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E-CareManagement News

February 12, 2000


Internet health analysts initially divided the world of e-health into 3 or 4 “Cs” – usually Content, Connectivity, and Commerce (and sometimes Community).

Wit Capital has recently another C to the list –- Clinical Care.

Wit’s excellent 58 page report “eHealth 2000:  Healthcare and the Internet in the New Millennium” can be viewed in either HTML or Adobe Acrobat formats.

Wit Capital’s report identifies this new category as -- Clinical Care:  The Convergence of Disease Management, Health Management and the Internet.

“Relentlessly rising healthcare expenditures have plagued healthcare payers and providers for the past two decades.  Inefficiency in the healthcare system abounds, including a high incidence of inappropriate care, inexplicably high variation in treatment approaches and outcomes among practitioners and regions, and lack of information available to consumers.  At the same time, individuals, increasingly disillusioned with the healthcare system, have sought empowerment by taking more personal responsibility for their healthcare and proactively seeking more information and tools to better track and manage their health. Disease management companies seek to solve many of these longstanding issues. Increasingly, a disease management approach to care is becoming accepted as critical to controlling overall health costs while maintaining and in many cases improving quality.”

Wit develops an initial list of companies in the e-clinical care space: Accordant, Avandel, Caresoft, Confer, Global Medic, Health Hero, Lifechart, Lifemasters, MedicaLogic, Wellmed.


What have other analysts said about the e-care space?  The remainder of this article presents perspectives from reports issued by Goldman Sachs, Dain Rauscher, U.S. Bancorp Piper Jaffray, Bear Stearns, J.C. Bradford and Company, and Hambrecht and Quest.

GOLDMAN SACHS.  “Care will likely be the most significant benefit of the Internet in healthcare, but it is also likely to be the slowest to develop.  We believe this will be an evolutionary process, from simple content, to care management applications, to more robust care treatment applications.”  Goldman Sachs Investment Research,  “Health-e Opportunities in eHealth”  November 1999.

DAIN RAUSCHER.  “It is widely recognized today that the long-term solution to controlling healthcare costs is to address the delivery of care, which represents the other 85% or $850 billion of costs.  The goal is to move from managing costs to managing clinical processes.”  Dain Rauscher, “The Internet’s Role in Healthcare:  Realizing the Power Of eCommunication”  October 1999.

US BANCORP PIPER JAFFRAY.  “Clinical systems will be the killer apps for the foreseeable future. The Internet will be used extensively to exchange information outside of the four walls of the health care setting (hospital, alternative care center, provider’s office).”  U.S. Bancorp Piper Jaffray Equity Research, “Monthly Commentary”  January 2000

BEAR STEARNS.  “Web-enabled applications can bring licensing, consulting, and implementation revenues to firms that provide them.  We see this category as possibly the highest value-added proposition in the health care Internet segment, based on the ability to combine actual care management protocols with the advantages of Web-based connectivity.”  Bear Stearns, “Health Care Internet:  A New Realm of Opportunity”  July 1999.

J.C. BRADFORD.  “With great joy we see the fledgling world of telemedicine pass the baton to the new era of what we are calling ‘Web medicine.’  Web medicine embodies all of the virtues of telemedicine while leveraging the cost benefits provided by the Internet to make disease management a viable business.  It is no longer necessary for a costly nurse or clinician’s aid to interact with a patient to collect vital clinical information; rather, the patient can log on and enter the data himself.  Clinicians can spend their time intervening with high-risk patients identified by sophisticated clinical algorithms in the Web-medicine system rather than performing low value-added maintenance calls to patients.  Patient compliance can be tracked by the system and incentives put in place by the health plan to compel the patient to actively participate.  Suddenly, Web-medicine begets disease management.  Disease management enables case management. Costs can be actively controlled while wellness increases dramatically.”  J.C. Bradford & Co., “ – The Internet in Healthcare:  The Final Frontier”  August 1999.

HAMBRECHT & QUEST.  “The Internet is an ideal platform for disease management (DM) solutions that link patients with providers, payers, and suppliers.  DM Web sites, by serving as a resource for disease and wellness-related information and facilitating communications with providers, enable patients to act as their own case managers.  Given that the majority of clinical costs are from chronic diseases, and that a significant percentage of these costs could be avoided through better clinical focus, DM solutions offer huge potential cost savings, as well as improvements in the quality of care and medical research.”  Hambrecht & Quest, “The Industry:  The Convergence of Healthcare and The Internet”  January 1999.

Further reading:  The Fifth “E-C” – Care


A recent article in the Industry Standard quotes the CEOs of HealthCentral and Drkoop, two publicly traded health portals (e-content companies).

Drkoop CEO Donald Hackett told analysts and investment bankers at a recent Chase H&Q health care conference that "content is not the key."  Drkoop, he said, will evolve into a disease-management company.

Albert Greene, CEO of HealthCentral, noted that the company’s next step is to offer disease management services.

We will have more to say about this significant shift in strategy.  Please send your comments to


A number of studies relating to health ethics and privacy have been issued in recent weeks.

