Online health sites battling for the consumer market

AOL co-founder Steve Case's new company announces its first offerings, while WebMD responds with new services of its own.

By Tyler Chin — Posted Feb. 12, 2007

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Revolution Health and WebMD Health on Jan. 22 announced new online health offerings, setting the stage for a titanic Internet battle.

Two years after he founded Revolution Health Group to "revolutionize" the health care system, AOL co-founder Steve Case has launched Revolution Health, a Web site offering online health information and more than 125 free tools and services to help consumers manage their health.

Among Revolution Health's services are a free online personal health record, symptom checker, and networking forums linking patients and caregivers. A preview version of the site, scheduled to launch formally in mid-April, includes content from the Mayo Clinic, Cleveland Clinic and Harvard University.

The site also is offering, for a little less than $100 a year, premium membership "concierge services" under which users can access telephone-based services. The service would allow users to ask questions of nurses, obtain assistance with health insurance problems, and find and schedule appointments with physicians.

The company is waiving the annual subscription fee through Dec. 31 for users who sign up by mid-April and agree to post ratings of physicians, hospitals and treatments.

Case has invested about $100 million of his own money in Revolution Health Group, which is part of Revolution LLC.The startup company is competing against what analysts call the 800-pound gorilla of the online health world, WebMD Health.

On Jan. 22, WebMD unveiled next-generation services similar to Revolution's. Those include a free online personal health record that consumers previously had to pay for and a symptom checker. Wayne Gatinella, CEO of WebMD Health, said its initiative has been in the works for the past 18 months and is unrelated to Revolution Health's launch.

Other companies offer similar services or compete for smaller niches of Internet health. For example, Medem, which is owned by medical societies, including the AMA, offers personal health records and communications tools between patients and physicians.

The upcoming clash between Revolution Health and WebMD is going to benefit consumers because it will spur other companies to offer free online tools and services for which consumers now pay, said Mark Bard, president of Manhattan Research, a New York-based health care research company. That will enable patients to become better educated about their health. It also will give doctors access to patient information that will help them deliver better care, Bard said.

Several companies have unsuccessfully attempted to entice consumers by offering them free tools, including online personal health records, he acknowledged.

The difference is that the number of American adults using the Internet has grown from 15 million to 120 million over the last decade, Bard said. "It's kind of simple math. If I say I got 10% of the population eight or nine years ago, I may not have enough to build a business on, but if I get 10% of the market today, you're talking about big numbers and you can start to actually justify spending these big budgets to try to get people."

WebMD and Revolution Health say they will make money primarily from online advertising.

Some are skeptical that Revolution Health is going to survive the battle with WebMD.

"In my experience, outsiders coming into health care to revolutionize it without supplementing their core competency with strong health care experts have failed so far," said John Osberg, president of Informed Partners LLC, a Marietta, Ga., health care technology consulting firm.

Osberg noted that most of Revolution's top executives have no experience with health care.

But in an e-mail to American Medical News, a Revolution Health spokeswoman responded that her company executives' "backgrounds and perspectives on consumer wants and needs is exactly the kind of expertise that will make Revolution Health the health care consumer's best ally."

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