Posts Tagged ‘WebMD’

As with the last shuttle mission making its re-entry into the Earth’s atmosphere yesterday, I am re-entering the world of healthcare IT after an extended family vacation in the wilds of Alaska. No, I did not see John Halamka up there, it is after all a VERY BIG state, but I did get the chance to go completely off-the-grid, a blessed reprise and observe what is one of the more beautiful and still untouched landscapes in the northern hemisphere. Upon finally arriving in Vancouver I made the vow to return, but next time it will be to spend more time in the small coastal towns of the Alaskan peninsula, likely via an expedition kayak, to get up close and personal with the people and environs of this small corner of the world.

After being away for nearly two weeks, it is a challenge to pick up where one left off. Cruising through the reams of email (please excuse any delays in getting back to you I’ll get to your email yet, I promise), trying to catch up on my reading of the various industry rags and tapping twitter I feel pretty comfortable in stating the more things change, the more they stay the same (not exactly the best quote for an analyst to say as we thrive on turmoil…).  That being said, following are a few items that did catch my attention and may look into further:

FDA Releases Proposed mHealth App Regulations
On Tuesday, the FDA finally released guidance on how it intends to regulate mHealth Apps. Having taken a cursory review of these proposed regs, have to say I’m quite impressed as the FDA has struck a careful balance of  applying regulatory review where warranted while allowing plenty of room for innovation in this very young and still immature industry sector.  MobihealthNews has a fine write-up on this story.

WebMD Provides Abysmal Guidance and Tanks
WebMD, which has been seemingly immune to the recession, provided Q2’11 guidance that sent its stock into a tailspin and leading to a very rapid (next day) letter to investors from the Chairman to quell fears. Why is this significant? First, pharma is feeling the effects of the recession and is pulling advertising dollars off the table. Over the last few years, WebMD has been putting virtually all of its “eggs in one basket” – pharma. It appears that the golden goose of pharma is no longer laying golden eggs which will likely have a ripple effect on the multitude of other smaller Health 2.0 like companies whose business models are advertising based. Secondly, once again WebMD is projecting contraction in its “private portal” business. This is, or at least was, the 800lb gorilla in the PHR market for employers and payers. WebMD has milked this cow for about all its worth and do not be surprised if others start aggressively moving in. Cerner is one and we’ll talk about another tomorrow.

Stage 2 Meaningful Use Likely Delayed till 2014
Can’t say we didn’t see this coming as ONC’s advisory board basically recommended such but it does complicate the schedule for incentive payments which, as part of ARRA were meant to create jobs and create those jobs quickly. As the recession continues to drag on, there appears to be an acceptance that getting back to near full employment in this country will not occur quickly. Such acceptance has appeared to bring some rationality as to the rollo-out of EHRs. Choosing, installing, mapping workflow, testing, training and going live with an EHR, let alone meet the various requirements of meaningful use (MU) is no small task and this delay will bring a sigh of relief among many a CIO and eligible professional. But now one has to wonder: What does this mean for Stage Three?  Don’t be surprised if Stage Three gets the ax.

I’m sure there are other bits of news that I missed and welcome your input to help educate this off-the-grid analyst on all the wonderful things he missed as he was trudging through the temperate rain forests of Alaska or battling grizzlies for a share of their salmon (note, grizzlies don’t share).  BTW, this last picture is of one of the “deep forest creatures” you’ll find in that rain forest.

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Yesterday, the big 800lb gorilla in the PHR market, WebMD announced 3rd quarter earnings that were quite mixed. While its public portal business continues to see strong growth in uniques (now over 83M visitors/month) and advertising revenues that grew 26%, its private portal business continues to produce lackluster results, with flat revenue and holding steady with 124 clients. Even worse for the private portal business, WebMD is projecting a net decline of some 8% for this division in the 4th quarter.

Strong growth for the public portal reflects what other studies and recent surveys have shown: Consumers continue to turn to Dr. Net for a second opinion, self-triage, or simply advice on how to deal with a specific condition.  What is interesting in the case of WebMD is that despite the increasing power and sophistication of search engine technology from Google and the more recently introduced Microsoft Bing, consumers still look to a site like WebMD’s to provide more structured content that is easy to search, review and assist them in managing their health or the health of a loved one.

