American College of Physicians: Internal Medicine — Doctors for Adults ®


A new way to meet your business needs: online services

From the July/August 1999 ACP-ASIM Observer, copyright 1999 by the American College of Physicians-American Society of Internal Medicine.

By Howard Wolinsky

Last fall, Truett Jarrard, MD, a cardiologist in Newnan, Ga., decided that it was time to finally put his practice online. At the urging of several patients who had difficulty reaching him by phone, he opened an e-mail account and created a Web page through a new online service for physicians called WebMD.

While Dr. Jarrard said that he does not consider himself "a technology person," he quickly began using the service for much more than simple e-mail. He now regularly markets his practice through his Web site, searches WebMD's online library for journal articles and checks financial news in the service's "Physicians Lounge" area.

"The beauty of WebMD is they have so many things that I want in one place," he said. (His Web site is located at

It's just the beginning of what WebMD and other services like it can do. While the Internet boom has provided physicians with plenty of Web sites to get clinical information, relatively few Web sites allow physicians to carry out their day-to-day business—submitting claims, reading transcribed notes, even trading stocks electronically—over the Web. WebMD, and a number of other sites, are out to change that by creating new Web-based services and linking physicians to existing services online. Their ultimate goal is to offer physicians one-stop shopping for all of their business needs.

Even as it struggles to take off, the market for these services is radically changing, reflecting the optimism of a whole new set of players. Just before press time, Healtheon and WebMD announced plans to merge into a single company. At the same time, several outside companies committed a total of $360 million to the new company. The largest investor was Microsoft, which promised to deliver $250 million in the form of physician subscriptions, advertising and sponsorships. Other companies like DuPont, Intel and Excite also made similar commitments totaling more than $100 million. While the effect of the proposed merger on physician users is unclear, analysts say that it is just one more indication of the business community's interest in physicians as consumers of Internet services.

The players

Analysts say the market for online business services for doctors is particularly enticing because physician offices have been so slow to embrace computer technologies. Consequently, there's much room to grow. "If you walk into a physician's office, you may see four or five administrative staff working with largely paper-based products," said Rishi Sood, principal lead analyst in health care for Dataquest in Mountain View, Calif. "That just shows you how slow the adoption rate is for regular technology in the doctor's office."

Various services have picked up on that void and are targeting physicians' business needs through a variety of online products. Here are some of the key players: (Because the effects of the merger between WebMD and Healtheon are not yet clear, the two companies are presented separately.)

WebMD ( WebMD's Virtual Receptionist gives users a single mailbox that holds voice mail, e-mail and fax messages. The company also offers WebMD OnCall, a 24-hour, physician-only answering service, and access to Medirisk Inc.'s Fee Schedule Analyzer, which allows physicians to create fee schedules consistent with rates in their market. Physicians can also use the Web site to check patient eligibility and referral authorizations with payers like Aetna U.S. Healthcare, Cigna Healthcare and Oxford.

Jay P. Gilbertson, president of WebMD, pointed to his online transcription service as one example of how his company can help physicians work more efficiently. Instead of waiting four or five days for a transcription, he explained, physicians can receive transcriptions within a day via e-mail. As a result, he said, they can submit an insurance claim—and get paid—more quickly. In addition, physicians also save shipping and handling charges by having transcriptions sent to them via e-mail. Though access to the service is part of the basic package, members are charged 14 cents a line for each transcription.

WebMD plans to supplement its product line by offering physicians access to coding and billing analysis services, an online service to help fill permanent and locum tenens positions and a way to order medical supplies and equipment online.

The basic service costs $29.95 a month and allows physicians to verify insurance information and get authorization for referrals, create a Web site, access WebMD's clinical library, use e-mail and take CME courses. WebMD OnCall, the answering service for physicians, costs $70 a month. (Because of the company's merger with Healtheon, WebMD's current membership numbers were not available at press time.)

