A Prescription For Change: How New Pricing Models Are Transforming Health IT

November 20, 2013


Joe Sawyer, VP Marketing



Guest author, Joe Sawyer is Vice President of Marketing at CareCloud, where he is responsible for all aspects of the company’s corporate and product marketing and communications, demand generation, and channel development.  Mr. Sawyer comes to CareCloud with more than 15 years of strategic and operational leadership experience focused on disruptive technologies.


On Tuesday, I was fortunate to be part of a panel hosted by Zuora – the global leader in subscription commerce, billing and finance – held alongside Salesforce.com’s epic Dreamforce event in downtown San Francisco.  Moderated by Zuora CMO Brian Bell, with an opening presentation by Zuora product marketing leader Joe Andrews, the panel included executives from Demandbase, Scout Analytics, Sailthru, and InsideView discussing the various ways in which subscription pricing was transforming their industries for the better and driving business growth.


CareCloud has embraced a subscription-based pricing model from the start – simple and transparent enough to be just another page on our corporate web site.  But to really understand what the so-called Subscription Economy means for us, one must first consider the context of our industry.


Welcome To Healthcare


U.S. Healthcare, unfortunately, is known for taking one of the most elemental human interactions – providing care in times of need – and encasing it in confusing regulations, antiquated requirements, and opaque processes.  As a result, the healthcare experience outside the exam room is too often an upsetting experience for doctors and patients alike.


Like a faithful pet, healthcare technology has come to resemble its owner.  It’s a Museum of Natural History for the software industry.  Want to see where client/server dominates?  Look to your left.  Feeling nostalgic for Lotus Notes’ UI?  Right around the corner.  Do you prefer to use a Mac or access your account via Chrome or Safari?  Sorry, never heard of ‘em.  We’ve got some nice PCs and IE for you, though.


Health IT Fastens Its Seatbelts


Into this stasis, enter CareCloud.  We were founded to create beautiful, easy-to-use applications that help medical groups run their businesses more efficiently on a modern, cloud-based platform.  And we brought the Subscription Economy with us. We offer a full suite of solutions, including practice management (PM) and electronic health records (EHRs), which are both sold on a per-doctor subscription basis. Our revenue cycle management (RCM) offering – a technology-enabled service that helps doctors get paid – uses value-based pricing.  We earn a percentage of clients’ collections to ensure both parties are rewarded for success.


The point about CareCloud’s pricing may seem like a footnote, but it’s a core strategic advantage for us.  Right now, the Subscription Economy is wreaking havoc on the giants of our industry:


  • Greenway, a publicly-traded client/server vendor, was bruised by the Street for several quarters as it attempted to transition from its traditional license model and introduce a subscription tier.  Ultimately, Greenway was driven into the arms of Vista, a private equity firm that acquired it for $644 million.


  • AllScripts, another publicly-traded client/server (mostly) Goliath, has experienced even greater turbulence.  It faces a variety of challenges related to its modernization, but its effort to roll out subscription pricing in its most recent quarter resulted in its missing revenue numbers.


Making Pricing A Competitive Advantage


The competitive advantage that the Subscription Economy provides is about a lot more than numbers on a price list.  In CareCloud’s case, pricing helps us to articulate a very different belief system about what doctors – our customers – want and need:


  • A consumer-friendly experience: Doctors are increasingly impatient with the gap between the technology and services they use in their daily lives and what’s gathering dust in their offices.  That extends to pricing models, too.  They subscribe to Netflix, Box … why should health IT be any different?


  • Choice: Our pricing approach lets doctors subscribe only to the solutions they need, when they need them.  Because our solutions are the heart and lungs of practices, we understand if they want to deploy our PM system now, for example, and an EHR next year.  This is exotic thinking in healthcare IT, where leading vendors still require an all-or-nothing purchase dictated by their economics.


Long-term partnership: Subscription models require continually earning a customer’s business.  We welcome that.  Our releases happen almost every three weeks, allowing constant improvements – not to mention fast response to governmental and industry regulations as they arise.  Meanwhile, competitors with “take the money and run” pricing models need to come back and charge for needed upgrades, antagonizing their customers in the process.


Companies can pay lip service to the principles above and still fail to deliver on the subscription model operationally.  Since we were born in the cloud, subscription economics formed the core of our revenue model from day one.  Tools such as Zuora, which we use to manage our order-to-cash process and operationalize innovations to pricing and packaging, have also been critical to success.


Where Subscriptions Go, Innovation Follows


Health IT is still in the early days of the Subscription Economy.  On CareCloud’s part, we’re looking forward to using our flexible pricing model as a tool for making the right innovations available to the most appropriate customers.


This needs to be done in a way that maximizes the value delivered for both sides.  One target may be bridging CareCloud Community – our free portal – with our core apps via a freemium tier that adds value to interactions between patients and doctors in the office.  Another is expanding our partner ecosystem with apps that make third-party capabilities available to doctors via usage-based or incremental subscription pricing.


Whatever pricing innovations CareCloud chooses to introduce, the growth of the Subscription Economy will allow us to maintain a competitive edge when providing medical practices with the tools they need to navigate an increasingly complex environment.



CareCloud is a leading provider of cloud-based practice management, electronic health record (EHR), and medical billing software and services for medical groups. The company’s products are connecting providers to one another – and to their patients – through a fully integrated digital healthcare ecosystem that can be accessed on any browser or device.


CareCloud is helping thousands of physicians increase collections, streamline operations and improve patientcare in over 47 states, and currently manages over $2.5 billion in annualized accounts receivables on behalf of its revenue cycle management clients. To learn more about CareCloud, please visit www.carecloud.com.