Zero growth and projected contraction in Q4 for the private portal operations of WebMD is a different story. The private portal business serves both the employer and payer markets wherein WebMD hosts a member or employee PHR for a client. Since late 2007, Chilmark Research has been tracking WebMD’s private portal business as a barometer for sponsored PHR adoption by employers and payers. Now one might easily assume that the downturn in the economy and the lay-offs of hundreds of thousands of employees may have something to do with WebMD’s Q3 results for its private portal business. Problem is: WebMD has been reporting lagging results for this line of business for as long as we have been tracking it so something else must be at play.

Late last year I had a discussion with a senior executive at BCBS-MA. During that conversation I asked what motivated them to take the bold move (at least it was at the time) to allow members to export their claims data to Google Health (BCBS-MA was one of the first payers, if not the first, to allow claims data to be exported by the consumer to a site outside of the payer’s control, in this case to Google Health). The answer, it was a simple business decision. BCBS-MA was spending a lot for WebMD’s private portal and few members were using it. So instead of spending that money on WebMD, the decision was made to turn over the data to the member/consumer allowing them to export it to Google Health and let the member decide how they wished to use their data. Thus, like BCBS-MA, other payers are likely not seeing tremendous adoption and use of their WebMD-hosted PHRs and are not increasing their investments in the service.

On the employer side there may be some contraction in use due to employee lay-offs and a tightening of the belt by employers, but this is likely a very small factor in why WebMD has failed to grown this line of business. Other factors at play are:

Employees still remain reluctant to participate in an employer-sponsored PHR due to concerns of privacy of their health data and how that data may be used against them e.g., deny a promotion.

The efficacy of employer-sponsored PHRs in lowering MLRs (medical loss ratios) and subsequently health insurance costs is far from proven, thus employer ROI is in question.

WebMD has a reputation of being expensive and difficult to work with. Chilmark has also heard some rumors that WebMD is putting very little into improving the capabilities of the private portal platform,- its on life-support. This last point should not come as a surprise considering the results of this business line.

So what does this mean to the broader market?

First, consumers are increasingly turning to sites such as WebMD’s to gather information to assist them in their health and wellness decisions. The WebMD property is a very strong brand, remains one the top go to sites for health information, their iPhone app has consistently ranked as one of the top health apps and thus WebMd can command a premium from advertisers. Unlike most Health 2.0 companies who also seek to leverage the all too common internet advertising model to drive business with little success, WebMD is actually doing it quite successfully.

But WebMD has a major problem in its private portal business and rather then make a concerted effort to put this business back on the right track, the company seems perfectly content to milk this cow for all its worth. That strategy provides an opening for other companies to step in.

The challenge for new entrants, however, will be their ability to provide a comprehensive health and wellness solution that is comparable, if not improves upon the WebMD offering. Today, while there are plenty of products and services in the market that attempt to address various health and wellness needs of employers, there are virtually no solutions that provide as comprehensive a portfolio of services that WebMD currently provides. Employers and payers are looking for options (this was part of the justification for some employers who came together to create Dossia and the separate efforts of Aetna and United Health Group), there is demand, but few options exist outside of creating your own.

Ideally, through acquisition(s), partnership(s) and merger(s) such a solution can emerge to serve the employer and payer markets. Now the question is: Who will step up to the plate and make it happen.

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WebMD announced first quarter earnings today that showed continued lackluster results for their “Private Portal” division, slipping roughly 5% year over year from $23M to $21.8M.

Now one could argue that the overall decline in employment due to the recession is to blame for the drop in clients from 134 to 131 in Q1-2010, but we see something else at play: high pricing for low value delivered.

Having spoken to a number of existing and former customers of WebMD, one gets the clear sense that the private portal business is no longer core to WebMD’s corporate strategy and frankly why should they as they reported overall growth of an impressive 20%.

Its pretty clear to us that the private portal business of WebMD is a business they intend to milk for all it’s worth. This may create opportunities for newer companies to capitalize on. The challenge for them will be to provide a full suite of solution capabilities as few employers or payers today are seeking niche solutions.

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Today, WebMD announced the launch of its new social media initiative, WebMD Exchange.  It’s a dud.

Being WebMD, the leading online consumer health, it is a bit surprising that they are so late to the party as there are now quite a number of health-related social media sites such as one of Chilmark’s favorites, the focused Patients Like Me or the more broad ranging site MedHelp.  Thus, with this announcement one would think that WebMD would have studied the other sites, learned what works and what does not and provide a compelling site.

So much for assuming.

Went to the site today to check it out, here are the quick pluses and minuses:

In the plus column the site has…

1) A number of exchanges to address a wide range of conditions.

2) Some of these exchanges focus on care giver issues, such as parents of children with depression.

3) Registered members can create their own exchanges.