The California HealthCare Foundation (CHFC) sponsored the “Ethics Survey of Consumer Attitudes about Health Web Sites .  This study was conducted by Cyber Dialogue and the Institute for the Future.  Key findings include:

1) Internet users overwhelmingly do not want their health information shared with anyone else without their consent.  88% percent of respondents said they would not be willing to submit information if it were to be shared with advertisers or marketers.

2)  Online medical record keeping, even if access is restricted to an individual and his or her physician, is perceived as the greatest threat to individual privacy on the Internet.

3)  Physicians may hold the key to overcoming consumer's fears. Internet health consumers are most likely to trust their physicians, medical institutes and associations to maintain the privacy of their personal health information.

4)  People don't know if their privacy is legally protected.

5)  17% of Internet users will not even search for health information online because of privacy concerns.

The CHFC also sponsored the “Report on the Privacy Policies and Practices of Health Web Sites” .  This study was conducted by the Health Privacy Project at Georgetown University.  Key findings:

1)  Visitors to health Web sites are not anonymous, even if they think they are.

2)  Health Web sites recognize consumers' concern about the privacy of their personal health information and have made efforts to establish privacy policies; however, the policies fall short of truly safeguarding consumers.

3)  There is inconsistency between the privacy policies and the actual practices of health Web sites.

4)  Consumers are using health Web sites to better manage their health, but their personal information may not be adequately protected.

5)  Health Web sites with privacy policies that disclaim liability for the actions of third parties on the site negate those very policies.

HealthCentral issued a press release challenging some of the findings.

Additional studies examining consumer views of health privacy issues were recently released by LaurusHealth and by Medstat ("Consumers Say Privacy of Health Information is Important, but Understand Need for Healthcare Research" and "Consumers Skeptical of Health Information on Internet" ).


In the autumn of 1999 more than a dozen leading e-healthcare companies began a dialogue to address consumer concerns about the ethics and integrity of Internet health sites.  Hi-Ethics (Health Internet Ethics) members agreed that Internet users deserve high quality content, responsible advertising and the protection of personal health information.

Another Internet health ethics initiative is sponsored by the Internet Health Coalition (IHC).  The IHC coordinated an eHealth Ethics Summit in Washington DC between January 31 and February 2, 2000.  You can review the agenda and meeting notes at their website.

Five workgroups at the Summit included

Quality of content

Commercial Behavior

Privacy, Security, and Confidentiality


Use of the Internet in the Practice of Healthcare Provision

The meeting notes of the last group will be of particular interest to readers of E-CareManagement News.  (The meeting notes are rough –- what you might expect see to on a flip chart.  They are a fascinating account of the thoughts of some of the best international experts in this area.)

....and just last week the American Accreditation Healthcare Commission/URAC jumped on the bandwagon with its own initiative to develop accreditation standards for health web sites.


Is there any connection among the trends discussed above?  YES!

The importance of protecting patient privacy and confidentiality of medical information cannot be underestimated.  Don Kemper, President of Healthwise and Chair of Hi-Ethics, notes that there traditionally have been 3 factors for success in real estate – location, location, location.  He describes the 3 factors for success for Internet health companies as “Trust, trust, trust.”
Consumers are demanding higher standards in e-health than in other areas of Internet commerce!
E-health companies must build firewalls between their e-content and e-commerce initiatives.  This is parallel to a separation that already exists in journalism –- the division between journalistic comment and advertising.  As a practical manner, this means that diabetics browsing through medical content on the web WON’T be seeing banner ads for glucometers (unless they have explicitly given their permission).
E-content companies will migrate toward becoming e-care companies (more on this later). 

A rhetorical question:  Did entrepreneurs and investors anticipate these developments when they funded e-content companies?


A study published in the Archives of Family Medicine evaluated the use of remote video technology in the home health care setting.

The Conclusions:  Remote video technology in the home health care setting was shown to be effective, well received by patients, capable of maintaining quality of care, and to have the potential for cost savings.  Patients seemed pleased with the equipment and the ability to access a home health care provider 24 hours a day. Remote technology has the potential to effect cost savings when used to substitute some in-person visits and can also improve access to home health care staff for patients and caregivers.  This technology can thus be an asset for patients and providers.

Commentary:  How long can the Industrial-age peer review/publishing process last in the days of the Internet?  This study was performed in ‘96-97 and is being published in 2000?  Hello?  While it’s nice to see the cost savings shown by using telehealth technology, a few things have happened since 1996.  (In contrast, the CHFC Ethics Survey referenced above was conducted and published in January 2000).


A recent article in the San Jose Mercury News comments on plusses and minuses of doctor visits over the Internet.

E-CareManagement News is an e-newsletter that tracks a major change in health care and managed care—the paradigm shift from “managing cost” to “managing care”.  This e-newsletter is brought to you by Better Health Technologies, LLC (  BHT provides consulting and business development services relating to disease management, demand management, and patient health information technologies.

You may copy, reprint or forward this newsletter to friends, colleagues or customers, as long as the use is not for resale or profit and the following copyright notice is included intact. Copyright © 2000, Better Health Technologies, LLC. All rights reserved.

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