Tech's next big thing: Acceptance

Several big names in technology are entering the health care market promising change and revolution, but few have yet to find widespread success.

By Pamela Lewis Dolan — Posted Sept. 3, 2007

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In 1996, Silicon Valley bigwig James H. Clark -- famous to most of America as the co-founder of Netscape, the company that started the Internet boom -- announced he was founding a new company called Healtheon. Stunned by what he saw as the inefficiencies of the health care system as he was treated for and recovered from a motorcycle accident, Clark promised revolutionary change with an Internet health care site that promised to streamline and automate claims processes and reduce costs while making patients better consumers.

Instead, Healtheon became one of the shorthand names for the dot-bomb era. The company reached dizzying financial heights -- at one point, its stock market value was as high as American Airlines' -- until the bottom went out of Internet stocks in 2001.

But Clark's experience hasn't deterred other big tech names from emulating his goal to use technology to revolutionize the health care system. AOL co-founder Steve Case put his goal right in the name of his recent startup: Revolution Health.

Intel, the firm itself and its executives individually, have launched projects hoping to make health delivery more efficient. So has Cisco. So has IBM.

On Aug. 14, The New York Times reported that Microsoft will announce a major consumer health initiative in the fall, while Google will announce one next year. But both companies already have dipped a toe into health care waters through various projects.

Analysts say these tech giants are attracted to health care as a business; being able to tame the health care delivery beast would be a tremendous moneymaker in a $2 trillion-a-year business. But often, as there was with Clark and Healtheon, there is a personal side to their interest as well.

For example, Case started looking at health care after watching his brother navigate the system while fighting brain cancer. Intel co-founder Andy Grove traces his interest in improving the system after surviving prostate cancer and a diagnosis of Parkinson's disease.

So can these technology leaders create a health care revolution? Or will they sink like Healtheon?

The answer is somewhere in the middle, experts say. The new ventures have an advantage over Clark because more physicians, consumers and others in health care are more comfortable with technology, and demanding its use in health care, than they were in the 1990s, they say. The companies and executives are also less definitive about promoting a revolution overnight.

Plus, in every effort, there are lessons that are applied and ideas that survive. Healtheon nearly died as a company, but WebMD, the health portal it bought soon after becoming a public company, is surviving and thriving.

While former technology leaders-turned-celebrities, such as Case and Clark, seem to steal the headlines, experts say the most promising technology is less about glitz and hype and more about results. Experts say that although proven successes in other industries may be helpful, the real key to success is entering the market from the inside, understanding not just what changes need to be made, but how to make them.

"The fact that the customer is a health care customer doesn't make a difference," said Ann Geyer, a partner at Tunitas Group, a Mountain Ranch, Calif., health care information technology consultancy. "A health care company looks like any company."

But companies "need to decide what kind of vendor [they] want to be," she said. "And if they decide it's health care, they have to dedicate themselves to that industry."

"They have to step in the shoes of the health care customer and know what the motivations of that customer are."

Next revolution

One of the latest Jim Clarks is Case, who, in October 2005, launched Revolution Health, his plan to transform health care by making consumers more connected and accountable for their care.

Like Healtheon, Case's solution revolves around Web-based technology that is easy to navigate and that can be accessed from virtually anywhere. But one major change is taking place that could make the difference for Case.

With health care costs continuing to soar, employers are now pushing the idea of consumer-driven health care, making some of Clark's ideas more relevant in today's market.

"Jim Clark was definitely a change agent," said John Osberg, president of Informed Partners Inc., a health care IT consulting firm based in Marietta, Ga.

Osberg said initiatives now being launched by large employers spawned from Healtheon. They were just ideas that most employers weren't ready to embrace in the late 1990s, Osberg said.

The first product of Revolution Health, the Web site, wasn't released until April 2007. Like the original Healtheon and the current WebMD site, contains searchable medical information, though it also allows for personal health records.

Brad Burns, spokesman for Revolution, said that although the site has gotten off to a slow start, the key to its success will revolve around employers embracing it. When employers can engage their employees and make them more accountable for their health, that's when the real revolution will begin, Burns said.

When employers offer incentives to their employees for becoming better consumers, they will demand that their doctors embrace things such as PHRs and electronic medical records, Burns said. Patients will become empowered to be their own agent for change, he said.

It's not surprising that technology companies have been among the leaders in providing employee incentives. One recent example is the Cisco, Intel and Oracle consortium formed to provide pay-for-performance incentives for their employees' physicians.

Osberg said the move has created a lot of buzz because the companies offering the technology intended to change health care are putting their money where the mouths are. While the move wasn't directly intended to sell more technology to doctors, it is an incentive for doctors to use it, as most pay-for-performance measures rely on technology.

While the most visible products released by big companies have been health care portals housed on consumer-based health care sites, such as Revolution and WebMD, Osberg says not to discount the value of the sites or the information that can be found on them, which is continually expanding.

As more patients and doctors begin to look at health care as transportable, he said, treatment will improve, quality will get better and costs will be reduced. And the more information that is available, the better, he said.

That's only one side of health care. The business side of health care stands to gain from technology as well, even if it's in a less visible way. But experts say technology companies need to adapt to a different market than they're used to in order to find success.

Osberg says the technology companies that have been most successful have been ones that enter the health care market through mergers and acquisitions. The combination of deep pockets and focused expertise can go a long way.

Microsoft acknowledges that has been the key to its success. Not only does Microsoft align itself with vendors who use the Microsoft platform to develop things like EMR and billing systems, but Microsoft also has had a successful history of investing in companies that have a good thing going and letting them do their thing, analysts say.

"I think there is certainly a lot of learning from other organizations. Microsoft really likes to leverage existing technologies by joining other solutions with our products," said Microsoft spokeswoman Kelli Bravo.

Lack of experience dealing with the health care system has meant the demise for many well-intended products, she said. To be successful, technology companies need to rely on experts in health care, which many are starting to learn.

Microsoft has a health department staffed by hundreds who spent time on the clinical side of the business, according to Bravo. The IBM Center for Healthcare Management has aligned itself with researchers, scientists and teaching institutions to explore the area of health care.

Osberg thinks that once big technology leaders learn to rely more on the people who know the health care industry, they will be successful. But it's naïve to think there will be an overnight revolution, he said. "The revolution will happen, but it will happen more incrementally," he said.

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Whatever happened to ...?

[download pdf]

Several consumer-based health sites came on the scene in the late 1990s and experienced immediate success. Many of the sites merged, while others went bankrupt as a result of the dot-com bust.

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Notable announcements of tech company expansions

Cisco: Launched the Community for Connected Health in 2007.

Dell: Launched eHealthcare Architecture, a comprehensive health IT framework, in 2006.

Google: Launched search tool Google Health in 2006; created a Health Advisory Committee in 2007 to help develop new health-related products.

IBM: Launched pilot program for an Interoperable Health Information Infrastructure Project in 2005; acquired the consulting group HealthLink in 2005; announced creation of "smart" technology for home health care/telemedicine devices with the University of Florida in July.

Intel: Formed Intel's Digital Health Group in 2005 to explore opportunities for health products.

Microsoft: Launched MSN Health and Fitness Web site in 2005; acquired EMR developer Assyxxi in 2006; acquired Internet search site Medstory Inc. in 2007.

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