4) For diseases with medications, a list is automatically generated of the relative popularity and use of various medications with member reviews (e.g. side effects, overall effectiveness, etc.).

In the minus column the site…

1) Is cluttered and noisy, hard to determine what to read that is pertinent and what is fluff.  Seems to be an amalgamation of everything not to do in a social community site, let alone one addressing health & wellness.

2) Has far too much noise coming from ads. Now ads are not a bad thing if they pertain to the disease/condition within that exchange.  Finding a postmenopausal ad in a section on cancer or a Charmin toilet paper ad in childhood depression?  Please, WebMD, the technology is there to do a better job than this for your members.

3) Takes to long to navigate due to all of the click-thrus to see pretty much everything.  Since online ad pricing algorithms often have a site retention/click metric, WebMD is purposely making it more difficult to get at content to maintain its ad pricing power – not nice WebMD.

4) Has very little if any policing seems to be occurring leading to the creation of many communities (exchanges in WebMD parlance) that are of little value or just plan silly.  A favorite in the Anxiety-Panic category was the Exchange, OMG Zombies.

5) For some conditions there can be several exchanges. Fine, nice to have choice but which one is truly a vibrant exchange.  Well, that answer is not apparent until you click-thru (more clicks, more ads) to determine if an exchange is vibrant.  Royal pain in the a**.


WebMD’s attempt at using social media within the context of these exchanges is late to market and one of the poorest executions of such that we have seen.  Granted, maybe we had high expectations for WebMD as it truly is the 800lb gorilla in this market. Sadly, those expectations were not even close to being met.

Hey WebMD, why not take a smidgen of that $800M in cash and investments you have hoarded up and actually do this right.  It will be an extremely modest investment that could pay off handsomely rather than this half-baked attempt which is frankly embarrassing and will likely fail.

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Revolution Health is closing down its Personal Health Record (PHR) service at the end of February.  Below is the email sent to those with a Revolution Health PHR account.

Thank you for being a loyal user of the Revolution Health Personal Health Record. Unfortunately we will be discontinuing this service as of the end of February 2010 and removing all records, information, and data from the Revolution Health Web site.

So that you don’t lose the information you’ve entered into the system, we strongly suggest that you download your personal records as a PDF to print and save for future reference. To do this, simply follow these instructions:

1.       Log in to your Personal Health Record.

2.       From any page of your record, click on the “printable version” link on the top right corner of any page. When you see a pop-up box asking you to “Select the following sections to include in your print out,” simply make sure that the sections you want to print and save are checked and then click the “Submit” button.

3.       Once the PDF is created (this only takes a moment), you can print directly from it and/or save it to your computer. To print the PDF, click on the printer icon at the top left of the page. To save it, click on the disk icon to the right of the printer icon.

If you encounter a problem printing or saving your records, please e-mail our customer service department at CustomerCare@revolutionhealth.com for assistance. Even after the Personal Health Record is no longer available, Revolution Health and our partner sites will continue to offer you the same great health information and community pages as always. We hope you continue to visit Revolution Health often to take advantage of our offerings.

Thank you,
The Revolution Health Team

Revolution Health, the one time Internet consumer healthcare upstart darling that founder Steve Case (AOL fame) stated would change healthcare as we know it, flamed out early after a series of strategic missteps and ultimately was sold to the online health publisher, Everyday Health, who is now preparing to do an IPO in 2010.

It’s not like this is a great loss to the nascent PHR industry (Revolution Health actually had a pretty p*ss-poor PHR) nor a signal that PHRs are dead, though Chilmark Research has argued that no one is interested in a digital file cabinet for their health records, which most PHRs are today.  Rather, the PHR market is extremely difficult to gain traction in and all but impossible if a PHR vendor is pursuing a direct to consumer (B2C) marketing strategy.  Revolution Health was attempting such and failed.  PassportMD was pursuing such and was recently acquired.  Countless other PHRs in the market pursuing such a B2C strategy are simply the walking dead – zombies that still have a web presence but no activity (e.g., VitalChart).

What this announcement does say, however, is that one needs to be careful in their own assessment of a PHR for personal use or even if they are looking to sponsor a PHR for their members (payers), employees (employers), or customers/patients (providers).  Not all PHRs are created equal, not all will survive.  Look to those that have a broad customer base, steer clear of those that are solely focused on the consumer.

