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Caradigm Kills eHealth, Partners with Orion

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Today, Caradigm and Orion Health announced their partnership wherein Caradigm will go to market with Orion Health’s HIE solution suite and likewise Orion Health will take  Caradigm’s analytics solution, Caradigm Intelligence Platform (CIP) to market to its existing and future customers. Existing Caradigm customers (~20) who are now on the eHealth platform will be put on life-support and encouraged to make the transition to Orion’s solution in the coming year.

Orion Health has had a long relationship with Microsoft, including acquiring Microsoft’s Amalga HIS solution and partnering with Orion to combine the then Amalga UIS with Orion’s HIE solution. Shortly after this announcement was made though, Microsoft threw in the towel on the clinical market combining its assets with a collection of those from GE which resulted in the NewCo, Caradigm.

As part of the establishment of Caradigm, GE contributed eHealth, its HIE solution suite that was co-developed with Geisinger and Qualibria, a quality management platform developed in conjunction with InterMountain. With the death of eHealth and a product which has yet to see the light of day (Qualibria) its beginning to look like GE brought very little to the Caradigm relationship.

Back to the Orion-Caradigm partnership…

As we have written in the past the core services that HIE vendors offered in the past are quickly being commoditized by such things as Direct secure messaging being embedded in future certified EHRs for stage two meaningful use requirements. With the recent announcement of CommonWell Health Alliance, even query type services may also become commoditized.

Clearly, to stay competitive and relevant, HIE vendors need to move to what we term as HIE 2.0, providing more advanced services that leverage the data flowing through the “pipes” of an HIE to more effectively manage the health of a given community the HIE serves. This is particularly important for enterprise clients ( a market Orion is now targeting) and can also assist public HIEs (Orion’s traditional market) in providing value-add services that may help them reach nirvana (sustainability). With CIP, Orion can provide a more compelling offering. The big challenge here for Orion will be in effectively pricing and deploying CIP, (Amalga UIS was notoriously expensive and difficult to deploy. Caradigm has rebranded Amalga Version 3, a much improved version architecturally, as CIP to distance themselves from the stigma of the Amalga brand).

While the relationship provides value to Orion, it may provide even greater value to Caradigm, a company that has stumbled to gain traction in the market. Orion provides a ready channel to market via Orion’s existing broad HIE customer base – one of the world’s largest. Orion also provides Caradigm an effective exit from directly participating in the HIE market with a solution that frankly was not up to the task. The announcement also claims that Orion has agreed to develop applications for the CIP which contributes to Caradigm’s goal of being perceived as a platform play in the market. What those apps may be is still an open question. Based on the language in the PR, it looks like not a lot of thought has gone into that aspect of the relationship yet.

Now we’ll just have to wait and see how this plays out in the market.

What to watch:

  1. Joint customer wins – who and where.
  2. How many existing eHealth clients transition directly to Orion or jettison for another HIE vendor entirely.
  3. Apps that Orion builds for CIP.
  4. Existing Orion clients that purchase CIP and whether or not we see accelerated growth in such purchases or an initial surge followed by stagnation.
Both companies have something to gain in this relationship and will strive to make it work. But such partnerships can be extremely difficult to manage in the field. It will require close collaboration, a significant degree of trust and a willingness to give. Despite its large size and massive parents (MSFT & GE), Caradigm will need to give more to make this truly work.
Editor’s Note: A more in-depth deep dive into this partnership and its implications will be a part of our April Monthly Update that will be distributed to Chilmark Advisory Service clients.

 

 

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Assessment: Ingenix Makes HIE Move Acquiring Axolotl

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Last week, Ingenix announced that it would be acquiring Axolotl.  Probably no one was happier than the folks at Gilat Satellite Networks who had invested $4.5M in Axolotl over ten years ago, had written off that investment during the dot-com bust in 2001 and now is looking at getting some $24M in cash plus another $3M by year’s end.  Gilat receiving $27M from the sale of Axolotl (we estimate Axolotl’s sales in FY09 to be about $15-18M) signals only one thing: Ingenix paid a kingly ransom to acquire Axolotl, in excess of 8x 2009 sales.

This begs the question: Why did Ingenix pay so much for such a small HIT vendor?

