While you get your teeth into the long post about Canada that I put up late yesterday, here are two interesting follow-ups to technology issues already tangentially discussed in THCB.

1) Patient-Physician email–Here’ s a thoughtful article about the overall issue from the Seattle Times. It dovetails with the Oregon article I posted about on Monday, and makes the obvious point that even if email enhances productivity, in a fee-for-service environment it’s unlikely to be adopted unless it has payment for the doctors attached.  The docs at Group Health in Seattle don’t get paid that way, so they see the issue as how best to use their time rather than how best to maximize their billings.

2) VOIP (voice over Internet)–The extremely careful reader of the iHealthbeat column on synchronization I referenced last week would have noticed a bullet point about Vocera’s attempts to use health care as a testing ground for its voice over Wi-Fi product, which intends to replace paging and phones within hospitals. Well it looks like someone at the San Jose Merc was reading, or had been bugged by Vocera’s PR firm.  Their comprehensive story about the installation at El Camino hospital is well worth a glance.

Two studies from Oregon, one from Kaiser Northwest and the other from Regence (Oregon Blues) contradict each other about patient physician email. You can see more either at iHealthbeat or from the Portland Business Journal (reg reqd for both). In the Regence case they found that the emails took longer than calls and increased follow up visits.  At Kaiser they found that emails were shorter and averted some visits.  More interestingly both studies showed that about 3 in 10 patients used email in these pilot programs.  Although the reports say that’s small, I think it’s a big number that will get bigger. After all, think how email spread in other situations like in business and family settings.

However, the folks at Today in e-Health Business who have the good line into Forrester Research add that:

Forrester Research has found that 65% of patients who visited their physician’s Web site did so to use it to bypass the office receptionist, choosing to look up administrative details such as office hours. Additionally, one-third said they use the site as a credible source for researching general health and medication information, finds Forrester’s Consumer Technographics Q3 2003 North American Study. According to the study, 30% of physician Web site visitors renew prescriptions online. At more sophisticated physician Web sites, the study found, 13% of visitors report reviewing or paying bills, and 11% are viewing their medical records online.

No surprises here.  At the moment people want to use email to get around phone tag more than they want to fundamentally change their relationship with their doctor. Online consultations, and other more advanced uses of asynchronous technology, will take a while–and of course for them to spread someone has to work out who pays!

Note: This is yet another of those topics where I have a larger post brewing in my "draft" folder.  If anyone has examples or information about patient-physician email to add, please email me!

Jeff Margolis, the former wunderkind CIO of the HMO world, is now CEO of Trizetto. As this somewhat fawning piece in the business section of the NY Times explains, Trizetto has grown to be a $300m revenue company, providing administrative IT outsourcing for health plans. Far be it from me to suggest that there was anything missing from this piece, and I do have admiration for anyone who can grow that big a company in under ten years; however, it might not have tested the NYT’s Melinda Ligos’ investigative powers too much to do the odd Google search and let the casual reader know a few other things about Trizetto.

For instance, while Trizetto may have been growing its revenue since 1998, it’s still managed to lose huge amounts of money over that time, and only just made its first profit. It’s lost over $280m in the last three years alone. Now that includes some fake losses (presumably write-downs from acquisitions) but even so, stripping out those write-downs, it looks like Trizetto lost $30m on $90m revenue from operations in 2000, made less than $3m on $218m in 2001 and made $13m on $265m revenue in 2002. However, these numbers are indeterminate because so much was written off that it’s impossible to tell accurately what was going on. The past quarter they made an official profit in terms of GAAP of just under $1m, although they guided down their revenues for the future. Still, you’ve got to wonder how well they would have done over time if they hadn’t been lucky enough to get out in the eHealth IPO window of 2000, and have a big reserve of cash to sit on.

Even more interestingly, there was no mention of the huge spike in Trizetto’s stock price immediately after its IPO which priced at $9 in 1999 but was up at over $80 at the height of the bubble in March 2000. If you had bought in then (as one reader who did lamented to me) you’d have seen your money drop by over 95% over three years.  OK that may not be Trizetto’s fault alone, but the event that started the plunge was a very wierd announcement that they were going to take over IMS Health, the much bigger health care data company. That may not have been the best strategic move that Margolis ever made, although they ended up getting the Erisco unit from IMS as part of the deal.

I assume that Trizetto’s customers are happy and that the company will go onto be a big player.  But the average NYT reader might want to know a little more about its background than Jeff Margolis’ health problems and that he used to hold company meetings in a local phone booth.

I’m still under the cosh on some other projects, so while you are waiting on my pearls of wisdom you should check out the interesting articles in this compendium from Modern Physician/PWC’s survey on technology use among physicians.  Then go look at iHealthbeat, where Robert Mittman has another interesting Technology Forecast on synchronization technology, which is an underlying background requirement for the mobile world we are heading into.  Much more on physicians and PDA use coming from me, but not this week!