What is truly odd in this announcement by Revolution Health is that rather than offering their customers the option to directly export their data to another service, be it Google Health, HealthVault, WebMD or one of the PHR players in the market, they are taking the most expeditious path out the door.  Not exactly consumer friendly.  Also, Revolution Health states it will remove all records from the website, but says nothing about what will happen with this highly personal data thereafter.  Will it still be on their servers?  Lastly, why is it that when one goes to the Revolution Health website, you can still register to create your own PHR account?

Now how screwed up is that?!


Ted Eytan, of Kaiser-Permanente, gives his own spin on the story arguing that it is not that consumers do not want a PHR, its just that they seek a solution that actually helps them manage their health and in KP’s case, their interaction with this healthcare provider.  Impressive statistics at KP, truly a leader in this market that virtually all in this market can learn from.

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Here at the Health 2.0 conference and have heard far too many demos (really just pitches) from a multitude of Health 2.0 companies that are really nothing more than some form of glorified search engine.  It is clear that very few, if any, of these companies will be around in five years as there is simply not enough differentiation between what they are offering the market, and what the established brands (WebMD, EveryDay Health, Google, etc.) already offer.

Probably the most frustrating aspect of the Health 2.0 event, of which more will be discussed later is a lack of transparency on the part of these Health 2.0 vendors to tell the audience how they are growing, where they are seeing traction and why we should even care.  Please folks, you want someone to remember you?  Give them numbers that substantiate your reason for existance.

Did a quick comparison of two of the demo Health 2.0 companies with the 800lb gorilla of health content on the Web, WebMD.  Not a pretty picture.  One Health 2.0 company has seen a slide in the past year of over 40% and the other, while seeing good growth, is but a gnat on the big gorilla’s arse.


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crystal-ballMaintaining a tradition among IT analyst firms, following is Chilmark Research’s forecast of Top Trends for 2009.  While there is a significant amount of “crystal ball gazing” in any forecast, 2009 is particularly challenging due to an economy that has yet to stabilize and a new administration and re-invigorated Congress that seeks to “reform healthcare.” Against this backdrop, our predictions reflect and extend what we have seen in 2008, our continuing research, and conversations with numerous stakeholders in the healthcare sector.  As always, we welcome your feedback, via comments on what you foresee in 2009 as well.

Without further adieu our Top Ten are:

Healthcare Not Immune to Economic Woes: Declines in investment returns and philanthropic giving coupled rising bad debt, fewer consumer/patient visits (delay care) and increase in charity care will wreck havoc on an industry sector that is accustomed to being immune to economic downturns. As it pertains to healthcare IT (HIT) spending in 2009 will be way down as healthcare providers look to control costs.  Providers will go into maintenance mode simply maintaining the systems they now have in place. IT projects at least 50% of the way towards completion will see continued funding, if they can see light at the end of the tunnel and ROI will be quickly realized.  All other projects will be curtailed, delayed or killed.  Some bright spots in all this doom and gloom; apps that focus on eligibility checking, revenue cycle management and more progressive cloud-based offerings (e.g., HIE with hosted EMR) will see reasonable growth in the 8-12% range.

Health 2.0 Companies Shrivel on the Vine: As consumers take on more responsibility for healthcare costs and seek low cost alternatives, use of the Internet as a virtual doctor/adviser will increase.  Despite this increase, most Health 2.0 companies fortunes will evaporate for three simple reasons:

  1. Not enough competitive differentiation. There are far too many “me too” apps in market today.
  2. Access to additional funding and exit strategies have evaporated. Reliance on advertising revenue will only sustain “Big” Brands as Internet advertising contracts.
  3. Poor go-to-market strategies including; lack of partners, ill-defined value proposition and poor positioning.

Those Health 2.0 companies that address all three concurrently and successfully are the ones to watch – ignore the rest.

Retail Health Clinics Gain Traction, Corporate Clinics Stall: Budget-constrained consumers seeking lower cost alternatives, and payers encouraging such practices, will increasingly turn to retail clinics for much of their healthcare needs in 2009. This will lead to continued growth in use and build-out of retail clinics across the country.  Despite their potential savings, corporate clinics are a long-term investment. Corporate clinic providers such as the two Walgreens acquired in 2008, (i-Trax and Whole Health) will see growth stall as employers layoff employees and pursue shorter-term cost cutting strategies.

Virtual Visits – A Mixed Bag: Related to Health 2.0 is the proliferation of Internet-based third party healthcare service offerings, (e.g. American Well) which bring together technology, streaming video and an ability to access a doctor over the Web 24/7.  Problem is, healthcare is based on trust and as inherently social creatures, humans base trust on direct, in-person interactions.  Thus, third party virtual visits will struggle.  This will not be the case for eVisits with a consumer’s existing physician/care team where a relationship already exists.  eVisit reimbursements are now becoming commonplace and consumers will increasingly use such services due to convenience and lower costs.

