June 12, 2000
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Health Providers Check Online Pulse
CorSolutions, Healtheon form partnerships for web market
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hile the Internet has created new opportunities for health-care companies, the industry still lags behind others in its pursuit of online consumers. Several companies hope to reverse this trend.CorSolutions Inc., a provider of disease-management health plans with about 100 contracts and 8,500 referring physicians, has partnered with a client, Humana Inc. As a result, Humana's customers will be able to access CorSolutions' disease-management services online in the next few weeks.
CorSolutions, a subsidiary of Ralin Medical Inc., is also partnering with consumer health-care portal MediConsult.com Ltd. to test consumer demand for online disease-management services. The MediConsult.com service will be available in the third quarter.
Meanwhile, Healtheon/WebMD Corp., a leading Internet health-care company, two weeks ago partnered with SimplyHealth.com, a provider of health-insurance services to individuals and small businesses. SimplyHealth.com offers insurance options, rate approvals, applications, and wellness and lifestyle tools via the Internet. Healtheon/Web MD says it has links to approximately 850,000 physicians and had nearly 4 million unique visitors during April.
Health-care companies still have to find the right model for capturing profits with their online ventures. "I think it's going to be rare that someone with clinical depression is going to learn about the illness online and then immediately convert that into a transaction by purchasing St. John's wort," says James Kumpel, an analyst with Raymond James & Associates.
Kumpel says he's bullish on the prospect of the Net becoming more important in health care, but is "skeptical of adoption rates." What's needed is "a business model that doesn't burn so much cash that you're out of money in less than a year," he says. Potential online companies must know that the health-care industry "is evolutionary, not revolutionary."
CorSolutions CEO L. Peter Smith says his company's partnerships, particularly the MediConsult deal, are ways to test the waters.
CorSolutions is working with Whittman-Hart & USWeb/CKS to put its call center, patient database, and applications on the Web and to beef up security. It's also redesigning its Microsoft SQL Server database to make it more robust to accommodate expansion plans, says Tom Brady, CorSolutions' CIO.
Healtheon/WebMD, which in the past year has spent billions of dollars buying companies, added SimplyHealth.com to its list of partners in its bid to become the top Internet health-care company. SimplyHealth will offer consumers health-insurance products and information on the WebMD.com portal. Healtheon/ WebMD will receive $30 million over three years from SimplyHealth.com for the service.
Analyst Kumpel says Healtheon/ WebMD is "treating its Web site as an AOL portal for health care. It's locking in very visible streams of revenue over the long term."
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