EHR provider Practice Fusion cuts 25 percent of its staff

Steven Loeb · February 4, 2016 · Short URL:

The company, which might be eyeing an IPO, did this in order to get to profitability

(Vator will be holding it's second annual Splash Health event at the Kaiser Center in Oakland on February 23rd. Speakers will include Ryan Howard, Founder of Practice Fusion; Ali Diab, CEO of Collective Health; Helmy Eltoukhy, Founder & CEOof Guardant Health; and Rick Altinger, CEO of Glooko. Get your tickets here!)

Company downsizing is often looked at as a bad thing. The optics are never good, of course, since putting people out of work is never a pleasant thing to do. However, it can be a good thing for a company to know enough not to become bigger than it should be. If it doesn't, those cuts will eventually come, and it might mean even more people getting hurt. 

That seems to be the case with Electronic Health Record (EHR) service Practice Fusion, which cut a total of 25 percent of its staff on Wednesday, it has been confirmed to TechCrunch.

In all 74 people were laid off as a result of the cuts, which are said to be across the board, in everything from engineering, product, marketing to customer success departments.

The decision to make the cuts was not because the company was not doing well, but because this was necessary to make the company profitable, CEO Tom Langan, who took over the job from founder Ryan Howard in August of last year, told TechCrunch.

Indeed, Practice Fusion did announce just three weeks ago that it had added over 5,000 new active medical practices and dozens of life science partners in 2015, while also seeing accelerated year-over-year revenue growth of more than 70%.

Founded in 2005, Practice Fusion make it easier for doctors to access patient records, with features that include charting, scheduling, e-prescribing, messaging, lab integration options, and document managing.

It makes its money through partnerships with enterprise clients on treatment  support programs in collaboration with its physicians and by driving more efficient  care coordination through its connectivity services. Practice Fusion also offers clinical data insights and promotional messaging.

The company has raised over $157 million in funding, from investors that have included SharesPost Investment Management, Citizen.VC, Qualcomm Ventures, ARTIS Ventures, Longitude Capital, Band of Angels, Industry Ventures and Kleiner Perkins Caufield & Byers.

This may be a good time for the company to test out the public waters, as digital health companies are having something of a moment right now.

Digital health companies saw 891 deals in 2015, 88 percent more than biotech, according to data from CB Insights. Digital health deals grew 21percent year-over-year, while biotech had just two more deals than in 2014.

Still, biotech saw $600 billion invested in 2015, while digital health saw $5.7 billion, but that is still an awfully big number.

Making itself profitable might be a sign of the company looking to go public, and if Practice Fusion does decide to go through with an IPI, it might be a shot in the arm for an IPO market that is expected to see a down year after things kind of fell off a cliff at the end of last year.

The fourth quarter of last year saw the lowest amount invested since the third quarter of 2014, as the market saw a serious slowdown.

Venture capitalists invested $11.3 billion into 962 deals in the fourth quarter of last year, both down signficantly quarter-to-quarter. Dollars fell 32 percent from $16.6 billion in Q3, and deals fell 16 percent from 1,149. The $11.3 billion is also down 28 percent from the $15.7 million invested in the fourth quarter of 2014. 

VatorNews has reached out to Practice Fusion for confirmation of this report. We will update this story if we learn more. 

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Practice Fusion


Joined Vator on

Practice Fusion provides a free, web-based EMR  system to physicians. With medical charting, scheduling, e-prescribing (eRx), lab integrations, referral letters, Meaningful Use certification, unlimited support and a Personal Health Record for patients, Practice Fusion's EMR the complex needs of today's healthcare providers and disrupts the health IT status quo. Practice Fusion is the fastest growing Electronic Medical Record community in the country with more than 150,000 users serving 40 million patients. The company closed a $23 million Series B round of financing led by Founders Fund in 2011. For more information about Practice Fusion, please visit


Ryan Howard

Joined Vator on

Ryan is the founder, chairman and CEO of Practice Fusion. He founded the company in 2005 and has grown it into the largest physician-patient community in the US.