Why Fremium May Be the Future Of Healthcare Software

…and why this is a huge opportunity for startups

While the Fremium business model has had some public failures in the news lately, it is likely the future of healthcare software. In years past, healthcare providors were willing to pay for the novelty of having their patients’ data in a digital format. Lots of money was spent on digital image management software and electronic health records. Both of these products offered mediocre customer experiences, but they were novel (and marginally useful), so people paid for them.

As digital healthcare data becomes ubiquitous, fewer people will be willing to pay top dollar for the EMR platform itself; there are simply too many options, many of which are free. But healthcare providors’ needs are nuanced, and complicated, so few of these products perfectly fit the needs of their customers.

Where the big money will be spent in the next decade is solving clinicians’ workflow problems. While the EMR itself will likely need to be free, customers will be happy to spend money on tools that make their clinics more efficient, improve patient outcomes, and (increasingly) improve patient satisfaction.

My recommendation to healthcare software startups is to embrace the idea that software is a commodity, but solutions are invaluable.