From THCB’s disease management office, Matt Quinn passed this little morsel my way.  Apparently disease management is now so effective that employers, payers and traditional providers are increasingly unwilling to pay extra for guarantees that DSM works. Traditionally DSM companies have charged extra to guarantee performance, and then have been prepared to share risk–paying back some of the cost if the services didn’t save money on care of those patients in the DSM program. Now they are so effective that they just don’t need that extra revenue any more. As Matt writes:

Now Matt may be being overly cynical about this, but consider Lifemasters’ CEO Cristobel Selecky’s statement "I think what everybody has come to realize is that after several years of doing financial measures, there’s a recognition that it’s very hard to do, and you never end up with any one right answer".  There seems to me to be a kernel of truth in her words, if not in her intent. Selecky could be interpreted as saying that, no-one knows what the heck DSM is supposed to be doing as part of the wider medical care process, so no-one can agree on whether it’s saving money or not, so customers are not prepared to pay extra to get rid of a risk that they can’t quantify or control.  That’s more or less what happened with the few at-risk contracts that the PBMs signed in the 1990s.  They are in general back in the business of processing claims for money. Matt thinks DSM will end up like "managed care"–looking like just another FFS plan–as a result, with a consequent (lack of) impact on costs:

  Maybe DSM works so well that it’s logically being "carved-in" to standard medical processes, and AH and Lifemasters and the rest are on their way to becoming extremely specialized call centers. However, this may all be a consequence of the fact that earlier this year AH had to pay a customer back $14m for not achieving goals in its DSM program–goals that AH later claimed couldn’t be verified anyway. (Interesting that they signed a contract to perform to goals that they knew they couldn’t measure!) Perhaps the DSM folks realize that its easier to just provide a service rather than be responsible for a defined piece of care, and that it’s called "going at risk" for a reason.

I was kindly invited to sit in on a webinar by Manhattan Research this morning on their new Cybercitizen Health v3.0 data about ehealth consumers. The webinar used Placeware, a competitor of Webex that I used to use to do software demos.  Placeware was bought by the Evil Empire in Redmond last year and is the core of their new version of NetMeeting. Basically going to the pre-set up web site allows you to follow along with the speaker’s slides, while you dial into a conference call to hear the presentation.  You can also ask a question by typing into a box, and complete polls that the speaker sets you.  It’s a nice system, very suitable for online presentations and you can expect wider adoption of these webinars as people get used to it.

Manhattan Research is the survey part of the old Cyberdialogue, a company that made alot of noise tracking the eHealth space in the late 1990s, and incidentally was a rival in that to my group at Harris Interactive.  In 2001 the company split into two newly named units, with Fulcrum Analytics taking the CRM side of the business and Manhattan taking the research.  Manhattan has two major focuses in its syndicated research, Consumers and Doctors.  It performs extremely large and long phone surveys (3,500 consumer respondents with over 150 questions) and then follows up with online surveys. It’s physician survey has over 700 respondents, which is also very large for a doctor phone survey.  That means that you can cut the data several ways, which is useful for looking at subgroups of patients and physicians.  Harris, for comparison tends to do smaller phone surveys but larger online ones.  There’s a whole issue of survey statistical wonkiness that I won’t get into here, but take it from me that both these organizations do expensive and quality work, which is not the case for many, many surveys you’ll see quoted in the press.

So in this presentation Mark Bard, Manhattan’s president, pulled three broad themes out of the data.  I’ll relay them briefly here, but forgive the odd mistake as the presentation isn’t available online yet, and I was scribbling fast. (It probably won’t be available online unless you subscribe–getting more subscribers was, after all, the point of their webinar in the first place)

1) EHealth consumers are growing as share of overall online population.  There are 113 American adults online, 72 million use health information every 3 months or more, while another 10 have used some type of ehealth information at least once in the past year. The interesting part is the variation in activities online amongst the ehealth consumers, and their impact off-line.  The 82 million impact a further 50 million whose health they might be managing–Manhattan estimate that that includes 30 million kids, 10 million "lazy spouses" and 10 million parents or other elderly relatives.

2) About 20% of the 72 million are "caregivers".  That group is very active about using information found online. 68% use it to discuss care for themselves and others with their physician, 59% use it to discuss treatment options for particular diseases with physicians, and 65% conduct independent research about their and their relatives health online.

3) The roll of the connected consumer for health plans is also growing, but its currently very small. (I’ve commented on aspects of the reasons for this here and here). Of the 82 million, 19% had visited their health plan site, but there were few transactions going on. Only 26% (of that 19%)  had checked on a claim (though many more wanted to) and only 15% had filed one online. So while there has been some progress amongst health plans in their online strategies, they are far from hitting paydirt yet.

My assessment overall is that eHealth is hitting a natural wall, with most people who want information now finding it (although Manhattan projects their number to grow to over 100 million in the next five years.  The issues as pointed out by Mark Bard are:
a) What will be the role of the differing types of ehealth consumers in their off-line behavior–particularly in the doctor’s office and pharmacy.
b) How can the low number (>25%) of eHealth consumers currently doing transactions online be increased? (Hint: if it is built right they will come!)
c) How can health plans, providers and others make their online strategy a core part of their business process and outreach to consumers. It can be done and we’ll all be a lot better off when it is done!