It is well known that the Internet has become a widely used resource for healthcare information by consumers and medical professionals. Yet, many industry observers consider healthcare’s use of the Internet to lag 3 to 4 years behind other sectors of the economy, especially in B2B applications.
The past year has brought more than 100-plus new e-health companies, and the recent market turn has dropped their once stratospheric valuations by more than 75 percent. While these companies didn’t do anything to deserve such a large drop in value, they also didn’t do much to earn such a large valuation in the first place!
While the financial values of these businesses have changed, the fundamental business opportunities for healthcare’s use of the Internet remain the same – bringing rational economic forces into play in a highly fragmented, labor and paper intensive business.
In an effort to keep up with this emerging trend, I recently attended an “Inside the eHealth World” conference, sponsored by the Harvard Business School Health Industry Alumni Association. The day included a mixture of presentations and panel discussions, but the interaction with other attendees seeking e-knowledge for use in their real world healthcare jobs was equally interesting.
View from the Top
Tim Zinn, CEO of Zinn Enterprises, provided some interesting insights from the Modern Healthcare Annual Survey of Senior Executives on Healthcare IT regarding future computer system and Internet applications. Every IDN and hospital organization, now having passed the Y2K binge, already has incorporated Internet thinking into every new IT plan. The larger management challenge arises in establishing priorities for 21st century healthcare organizations that are already under financial and operational pressures. Healthcare delivery is currently non-profit at best, and there is precious little time to plan or invest in the future when the wolves are at the door quarterly.
Application Service Providers
Healtheon/WebMD has been investing heavily in Internet-enabled physician services, seeking to leverage the traditional first-mover advantage in e-commerce domains. As the number of e-health sites climbs exponentially, healthcare portals refer to the larger universe of Internet sites whose primary function relates to healthcare business or medical information. In general, Internet (and healthcare) portals may be presently categorized as:
a) E-Business storefronts (amazon.com or PlanetRx.com),
Try applying these categories the next few times you go surfing to see how well they describe the Internet sites you visit.
Electronic Medical Records
Privacy is another hurdle to jump. Rapid and easy access to this information carries the potential for both life-saving information in an emergency and the potential for abuse via snooping or “data-base marketing.”
The whole point of e-Health should be improved care for patients. Improving the economics of supply-chains may be interesting economically, but only if the additional money flows into healthcare delivery – especially for new technologies that are piling up at the doorways of doctors and hospitals waiting for investment dollars to flow.
Doug Orr, president of J&M Group (Ridgefield, Conn.), consults with medical device companies in strategy and business development for emerging growth markets, notably radiology and cardiology. Comments and suggestions can be sent to [email protected].