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American Demographics, July 2000Databasics
The Cyber File Cabinet
By Joan Raymond
Dot-coms try to shift storage of medical records online.
Dr. Sam Sugar never expected to be the first client to benefit from his
Internet start-up, 4HealthyLife.com. But that's exactly what happened
one Saturday last year when he was admitted to an Illinois emergency
room suffering from severe abdominal pain. Sugar, who had undergone
spinal surgery in the same hospital just five days earlier, was told
that a doctor would have to take a complete medical history-the
department that housed his records was closed for the weekend. But
instead of answering a lengthy collection of queries about recent
illnesses, treatments, and medications, Sugar reached into his wallet
and pulled out his 4HealthyLife ID card. A nurse logged onto the site,
entered Sugar's password, and retrieved his medical records.Sugar is president and founder of 4HealthyLife.com, one of several
Internet newbies trying to generate interest in online storage of
medical data. In recent months these online firms-which include eMD,
Healtheon/Web MD, CapMed, WellMed, HealthMagic and PersonalMD-have
started to package consumers' medical information and house it at a
central, password-protected cyberwarehouse. Connectivity among
hospitals, doctors' offices, insurers, clinics, pharmacies, and
consumers is at the heart of today's health care delivery process. The
firms' goal: to eliminate the need for providers to track down
important data in the fragmented health care system's paper jungle.The firms are convinced that the idea will produce robust interest from
consumers, who have already embraced the Web as a source of health
information. In 1999, 24.8 million Americans searched the Web for
health and medical information, compared with 17.1 million the previous
year, according to Cyber Dialogue, a New York-based Internet market
research firm. Cyber Dialogue expects that figure to rise another 35
percent, to 33.5 million, by the end of this year, and to 52 million by
2003. As a demographic, these "e-health retrievers" are poised to
become a propitious marketing opportunity: 54 percent are women, 41
percent are college graduates, and 51 percent are between 30 and 49
years old.When it comes to marketing health care, dot-coms have already found a
prescription for success. More than $1 billion in venture capital
flowed into health information companies in 1999. What's more, online
health-related ad spending quintupled between 1998 and 1999, according
to Deloitte Research, a division of Deloitte Consulting. By 2002, that
figure is projected to rise to as much as $265 million, thanks to the
popularity of direct-to-consumer advertising. According to a 1998 study
published in Prevention Magazine, 163 million adult Americans have seen
or heard a direct-to-consumer drug ad, and about 75 percent feel the
ads enabled them to become more involved with their own health care and
increased their tendency to challenge their doctors.Although much of the forecast looks rosy, there are some major hurdles.
For example, if medical providers can't-or won't-use online records,
the system won't work. For cyberwarehousers, the good news is that
doctors-once considered the Luddites of cyberspace-are becoming
increasingly Net savvy. In a study of 1,084 physicians released this
past December, the American Medical Association found the proportion of
respondents who use the Internet has nearly doubled from 20 percent in
1997 to 37 percent in 1999. The AMA findings also show that 58 percent
of physicians who use a computer but do not have access to the Web are
planning to acquire Internet tools in the next six months.Other issues are more problematic. Since medical records contain highly
personal data, some patients may balk at posting information online.
Nearly 75 percent of adults recently polled by Cyber Dialogue say they
have concerns that sites would share personal health information with a
third party without permission; nearly 60 percent say they fear someone
hacking into that site. In a Gomez Advisors survey of 12,000 online
consumers, 61 percent say they are hesitant to provide health
information over the Internet, fearing that others would gain
unauthorized access. Of this group, however, nearly 36 percent say they
would be "more likely" to provide data to online sites if they had a
"better understanding of what happens to that information."Then there's the obstacle of who should control the online
information-the patient, his or her physician, or some combination.
Patients may want to handle their own files, but it's questionable
whether physicians and other health care providers will accept a
patient-created medical record as legitimate. Furthermore, health care
is a highly regulated industry; dot-coms will have to abide by its many
rules and regulations. A 1996 law requires the federal Department of
Health and Human Services to issue rules protecting privacy of medical
records transmitted via computers, if Congress didn't pass legislation
within a specified period. The legislators missed the 1999 deadline,
triggering an ongoing rule-making process. "Right now, there are a lot
of roadblocks to the whole idea of medical records online really taking
off, but the e-record is the future," says Dr. David Steele, senior
health care analyst at Gomez Advisors. "People want information from
their doctors or organizations they trust. And it looks like they'll
share their information-their most personal information-with
organizations they trust."Nearly 49 percent of consumers polled by Gomez Advisors say they would
provide anonymous information to a site; nearly 30 percent say they
would provide their name and information about their medical condition.
"The medical record is at the center of the entire patient experience,"
says Graham Pallett, a principal at Deloitte Consulting. "Once people
get over the fear of loss of privacy, you'll see more adopters, the
same way consumers adopted the ATM: 'Nope, don't trust it' to 'How can
I live without it?'"It's still unclear what business model-direct-to-consumer,
business-to-business, or a hybrid of the two-will be the most
successful in attracting clients. HealthMagic, a cyberwarehouser based
in Columbia, South Carolina, has designed a medical record management
tool that allows data to be imported from the internal systems of
hospitals, physician offices, and pharmacies that are clients. The
company's proprietary system, HealthCompass, allows discreet sharing
and distribution of consumer health information between participants,
although consumers have ultimate control over the information, says
Gail McFaddin, the company's chief business development officer.
Current clients include thehealthchannel.com, HealthScreen America,
Managed Care of America, MedeWorks, Traveler's Emergency Network, Rx
Remedy, and Physician.com. Each pay $1.20 per customer per year to
access the system.While HealthMagic makes the B-to-B play, another contender is courting
both the individual consumer and big business. PersonalMD, a
Pleasanton, California-based company, offers consumers free access to
medical records housed at its site, and plans to generate revenue from
advertisers and partnerships with managed care companies and other
health providers. Customers can access their medical records (including
EKGs, X-rays, and reports) via the Web or through PersonalMD's
automated fax-back system. So far, more than 100,000 people have signed
up.PersonalMD has attracted attention through direct-to-consumer marketing
campaigns and business partnerships, as well as an array of co-branding
opportunities. The company recently partnered with Executive Health
Group-which provides physicals to top execs through a network of
physician offices in more than 600 U.S. locations-and has alliances
with two pharmaceutical companies, Drug Emporium and Phar-Mor. It also
is connected with HealthAxis.com, which allows PersonalMD.com members
to review and purchase health insurance from a list of partners.Tom Levin, PersonalMD's president and chief executive, is betting
consumers will want control of their records. "It's no secret that
patient and empowerment are the new buzzwords," he says. "We're not
making any money yet, but we have a business model that makes sense,
and a revenue model that makes sense. People's appetite for taking
control of their health and their health information isn't going to go
away."© 2000 Intertec Publishing - A PRIMEDIA Company --------------7B924E11E44211BE3A020C18--