, and the company boasts of being the number one most used medical app among doctors.
With about 250 EHRs already on the market, including several iPad applications, Epocrates is coming somewhat late to the game. It’ll also have to persuade its many physician customers who know the company as one that’s provided a free reference service, that they’re the right company to provide them with an affordable EHR–and it is cheaper than many, about $360 a month, with an introductory price of $179. Whether success in one application translates into success in another with a different business model isn’t quite a bet on the future of the company, but it will certainly be front of mind for Epocrates’ management–and now its shareholders too.