Having interviewed a couple of Axolotl competitors about this deal and completing a briefing call this morning with Ingenix executives Bill Miller, EVP for Provider Solutions and Art Glasgow, CTO along with our broader analysis of the market, vis a vie the forthcoming HIE Market Report (yes, its coming, really it is), following are some thoughts and perspectives.

Ingenix is a company that grows by acquisition having acquired some 50+ companies since 1996. Since the beginning of 2010, the company has made 5 acquisitions already and based on the call with Ingenix today, there will be more. Miller stated on the call that Ingenix has primarily served the payer market but sees a convergence of administrative and clinical processes, thus has been making targeted acquisitions in the provider HIT market (e.g., CareTracker, a PM/EMR solution, Picis, an EMR for ED, QualityMetric for outcomes measurement) and now Axolotl. Miller inferred in the call that part of its provider acquisition strategy is to acquire companies with strong brand recognition in the provider market. Clearly, Axolotl has that in the HIE market, particularly among publicly-led HIEs, or RHIOs.

As one competitor put it: “Ingenix bought into the market.” And as another one stated, (Axolotl’s top competitor): “We are very happy.” Ingenix paid heavily for brand and for an established presence in the market (Axolotl has roughly 250 hospitals using their Elysium HIE platform and currently support four state-wide HIEs). As an independent company similar to Axolotl, the second vendor must be seeing the potential for a very large pay-out should they be acquired, thus not too surprising that they would be happy with this deal. But that second vendor may also be developing a slightly nervous twitch as very large players with deep pockets such as Carlyle Group (they own Carefx), GE, IBM, McKesson (owners of RelayHealth), Microsoft, Thomson-Reuters (partner with Care Evolution) and now Ingenix enter the HIE market. Let’s not count out the EHR vendors such as Cerner, Epic, and others who are also developing their own HIE solutions. The writing is on the wall: In five years time there will no longer be small, independent HIE vendors.  Those independent HIE vendors that survive will be a division of a far larger company.

During our call with Ingenix, Glasgow stated that Ingenix’s core competency is analytics and this is the focus of internal R&D expenditures. For all other HIT application areas, Ingenix would rather make an acquisition than organically build. Coupling Ingenix’s analytical capabilities with Axolotl’s Elysium platform creates some intriguing possibilities both from the perspective of Ingenix selling more of its portfolio in a larger more comprehensive HIE platform sale, but also creating the possibility for the HIE organization to create a sustainable model for future viability as articulated in an Ingenix White Paper (caution PDF). With forthcoming changes in healthcare via reform, new payment models etc., analytics will become an increasingly critical need for providers and HIE vendors are ideally positioned to provide such capabilities. Yet based on our research, virtually all HIE vendors have weak analytics capabilities. Microsoft is one of those at the forefront in this area with their Amalga platform, but their overall HIE solution is still a work in progress.

Glasgow also went on to state that Ingenix sees the HIE market moving to a PaaS model and Ingenix will continue to support Axolotl’s current development efforts to open up its APIs to third party vendors. The move to PaaS in the HIE market is still a nascent trend but one we believe will stick. Chilmark is planning to do a deeper dive on the subject in a future report. In the near-term we will be talking to Medicity later this week getting a deep-dive briefing on their forthcoming iNexx platform, which is at the forefront of among HIE vendors in creating a PaaS for the HIE market.

Some Challenges:
With any acquisition, there are always challenges, from alignment of staff (and even rationalization), to setting priorities for future R&D, to soothing customer and prospect fears as to what the acquisition means to their current or future investment. Challenges we foresee include:

Recouping their investment. Ingenix paid dearly for Axolotl, a company with a strong brand in the market, but also a company with an older platform that has proven difficult for some to implement and maintain. Axolotl clearly recognizes that Elysium needed to be re-architected and is well down the development path to address this need. Thus, Ingenix needs to continue to invest in Axolotl beyond the purchase price to insure Elysium transitions to a modern platform to support a PaaS model. This is not easy work, nor is it inexpensive and it is likely that there will be changes to Axolotl’s pricing structure to compensate for this investment.

Quelling market fears, part one. Ingenix has a mixed history with providers, having been sued by the NY Attorney General, and dragged before Congress last year for reportedly providing data to payers that shortchanged patients and providers. Ingenix has tried to come clean on the issue, but it has left a bad taste in the mouth of many. Now that Ingenix is jumping into  the very public arena of HIE, they will need to convince state agencies, providers and consumers that their intentions are noble, that data will be used to help improve care and ultimately outcomes while insuring that personal health information will remain secure and private.