Healtheon ( Unlike WebMD, Healtheon, which was started by Jim Clark, one of the founders of Internet pioneer Netscape, specializes in creating its own Web-based services for physicians.

"We're an engineering company," explained Charles Saunders, MD, the company's medical director and vice president of strategic planning. "We build the applications ourselves."

One of the company's services, Healtheon Practice, allows physicians to create their own Web sites, send e-mails and faxes, get health-plan eligibility information on their patients, submit claims to payers, order lab tests and get results, and access medical references and databases.

The service also eliminates paper woes in the case of many referrals. For example, when Larry Shore, MD, a family physician in San Francisco, refers a patient to a specialist who is part of his independent practice association, Brown & Toland Medical Group, his staff simply fill out an online form that was created by Healtheon and is available on the group's own Web site. When the patient arrives at the specialist's office, office staff go to the online form for referral information.

"The patient doesn't have to carry anything except the phone number and address of the doctor," said Dr. Shore. "The specialists are really excited about being able to access the referral electronically rather than having to call my office and have us fill out another paper form because the patient lost it. Everything is more rapid and trackable."

Healtheon Practice also helps physicians process claims, eligibility requests, authorizations, referrals and other administrative transactions online. Dr. Shore now finds out in days—sometimes even minutes—a patient's status with health plans and the extent of coverage. Previously, it could take his staff up to a month to get that information.

Healtheon currently provides services to more than 170,000 physicians and 450 payers; major clients include provider networks such as Baylor Healthcare System and Hills Physician Groups. Dr. Saunders said that physicians are not charged for direct services offered through their IPAs, though some physicians pay $20 to $70 a month for specialized workflow management tools.

Physicians Online ( Physicians Online Inc. or POL, as it is more commonly known, launched in 1994 offering e-mail, physician discussion groups, drug information and access to Medline.

POL already offers discussion areas for physicians on business topics such as office management, and on clinical topics like cardiology, gastroenterology, pulmonary medicine and infectious disease. But to get the attention of physicians looking for help running their practices, POL now offers an online job service, an online prescription ordering and refill service, an online service to order drug samples and online access to market research. It is also preparing to test a service that would allow physicians to electronically file claims, check patient eligibility and get authorizations for referrals.

Because POL continues to be sponsored by pharmaceutical manufacturers, which run drug ads across the bottom of the computer monitor, the service is free for physicians. It now has about 180,000 physician-members.

A hot market

Experts in computing systems predict that these services will help physicians improve communications and reduce costs. "Web technology makes sense for health care because in health care you have so many players and it is extremely difficult to provide a common kind of medium to link them up cost effectively," said Doug O'Boyle, program director of META Group's health care practice in Reston, Va. "The Internet solves that problem. It is a very cost-effective way to create many-to-many communications, which is essentially the business model in health care today."

Because physician business services represent such a huge dollar amount—by some estimates, $250 billion a year is wasted on duplicative efforts and inefficient paper-based processes—vendors and investors are anxious to enter the market for physician services. Fueling their interest is the fact that roughly 40% of physicians' offices already have Internet access, and more are signing up daily.

As a result, some of the largest players in health care have been pouring resources into making what is known as "e-commerce" a reality for physicians. Healtheon has been working with such major companies as IBM, United HealthCare and SmithKline Beecham Clinical Labs to deliver services to physicians. WebMD has been working with health care heavyweights such as Medirisk, Envoy Corp. and McKesson General Medical. If the WebMD/Healtheon merger is successful, analysts expect even more large business concerns to want to get involved.

Vendors and investors may be euphoric about the market for online business services for physicians, but the real issue is whether enough physicians are finally ready to move their business transactions online to keep the momentum going. "As a group, doctors are pretty resistant to change," said Beth Nash, MD, an infectious disease specialist who is POL's chief medical officer. "They don't want anything to slow them down. But if you can deliver on the promise that you can make things run faster for them, they will come."

Howard Wolinsky is a Chicago-based freelance medicine and technology writer.

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