Practice Management Blog

7 Risks of Using Free Practice Management Software

Practice management software has become an indispensable part of most healthcare practices, so choosing an appropriate system is critical for your business. As a practice owner, you might be tempted to opt for free practice management software to cut costs. But hold on—knowing what’s at stake is crucial before you make that decision. Here we unveil the hidden risks of using free practice management software and help you evaluate whether it’s the right move for your long-term success.

In many ways, your software forms the backbone of your practice, allowing you and your team to perform your duties while relying on the information and administrative support of the software. If your backbone were to be compromised, there would be significant implications for your health. The same holds true for your practice. The downsides of choosing the wrong software are serious and can have far-reaching consequences that could affect the management and reputation of your practice.

We all know the saying:

“There’s no such thing as a free lunch.”

But what you may not know is that if you’re not paying for your practice management software, you could be putting your practice at risk. Building quality software takes time and investment, so unless you understand how your software company recovers its costs through revenue, be very careful.

Whether you’re currently using or are considering using free practice management software, there are a few things that you need to think about:

Risk #1 – Security of Sensitive Client Information

Protecting your clients is one of the most important reasons for using practice management software. Healthcare practices are increasingly coming under scrutiny for how they manage and store sensitive client information. You need to have complete peace of mind that your software provider is fully compliant with government regulations, operates ethically and uses the latest in security standards and protocols to keep your client data safe.

In 2021 alone, 45 million healthcare records were exposed or stolen in a record 686 major breaches. And it’s not just hackers or security breaches you have to worry about as a healthcare professional… Some software providers provide their platform at no cost, but have carefully worded fine print conditions that enable them to access and use your practice’s and your clients’ data to generate revenue from third parties. That’s right – your software company might be accessing your clients’ records and selling that data to third parties!

This can be a hidden risk of using free software that most practice owners aren’t even aware of.

When using a free practice management system, reading the fine print is especially important. Make sure that you read the terms and conditions carefully rather than just clicking to accept. Look out for wording that may grant them access to your client data for third-party research and marketing purposes. Often, practices are unaware that by using the software, they have inadvertently given consent to share their clients’ data with a third party for these purposes. If this is the case, then it’s the practice’s responsibility to get consent from their clients… with potentially serious implications if this is not obtained.

For instance, a popular free practice management solution in Australia includes these passages as part of their Privacy Policy;

In one section they state that they will collect: “health information recorded in our system including the treatment you have received, including date, service type, description of the service, which practitioner treated you, test results, current and past medical history, data uploaded by any of your connected health devices, your gender, date of birth or age and marital status”

Then they state that they may use this data to: “to conduct research or compile or analyse statistics”, and also “to access and aggregate data we have collected from you … We may access and aggregate this data for our own use or for use by third parties.”

Although they claim this is deidentified data, it doesn’t take too many variables to match up people – especially using AI tools. In our opinion, this is by far the biggest risk of free practice management software systems.

Risk #2 – Need for Client Consent

If your free clinic management software’s Privacy Policy permits the platform to share client data with third parties for research and marketing purposes, this puts you, the healthcare provider, in a difficult position. As the saying goes:

“If you’re not paying for a product, you ARE the product.”


While most of us know this and accept that we use free products like Google and Facebook in exchange for them allowing advertisers to reach us, this business model is not appropriate when it comes to sensitive client health data. For this reason, it’s essential to ensure the software platform you’re using is not sharing your clients’ data with other companies. If they are, then you may have to get the explicit consent of each client before using the platform to store their data. This would be impractical and likely alarming for the client, which often means it’s just not worth it to use a free platform.

When reading through the Privacy Policy of a free software provider, look for:

  • Data collected – this will list the personal information that the software provider is collecting from both the patient and practitioner including treatments, service types, practitioner details, test results, and medical history.
  • Permitted purposes of use – this outlines how the information can be used by the software provider and may include references to advertising and marketing, medical research by third parties, and promotional messages from other third parties.
  • Patient consent – if the practitioner has given consent to share the data, then the person that was the recipient of the services (your clients) is required to have given consent, which needs to be obtained by the healthcare provider on the client’s behalf.

If you’re using free practice management software, it’s imperative that you check the Privacy Policy as well as the Terms and Conditions. You could be putting your practice at risk if you have not obtained the consent of your clients to share their information with the software. And even more crucially, your clients’ sensitive data could be passed on to third parties without you (or them) knowing it. Consider the impact on your reputation if clients were to find out that you had allowed the use of their sensitive health data without their permission.

With Power Diary, there is no need for any additional consent from clients to use the platform beyond the standard professional disclosures that healthcare providers should already have in place. This means that both practitioners and their clients can enjoy peace of mind, knowing that their sensitive information remains uncompromised and strictly confidential.

Some software providers provide their platform at no cost, but have carefully worded fine print conditions that enable them to access and use your practice’s and your clients’ data to generate revenue from third parties.

Risk #3 – Hidden Business Models

If you’re looking for a free practice management software solution, your choices are very limited. In most cases, the free versions exist to get you to use their software so that you’ll upgrade to a paid membership as your practice becomes limited by the free version’s functionality. These businesses count on you being too inconvenienced to bother changing to a different practice management system. So they convince trusting practice owners to start with the allure of a free plan, knowing that a good proportion will simply upgrade and pay real money – without considering other options.