Quelling market fears, part two. An acquisition nearly always generates some consternation on the part of existing customers and future prospects, with the number one issue being: Is their investment safe (i.e., the acquirer will not sunset the product and continue to invest in R&D)? With over 50 acquisitions in 14 years, Chilmark assumes that Ingenix is pretty savvy at how to acquire a company, leverage the assets, keep customers happy and build from there. But against that backdrop, Ingenix must address a market that has a lot of concerns over vendor/product viability. It is incumbent on Ingenix to educate the market that it indeed has a clear strategy for Axolotl and its Elysium platform. That the strategy aligns with market needs. that it includes continued support (R&D $$$ to modernize Elysium) and that they will continue to offer the level of support (if not better) that customers have come to expect from Axolotl.

Final Assessment:
Ingenix’s strategy for the HIE market is in very close alignment with what Chilmark Research is seeing as well: The move from simple messaging, i.e., pushing lab data around, to higher order capabilities such as analytics and the move to a PaaS model for HIEs.  While these are clearly the future trends for HIEs, the timing as to when these trends take hold is still very much in question.  The HIE market remains convoluted, messy and difficult, if not near impossible to make sense of.  Adding to the issue of complexity is market maturity wherein many buyers are often just looking for the most basic of capabilities.  Even Axolotl recognizes this releasing Elysium Express a few weeks back to address this basic market need.  Hopefully, Ingenix is a very patient company and fully understands the nature of the market it has just paid a princely sum to enter as it may be sometime before they recoup their investment in Axolotl.

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Where is the Consumer in Vendors’ HIE Solutions?

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In Monday’s post, Chilmark reflected upon a piece that Peter Hudson, co-founder of Healthagen, the developers of mHealth app iTriage wrote for mobihealthnews. In that article, Peter talked about the utility of an mHealth-based PHR (iTriage recently launched such capabilities), but in our post, we countered that today, it is still far too difficult for a consumer to pull together their personal health information (PHI) to create a truly longitudinal record. This will likely stunt the efforts of companies such as Healthagen who are trying to offer consumers a PHR – the hassle factor is still far too great to overcome.

Now we will look at the red hot space of Health Information Exchanges (HIEs).

As local, regional or even statewide aggregators and distributors of health data to facilitate care coordination, HIEs have the potential to play a pivotal role in helping a consumer create and manage their PHI. Now that does not mean that the HIE has to offer the consumer a PHR per se, but what an HIE may be able to do is offer the consumer an ability to have a portal view into their PHI that resides within the context of a given HIE. Better yet, why not have as a condition of receiving some of that federal largesse of $564M for state HIE programs that these HIEs support “Blue Button” functionality allowing a consumer to readily download or export their PHI to wherever the consumer desires.

Ah, but we digress.

The purpose of this post is to extract a couple of data points from our forthcoming HIE report as they pertain to consumer engagement. Unfortunately, it is not a pretty picture.

As part of our market survey of twenty HIE vendors, we asked them a number of questions with regards to what consumer-centric capabilities did their HIE solution support. Fully eighty percent of those interviewed had either modest (15%) or weak (65%) consumer offerings.

The following table provides a brief snapshot of those HIE vendors that have what Chilmark considers strong consumer engagement tools. Two of those vendors, Kryptiq and MEDSEEK are somewhat difficult to classify as an HIE in the traditional sense, thus you will not find them running under the covers at your local RHIO. Microsoft is still new to the HIE market with one HIE live in Milwaukee and another in D.C.. While Microsoft’s platform offers these HIEs the potential for bi-directional communication with HealthVault, that capability, to the best of our knowledge has not been tested at either of these HIEs. Also, it is important to note that the Microsoft HIE solution offers little with regards to support for transactional processes (appointment scheduling, Rx refill, eVisit, etc.). RelayHealth is the remaining HIE vendor that actually has some of the more robust consumer tools in the market (they received fairly high ratings in our previous iPHR Market Report), so this is not too much of a surprise.

Now it is not necessarily the fault of laggard HIE vendors that today, their solutions offer weak consumer tools. Frankly, the market has not asked for them. Even as recently as last year when the various HIT policy committees were meeting in Washington to set policies for the HITECH Act and the funding to come, the committee on HIEs, in one of their seminal meetings, completely ignored the consumer role in an HIE. Shameful.

