USA Today: Snags challenge promising health sites

[Steven Luis <luiss@cs.fiu.edu>]

http://www.usatoday.com/life/cyber/tech/cte675.htm

Snags challenge promising health sites
Doctors slow to embrace Web

By Janet Kornblum, USA TODAY

The medical profession is finally catching Web fever.

Consumers for years have clamored to get medical information online: More
than a third of the 54 million Internet users tapped the Web for
health-related information over the past year alone. And 25% were
interested in buying health information online, says Cyber Dialogue, an
Internet market research firm. By 2000, that number will grow to 30
million, the company predicts.

But until now, the backbones of the industry -- doctors, hospitals and
insurance companies -- largely have been absent.

Several companies eyeing the $1.1 trillion Americans spent last year on
health care are lining up to create central clearinghouses that can
attract electronic commerce dollars, as well as hefty advertising from the
likes of big-spending drug companies.

WebMD, which opened in October and plans to go public soon, is positioning
itself as a medical portal. The site intends to cater to professionals and
consumers alike. Like others, the company promises to help medical
professionals save time by centralizing services ranging from research to
paging and voice mail. 

The company has recently formed partnerships with some of the Net's
biggest players in an effort to gain traffic. Earlier this month it agreed
to pay $52 million over the next three years to Web portal Lycos in
exchange for heavy promotion on Lycos and its proposed acquirer, USA
Networks. The company also has promotional deals with America Online's
CompuServe unit and CNN. 

"We believe you have to cross the whole continuum of care to be
successful," says WebMD CEO Jeff Arnold.

Healtheon, started by Netscape Communications founder Jim Clark, has
created a platform to help streamline interactions among the various
participants in the health care profession. Today, those groups often work
on completely different systems, making it difficult to share information.
The company has gone after partnerships with companies in the business,
such as Brown & Toland Physician Services and SmithKline Beecham Clinical
Laboratories. Healtheon, which went public at $8, now trades in the $30s. 

Physicians Online, a site catering strictly to medical doctors, has been
operating for five years and boasts a membership of 175,000 of the roughly
half million doctors in the USA. The company delivers highly targeted
advertising from drug companies and others to doctors. And it is branching
out to consumers, says CEO David Richards.

Drugstore.com, Soma and PlanetRx all are aiming to sell drugs online and
could end up finding partners in the medical sites. AHT Corp. and
Merck-Medco Managed Care recently announced they are teaming up to provide
Net-based prescription-management services to physicians in four major
metropolitan areas.

"The industry is ready for a transformation," says Dr. Charles Saunders,
medical director for Healtheon. 

The need is there, the desire is there, the money is there and the
patients are there. Insurance companies would love to use the Net to
directly reach doctors. Pharmaceutical companies want to do the same.

But even with all those ingredients on the counter, cooking up a
successful recipe for e-commerce on health sites is proving difficult.

"From a pure cost perspective, it's really a no-brainer," says Patrick
Keene, an analyst with Jupiter Communications. "But it's not as simple as
selling books or selling CDs or editorial content."

First, there are structural impediments: Visit any doctor's office, and
you'll find a filing room full of paper. Much of the business of health is
still done with pen or typewriter. And while many practices are
computerized, there is no centralized system for accessing patient
information, says Richards of Physicians Online.

Privacy also is a large concern. Individuals, medical professionals and
governmental regulators need a high degree of assurance that medical
records will be protected online. "It's a very conservative industry,"
says Healtheon's Saunders.

And then, there are the doctors. Not early adapters by nature when it
comes to nonmedical technology, already overtaxed doctors have not flocked
to the Net for professional reasons.

But doctors -- especially younger ones -- increasingly are trying the
Internet. Once they do, they often swear by it. 

Take Dr. Kenneth Andersen, a family practitioner in Iowa, who ventured
online after his patients, one after another, asked about new drugs with
which he was unfamiliar.

"It was so frustrating to me," Andersen says. "I was having people ask for
Viagra six months before it was out." Now Andersen, 42, is a confirmed
online user. But he doesn't have to look far to see that he's the
exception. "My father's a physician. He is 74. He just got a computer two
years ago. He's on it once a month." And then, Andersen says, he's not
looking for medical information.

Doctors online, as well as those in the business, say that doctors will
turn to the Web when they find that it helps.

"Doctors are overextended," says Dr. Kenneth Stroch, a nutritional
specialist in Florham Park, N.J., who has built Web sites for people with
special medical needs. "It would take something compelling to make us
change -- something that would make us less overextended or help us get
better control over decreasing income and increasing overhead."

Internet analyst Tim Bajarin puts it another way. "You know what's going
to drive doctors to this? The ability to be paid quickly."

"Hopefully," adds Gil Irwin, a partner with corporate strategy firm Booz
Allen & Hamilton, sites catering to medical professionals will "give
enough value added so that over time doctors will continue to migrate over
the Web and to electronic connections." Meanwhile, he added, "It's likely
many of these things are going to fail." 


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