Dossia Ramps-up: Over two years in the making and a couple of stumbles along the way, Dossia was finally launched in late 2008 with roll-out to consortium member Wal-Mart employees (actually, WebMD roll-out with WebMD sitting on top of Dossia stack).  Earlier this month Dossia announced its second PHR partner, Medikeeper.  While Dossia’s ecosystem of partner apps is dwarfed by Google Health (GHealth) and Microsoft’s HealthVault, Dossia brings something to the table that the other two platform providers do not, some 8M+ potential users (employees). Expect at least three more of the consortium’s eight members to begin rolling out the solution, via PHR vendor, to their employees.  We are placing our bets on Pitney-Bowes, AT&T and Intel to go live in 2009.

Chicken & Egg Scenario Plays-out for GHealth and HealthVault: As Google Health and Microsoft look to add more partners, in particular data providers such as pharmacies (GHealth) or payers (HealthVault) the big question remains: Will consumers begin actively storing their health data on these sites and subsequently engage any of the numerous apps that sit on top of these repositories?  Right now it is a very mixed message.  Today, traffic and subsequently use of either platform remains lackluster.  Early reports are that GHealth is generating some decent consumer traffic (click-thrus) for partners.  HealthVault, however, is generating very little traffic for its partners, but has created better visibility for these partners among larger corporate entities (e.g., payers, employers, providers, etc.).

Over the course of 2009 expect Google to become slightly more aggressive, first with biometrics, second with support for other standards and third attracting new partners, especially data owners.  This last point is contingent on additional standards support. HealthVault will couple its aggressive actions to bring more data providers (payers & providers) and software partners into the ecosystem with direct to consumer marketing. HealthVault’s biggest challenge will remain – creating an engaging and easy to use interface for the consumer.

New HIE Models Leveraging Cloud Computing and SaaS Gain Traction: Chilmark Research recently completed a project for a client that gave us an opportunity to gain an in-depth understanding of the HIE/RHIO market.  What is clear is that the vast majority of  quasi-public RHIOs still have not figured out a funding model that is sustainable (e.g.,  CalRHIO is one hairy initiative that will be declared DOA in 2009).  Health Information Exchanges (HIEs), that are increasingly receiving funding from payers or are set-up within a given IDN will continue to see reasonable, low-double digit growth.  Those HIEs that prosper will be based on a cloud computing model and offer small physician practices, at little or no cost (sponsored by payer), via SaaS, such services as lightweight EMRs and eRx capabilities. We learned of several such projects, yet to be announced, that will roll-out in 2009.

Continua Compliant Devices Hit Market with Little Impact to Anemic Telehealth Growth: The industry consortium, Continua, recently announced that Continua compliant biometric devices will enter the market in 2009.  Problem though is that Continua compliant devices only alleviate vendor lock-in for one can now mix and match Continua compliant devices from various vendors.  Continua does not address the much broader and seemingly intractable problem of how to incorporate telehealth into the existing workflow of care providers and even more importantly, reimbursement models for telehealth remains immature.  Until these issues are addressed, 2009 will not see a major boost in the sales of biometric devices.

Dreams of Big Fed Spending on HIT Do Not Materialize: Despite campaign promises and HIMSS Blueprints, healthcare reform and funding for HIT will not materialize in any meaningful amount in 2009.  Half of the problem will come from continued economic woes in other sectors seeking rescue from federal coffers that will start drying up.  The other half of the problem will result from healthcare reform, in all its many guises, that languishes as Congress over-reaches with its multitudinous approaches and little reconciliation in ’09.  We expect 2010 to hold more promise.

mHealth Continues Expansion, Most Apps Lame: We see tremendous promise for mHealth and honestly believe it will be here that consumers truly engage in health and wellness at a very personal level.  Despite the enormous potential, and a growing number of mHealth apps available for the consumer, we find that the vast majority of these apps are incredibly simplistic and do not fully leverage new smartphone capabilities.  Over the course of 2009 we will see far more apps, particularly those originally developed for the iPhone, being re-purposed for Google’s Android OS, the BlackBerry OS and in Europe, for Nokia’s Symbian OS.  Some truly novel, excellent apps are expected, but these will by far be in the minority.

That’s “IT” everyone and to a certain extent this list defines our research agenda for 2009.  Stay tuned, it promises to be an extremely interesting year ahead.

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