But this will change in due time. MEDecision and Carefx are building out their consumer-facing capabilities and we are sure others will add consumer functionality in time, most likely via partnerships or an occassional acquisition as market is moving too fast for an internal build-out. in the meantime, those vendors that have this capability bring to market competitive differentiation.

While this is all well and good, another development is also taking place, NHIN Direct – something that Microsoft’s chief architect, Sean Nolan mentioned in his comment to our Monday post. What role might a secure, lightweight communication system play within the broader context of HIEs, aggregated PHI, consumer access and potentially control of their PHI? A lot of questions to ponder that we will be looking into further over the next few days

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Savvy Move, MSFT Acquires Sentillion

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Today, Microsoft announced that it will be acquiring the healthcare IT security software firm Sentillion. This is Microsoft Health Solutions Group’s biggest acquisition to date and will add critical security features to their clinician centric solution Amalga UIS.

Chilmark Research sees this as a very savvy acquisition that will further extend the capabilities and thus market opportunities for Microsoft in the healthcare sector. For example, in the hot market for Health Information Exchanges (HIE), managing security access across multiple entities within a given region is challenging – the Sentillion suite of security solutions will slot into this market need quite readily. For Sentillion, this is also a good move has it provides them to backing, resources and distribution channel to truly take their solution suite global far faster than if they attempted to do it organically.

Mr. HIStalk had the opportunity to to interview both MSFT and Sentillion and has a good summary write-up on the acquisition as well.

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The Mobile App Goldrush

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iphone-hedLast week the Washington Post published an article on the fervor surrounding the iPhone and the slew of independent developers that are making boat-loads of money by creating apps for the iPhone.  As the article correctly points out, Apple’s goal is not so much to make money from selling these apps, but to become the de facto platform for all things mobile.

Apple won’t say how much money the App Store is taking in, nor will it say how many of the 300 million downloads were free apps and how many cost money (most apps are free; the others cost anywhere from a buck to $10). Apple gets a 30 percent cut of revenue generated by apps. But for Apple right now the money isn’t the point. The big thing is the race to become the dominant mobile-computing platform, the way IBM-standard PCs running Microsoft operating software — first DOS and then Windows — came to dominate personal computing in the 1980s and early 1990s.

Apple has a monsterous head-start on the competition.

Today, there are over 10,000 apps for the iPhone, nearly 450 just for health & wellness.  Taking a look at would be competitor Google and its Android platform and you’ll find a paltry 35 apps total, none by the way are targeting health & wellness.  Palm, which once had the physician market virtually to itself is all but dead.  Yes, Palm is releasing a new OS any day now but they have lost so much momentum and market cache that they will find it impossible to come back as no independent developer in their right mind will bother to develop an app for a dying platform.

What about Blackberry, Nokia (Symbian) and Windows Mobile?

These are three big players in the mobile market who will not give up easily and each has some pretty substantial resources to back them up.  Problem is, if you add Appple and Google to the mix, you end up with 5 potentially viable mobile platforms.  Can and will the market support that many? Unlikely.

In time there will be a shake-out that will result in at most, 3 mobile platforms, but that is at least 3 years down the road, unless of course there is an acquisition (e.g., Microsoft acquiring Blackberry).

So what is a developer to do?  Here is our 5 steps to mobile platform success:

  1. Talk to your customers and talk to your customers’ customers to understand how they are using mobile technology today and what mobile apps/platforms they are using today.
  2. Pay particular attention to those customers who are often away from their desks/offices for extended periods of time. Understand how they access information on the go and what information is most difficult, but critical to gain access to.
  3. Build platform flexibility into the app.  Assume your app will eventually be available on at least 2 if not 3 separate mobile platforms.  In the US, we recommend established developers to target the iPhone first. If you are new to the market, developing for Android first will provide early and important market visibility.  If you have a large presence outside the US, Nokia’s Symbian wil be on your radar.
  4. First and foremost, focus on simplicity of engaging/using the app.  Despite all their features, mobile devices have their limitations, thus the app must be extremely easy to use requiring a minimum number of clicks to perform any task.  Beyond simplicity, think radical and leverage the unique capabilities of mobile devices e.g., accelerometers, GPS, barcode scanners, etc.
  5. Iterate, iterate iterate.  Once you launch the mobile app, do not expect to just sit back and let the $$$ roll-in.  Get the product out into the market quickly and continually track usage patterns.  Update product on a frequent basis to reflect those usage patterns, creating added value. Mobile apps are extremely viral, iteration is key to a viral market infection.
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Health 2.0 Day One

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8:15am, Intro done, Matthew, founder with Indu of the Health 2.0 conference announce all the countries and cross-section of companies represented. Quite amazing just how many people are here, nearly 900, considering the first Health 2.0 event was just over a year ago.