Another revenue generation strategy used by free practice management software companies is advertising. This can quickly become annoying as you try to run a business but are constantly navigating flashing banner ads, which are only removed if you upgrade to a paid version.

Risk #4 – Viability Risks

Consider the investment needed for practice management software. Developing robust, useful software takes time, consistent effort, and financial investment. And, if the software is to stay relevant and secure in the long run, there will be considerable ongoing costs for developing future enhancements, customer support, security and more. Free practice management software will struggle to keep up with these needs if they are relying on advertiser revenue alone. This makes them vulnerable to going under – leaving you without a software solution and possibly without access to your client records and appointment calendar. It’s also incredibly disruptive to have to change systems suddenly without notice.

Another thing to check is whether the software is well-established. Start-ups in the health niche are being launched every month from all corners of the globe, but very few stick around for the long haul. Most start with a bang thanks to a lot of enthusiasm and a few successful rounds of seed funding, but that soon dries up, and you can be left with a bug-infested, half-baked solution a year or two down the line.

Additionally, check how often updates are posted and how long it takes to get support for any questions or issues you log. This will give you an idea of the customer support and response time to fix any problems. What’s more, check their development roadmap to get a sense of how much development is still happening on the software and if there are any core features that will still be added.

Risk #5 – Limitations on Features and Integrations

Free practice management software solutions will provide core functionality that can be helpful if you’re just starting out. But in a short space of time, those limitations are going to inhibit your ability to grow.

The features that a practice needs will vary, but most can benefit from core functionality, including:

Other useful functions will add to your practice’s productivity, such as:

In addition to offering a very limited selection of features, it’s unlikely that a free practice management system will integrate with other systems that you use in your practice, such as accounting, payment processing, and email providers.

This leads to frustration, re-work, and extra hours spent in front of the computer as you manually move information from one system to another. So, instead of having a solution that makes running your practice simpler, easier, and less stressful, you’ve added another set of tasks to your to-do list and those of your staff members. Integrated back-office systems are essential to prevent errors and inaccuracies from creeping in and unnecessarily wasting everyone’s time.

Often, practices are unaware that by using the software, they have inadvertently given consent to share their clients’ data with a third party for these purposes.

Risk #6 – Hidden Costs

In most cases, a free clinic management system isn’t really free if you need to upgrade to the paid version to get the features you need. Before choosing a free software solution, look at the areas where your usage will be limited and decide whether you will need them in the future.

When you compare the features and benefits, you’ll often find that the costs of upgrading are far higher than they would be with a paid-for solution. Other things to check for before committing to a free software solution are lock-in contracts, minimum terms, and cancellation fees.

Risk #7 – Data Migration Costs

If you chose to use free clinic management software when you were getting your practice set up but have since grown and expanded, you’re probably facing the choice of upgrading or migrating to a different software option. Many of the providers offering free solutions use the lure of a free base package with limited features to encourage sign-ups, but as soon as you need those additional features, there’s a hefty price tag attached. Likewise, the time and financial cost of migrating a practice to a new, more affordable, paid-for service can be daunting. This means you’re stuck in the middle and need to make a decision, which will impact your practice’s efficiency.

Note: Power Diary offers a free, done-for-you data migration service, which is actually very simple, but we still don’t like it that some companies take advantage of perceived difficulties in moving to another practice management software.

Something else to watch for when signing up for free practice management software is whether you can easily export your client information. Are there any costs associated with this? You should be able to do a data dump at the click of a button, but if the free software wants to keep you locked in, they might make it difficult for you to leave by imposing a hefty data retrieval fee. Your business data belongs to you, so you need to be sure that, if you leave, you can easily take your information with you.

Can you afford to choose a free practice management software solution?

It’s completely understandable that, as a practice owner, you’re looking for ways to lower costs within the business. But if you’re going to skimp on your practice management software, it could end up costing you in the long run. We’ve outlined seven serious risks that could compromise your practice and your clients’ data security. From sharing sensitive client information to adding unnecessary manual steps in the administrative process, there is strong evidence that a paid-for solution will benefit your practice and your clients, both now and in the future.

In contrast to the risks of a free solution, a robust, well-established premium practice management software will offer a range of productivity benefits for a health practice designed to boost your bottom line. And you might be surprised to find that the associated costs are much lower than you think. From faster payments, incredible features, and time-saving integrations to an impressive level of flexibility that allows you to configure the software to your needs and scale as your practice grows, the right choice of software can have a profound impact on your practice.

But really the most important reasons to avoid free practice management systems are about the security and data protection you are obligated to provide your clients.

Like in most areas of life, the adage holds true: you usually get what you pay for! So, if you’re serious about your health clinic, don’t take shortcuts on something that is so vital to your operations. Know that a good practice management system will pay for itself in multiples over time, so make the small investment in a system that will set your practice up for success.

Ready to give Power Diary a try?

With our ISO 27001 certification for information security management, we’re among the most secure practice management software platforms available. Plus, we offer a 14-day Free Trial – no credit card required! Try out the system and see what peace of mind can look like today!

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