ePocrates lures physicians with bare-bones PDA apps

ePocrates lures physicians with bare-bones PDA apps

Wireless firm focuses on functionality

Competition is heating up among providers of personal digital assistant (PDA) applications for the healthcare market. In the wake of the HIMSS conference, where the spotlight was predominantly on palm-size devices and the Institute of Medicine medical errors report (HNN 5/3/00), most firms with PDA offerings are concentrating on prescription-ordering applications that enable physicians to electronically communicate with pharmacies and meet formulary requirements. Some 20 companies are developing technology platforms for writing prescriptions online, but studies indicate that physician interest in this application is minimal (see related story, page 1).

This is one reason that ePocrates, a startup based in San Carlos, CA, has taken a different tack. The firm’s flagship application, qRx, is purposely designed to serve only as a tool that provides clinicians with palmtop access to drug information. The privately held company believes this bare-bones approach will separate it from the PDA pack and build its customer base more quickly.

“If you look at healthcare information technology, most companies are working toward robust functionality, but the more robust an application is, the harder it is to use,” said Dr. Richard Fiedotin, vice president of business development and marketing and cofounder of ePocrates. “The normal strategy is to get early adopters who then act as evangelists for products. We wanted to develop our user base first—then we’ll develop more functionality.”

This approach appears to be paying off already. The firm claims more than 80,000 users and says it is adding 500 new users per day, mostly through word of mouth. In fact, according to cofounder Jeffrey Tangney, the firm has spent only $3000 on advertising but has far exceeded internal estimates for user adoption, adding the same number of users per week that it originally targeted per month.

qRx is a pharmaceutical database, edited and maintained by ePocrates’ review board of 15 doctors and 15 pharmacists. Users can download the program onto any device using the Palm operating system, and then access reference information for over 1600 drugs, including adverse reactions, drug-drug interactions, and indication-specific dosing.

Unlike a print reference, the electronic database can be updated daily, so that clinical users always have access to the most up-to-date information. Through the services of AvantGo, the firm offers an AutoUpdate feature that keeps the database current. ePocrates statistics show that users who do not have the AutoUpdate feature manually update the database by hotsyncing about twice a week.

According to Fiedotin, ePocrates chose the Palm platform over Windows CE due to its ease of use. In addition, Fiedotin estimates that Palm’s market share is even larger in the healthcare industry than in the consumer market. Still, compared to Windows CE devices, the Palm lacks certain technical capabilities. Because of its limited storage and memory, for example, ePocrates developers had to custom write the qRx front-end application to take up only 900 KB. However, because the core database is Oracle, ePocrates can develop applications for any operating system in six to eight weeks.

ePocrates has two distribution channels. The software is available free of charge from the ePocrates Web site, and ePocrates partners (such as Eli Lilly) provide selected users with Palms preloaded with the qRx and other applications on a free-lease basis. Users receiving a Palm device through a partnership are considered sponsored users and gain access to additional applications such as qRx Pro, which adds formulary information to the core drug database.

The hardware sponsorship is one way that ePocrates is making money, since it does not charge users for qRx. The firm also relies on sponsored messaging for revenue, including DocAlert (messages that appear on the Palm) and SyncSpot (messages that appear on the computer during the hotsync operation). ePocrates conducts an editorial review of sponsored messages, and the firm does not allow more than three messages to be sent to a user at one time. The receiver can also choose not to read the message. According to Tangney, users respond to around 45% of the DocAlert messages, requesting further information—a much higher rate than expected.

ePocrates hopes to further bolster its bottom line by adding network access fees, transaction fees, and data analysis fees as new product offerings are released. However, these charges will not come out of physicians’ pockets.

“We’re not planning on charging the physician ever,” said Fiedotin. “We intend to release products on the Web to any physician who wants them. But there will be certain situations in which an application will only be available to a sponsored physician or will have to be preloaded on the Palm and will not be available for downloading.”

Of course, the ultimate goal is to convert all users to sponsored users. Only 1% of the current user base is sponsored, but the firm is banking on users wanting access to additional applications that are accessible only by getting an ePocrates Palm. For example, ePocrates Palms have content channels (viewed through a proprietary browser) that provide abstracts of clinical research from prestigious medical journals. The firm has also formed a partnership with MD Consult to provide another content channel.

In addition, ePocrates is developing other applications scheduled for rollout in the third quarter that will extend the functionality of the drug database. These applications will add charge capture, prescription transactions, and patient histories.

The firm plans to create an ASP offering in the next five to seven years and is looking to partner, said Tangney. Its competitors are partnering, too: Allscripts with IDX, iScribe with The Doctors’ Company, MDeverywhere with Beacon Partners, and ePhysician with Kaiser Permanente (HNN 5/31/00, 7/12/00). While ePocrates has announced partnerships with prescription benefits managers (Caremark) and content providers (MD Consult), the company is also looking at vendor partnerships, perhaps even with competitors.