Some very very general comments from Matthew on what Health 2.0 is. What he has added to his famous bubble chart is transactions and data – basically how large data holders (e.g., Aetna or Kaiser-Permanente) are now getting into the Health 2.0 space with their massive data stores contributing to the continuing evolution in this market.

A spokesperson from PR firm, Edelman, also got up on stage to announce the release of their recent consumer study, The Health Engagement Barometer Dimitriy wrote a nice overview of the report.

9:30am, Clay Shirky keynote. He is on a book tour of sorts with his recent publication of Here Comes Everyody”, transposing his findings to the healthcare industry. Shirky states that there is already a NHIN, if not an international HIN being driven by consumers who are actively sharing and collaborating around health issues. Trust is not an aspect of technology, but one of a personal human nature. Where there is trust, information will flow. (Excellent point, so much effort is spent on the issue of privacy and security with vendors all seeking technological solutions to the problem. Unfortunately, they are putting their efforts into the wrong thing. Are you listening Microsoft, Google, payers and employers?)

Patients outnumber physicians 100:1, it will be patients that will be at the heart of healthcare change. Patient care is now beginning to occur among patients themselves rather than with physicians in small, focused organized groups around specific diseases.

What Shirky plans to follow in the future is how institutions (gave the example of orthopedic company, Zimmer) will try to thwart the growth in Health 2.0/patient communities due to perceived threat from consumers (whether real or imagine is another story). Shirky sees these efforts as quixotic.

9:00am, David Kibbe’s motorcycle tour video is now showing. Kibbe basically went across the country mostly interviewing Health 2.0 vendors beginning in my home town of Boston speaking to AmericanWell and PatientsLikeMe. Next stop was Dr. Jay Parkinson’s start-up, Hello Health with some discussion on the IT platform they are using with their customers. Adopted a facebook-type model, a doctor with 1000 friends, who happen to be his/her customers. Kibbe also dropped into a retail, Minute Clinic in TN. (Kibbe seems to ask all those he interviews: “Are you Health 2.0?” – getting a bit annoying). Not much from Minute Clinic. Road-trip stopped short when Kibbe’s motorcycle broke-down in TN. Flew to CA to interview Google Health, Healthline (Healthline CEO is lots of consolidation coming and big players jumping in). The Healthline CEO looked like the best interview, too bad it was cut so short.

10:15am Panel Session – Consumer Aggregators With the exception of Dossia, all the big boys are here: Aetna, Google, Microsoft, WebMD and surprise, Yahoo. Haven’t heard much from Yahoo in a couple of years as it pertains to health, will be interesting to get their comments. Aetna spokesperson announced the partnership with HealthVault for data portability. Microsoft spoke of their growing platform rattling off the statistics of number of devices, number of apps, etc., but no numbers as to how many users! Google talked about how they are focused on just making it easy for consumers to access and use their record data. Yahoo Healt spokesperson s brand new to the position and is now building a new team. Announced a partnership with Waterfront Media (content) and Healthgrades (physician search).

Demos by panelists:
WebMD used the Verizon HealthZone. Claims data driven PHR with HRA and risk factor analysis (what WebMD calls Health Quotient). WebMD providing structured health content and will even provide health coaching if client requests it. Phil Marshall, VP Product Development at WebMD did the demo.

Microsoft had Kaiser-Permanente give the demo. KP showed how a KP MyHealthManager customer/user would move their records to HealthVault. Using HL7 CCD for transmitting the data between the two sites. KP has put together a fairly easy process (reminds me of the BIDMC/Google Health process) to move the records. Peter Neupert got up to give the HealthVault portion of the demo – he was unable to log-in to HealthVault to conduct the demo – OUCH!

Note: After reading this post, Sean Nolan, Chief Architect at HealthVault, put together a quick post on what Peter was trying to demo up there on stage.  Not quite the same as a real life demo, but Sean is able to show and describe the steps of importing records from the Kaiser system into HealthVault.

Next up was Aetna. Unlike Neupert, he quickly logged in to the Aetna PHR. Thy now have ten active health trackers in the PHR, online coaching and of course, the Care-Engine rules engine for alerting consumers on risks. They put out over 1 million alerts to PHR members/qtr. Healthline Looking at having all 17M covered members on the PHR by the end of 2009. Currently have 6M members on the PHR and forecast 7M by end of year.

10:50am, Here comes Google: Did a demo on downloading medications from a pharmacy into a consumers Google Health account. Geez, this is boring – retty basic, unimpressive demo. Hell, they had this capability when they first rolled out Google Health, would think they would actually show something new and interesting. Another demo glitch. Pharmacy partner doing the demo got hung-up had to go into the depths of the app to make it work, something no consumer would take on. Another poor demo.

Microsoft is given another chance, again demo fails. DOUBLE OUCH!

Last up, Yahoo Health. Kerry Hicks, CEO of HealthGrades is intro’ing the demo and Michael Yang of Yahoo is not so much giving a demo, but an overview of the interface/GUI of Yahoo Health. Complete redesign beginning with physician search (embedded HealthGrades app/service). Claims Yahoo is good at data mash-ups, particularly for rating and reviewing and will apply that expertise to Yahoo Health. Will also leverage Yahoo Groups, have gateways between the various groups and Yahoo Health.

Q&A with Panel:

Aetna spends $60M a year answering physician calls regarding member eligibility. They see big savings via th PHR for members that will alleviate, if not eliminate these calls. Microsoft is not worried about the trst issue, like us here at Chilmark Research, believes that what really needs to be done is create value. Yahoo has no intention of getting into the PHR market. See themselves as a possible “swing vote” to bring visibility to the concpet without any vested interests to support one PHR or platform or another. See themselves as providing a rich environment for widgets, and add-on services to these other consumer aggregators.

Couple of more data points from Aetna:

  • Each 1% of members that move to having their EOB delivered electronically vs. snail mail represents a savings of $500K/yr.
  • Each 1% of physicians that they can get to move to self-checking eligibility of customers online vs calling in saves Aetna $600k/yr.

No wonder they are investing heavily in eTools.

Kolodner, head of Dept of Health & Human Services ONC took the stage to provide his perspective on what was said by the consumer aggregators. Not sure if it is me or not, but why do so many govt. bureaucrats give such boring presentations. Kolodner did not use any slides, but oh it was hard to concentrate on what he was trying to say. In th end what I got out of it was, let’s not move to fast, let’s focus on interoperability, let’s insure that privacy and security are preserved. Looks to me like he was defending CCHIT and its consumer-facing initiatives.

1:00pm, Search in the Long Tail Panel Session: Matthew Holt has always been a big fan of health search tools for consumers and has brought together all the big, health-centric search companies, Healthline, Kosmix/RightHealth, Healia (which Meredith acquired), and Organized Wisdom. Not much new said in opening statements, typical positioning statements, boring.

Demos:

Healthline began, really hard to see much here that would attract me to the site. Actually, would probably avoid as it presented a barrage of “stuff” and I always look for nice clean interfaces. Guess Google has spoiled me.

Healia demo, by founder Tom Eng talked about the communities feature they brought to market this past summer. Clearly looking to tap the growing disease community market. Partnering with American Diabetes Assoc for a diabetes centric community.

RightHealth (Kosmix) was next. One of the better demos and it appears that the broader public agrees as RightHealth claims to be the second most visited site after WebMD with 8.5M unique monthly visitors. Quick check shows something different. Yes, RightHealth has good presence, but in Sept. 08 it was only about 6M and WebMD is more than double that.

Last was Organized Wisdom. A lot of buzz, but leaves me wondering, Where’s the Beef? Of what I heard so far from these search providers, this company is probably in the most precarious position going forward. They did announce that they will be offering a physician rating/search service within Organized Wisdom. Now why do that instead of partner?

Healthline will also be looking to provide a physician search service. RightHealth will not, they will look to other, best-in-breed companies, to provide this service. Healia as no intention at this time to go down the physician search and rating path.

1:45pm Social Communities: Great line-up here with the CEO of Sermo, CEO of MedHelp, GM of HealthCentral and CEO of PatientsLikeMe (PLM). Sermo last year was at 40K physicians, they are now at 90K physicians. PLM is seeing very strong growth for their most recently introduced communities to address mood disorders (We had concerns as to whether or not PLM would scale effectively and mood disorders would be a real test, if not one of the hardest. Mood disorders are terribly challenging and terribly personal and there is a social stigma. PLM’s ability to overcome these challenges is true testament to the value they are delivering.) PLM is focused on addressing what treatments work in the real world for real consumers. See themselves becoming a key arbitrator of future pricing based on real efficacy.

Comments from HealthCentral and MedHelp have been pretty simplistic in comparison to comments by PLM and Sermo.

Demo-time:

Sermo leads off showing the power of community intelligence. Big question that they had to face was will physicians trust the site. Time and agin they have been able to demonstrate that the system does work. This is contributing to the viral-like growth of Sermo. Which makes me wonder, just how many of those docs on their site are from the US vs rest of world? With some 600-700K physicians just in the US, a lot of upside community growht for Sermo. BTW, that demo, nothing special but the site does look clean and easy to navigate.

Ben of PLM was next presenting data from the ALS community at PLM looking at efficacy of lithium. Was prompted by a research study in Italy that p[ointed to some possible positive impact. In the past nine months, 300 PLM ALS community members have been using lithium (this is not some sort of formal clinical trial, it’s just happening) and the data is showing no measurable imporvement. Ben went on to say that the US is getting ready to launch mulit-million $$$ clinical trials program to look at lithium for ALS. His argument is that PLM already has the data, now, totally circumventing the clinical trial process. Could this story force us to rethink how some clinical trials should be performed in the future?

MedHelp gave a demo/story of a Victoria Secrets’ bra. Seems that VS introduced a new bra and within a month, MedHelp community members began posting about a rash they were getting from wearing the bra. Problem eventually traced to a new manufacturer in China using material that would cause an allergic reaction for some. Led to VS changing the manufacturing process and sure enough, posts on MedHelp began to subside.

HealthCentral is now up. Gave several demonstrations/page views of different communities at HealthCentral. Nothing terribly new here that I have not seen on any number of health communities. But taking a look at traffic numbers, does appear that HealthCentral is doing ok and is growing in number of uniques. Took a quick drive-by of the site, much different than the other three on the panel, coming across more as a competitor to WebMD or Waterfront Media.

4:30pm Due to low battery have not been able to provide update. But coming back now for wrap-up.

Some quick impressions so far:

  • Nothing terribly new being presented. Good event for those new to this market space, but for someone such as myself, well…
  • Great networking event. While content of presentations may be thin, the audience is top notch. Lots of great contacts being made.
  • One of the big contributors to the size of the event is all the new players. This is becoming a VERY BIG DEAL. Plenty of representatives from the healthcare sector old guard (e.g., payers, pharmaceutical companies and some of the very large providers). Lot of large institutional entities here looking more closely at this market sector.

Has Health 2.0 hit the mainstream?

Sure is beginning to look like it. Then again, we’ll have to see what unfolds over the next 6-12 months as there is a tremendous amount of overlap in solutions being shown here today. Clearly, not all will make it. Actually, most won’t. Challenge for investors is figuring out which one(s) have a truly distinctive product and a good model/strategy to take it to market. Not that much different from any other investment evaluation, with the “minor” exception that one must factor in a financial crisis.

And that financial crisis will put a major crimp in any Health 2.0 company looking to go direct to consumer with a subscription model. This was a challenge before the financial crisis, now it is simply untenable.

Same goes for those looking at an ad-supported model. Online advertising is starting to see some contraction and the healthcare sector will not be immune. And those companies looking to offer their sponsors some type of completely new advertising approach, don’t count on a receptive audience. When the purse strings start to be pulled, new (i.e., risky) ideas are pulled.

Going forward, Health 2.0 companies will need these large institutional entities for sponsorship via adopting their solutions. Therefore, Health 2.0 companies will need to go back to the drawing board and look more closely at the value proposition they can provide these sponsors. As you go back to those drawing boards, think one of two things:

1. How can I save them money?

2. How can I make them money?

Word to the wise: Number 1 is always a much harder sell than number 2.

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