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


Medicine eyes market for online health information

Despite tough competition, doctors think they can win over patients with top-notch clinical Web sites

From the March 2000 ACP–ASIM Observer, copyright 2000 by the American College of Physicians–American Society of Internal Medicine.

By Phyllis Maguire

In what promises to be an uphill battle, medicine is finally making a serious bid to capture the attention of health care consumers online.

Organized medicine is leading the charge, with the AMA spearheading an effort by several medical societies to position themselves as the voice of medicine online. Existing Web sites run by top-tier institutions like the Mayo Clinic are also stepping up their efforts to keep up with the Internet's frenetic pace.

The goal is to take control of the information that consumers get over the Internet—and net some advertising and investment dollars. While there are already thousands of health care sites, physician groups say the accuracy of much of the information on the Web is suspect. Medical institutions are hoping that online consumers will be drawn to such respected "brand names" as the AMA and the Mayo Clinic.

But the move by medical societies raises questions: What role should professional societies play in the booming growth of Internet-based medical information? And can staid medical organizations thrive on the Web, where commercialization and financial interests rule?

Organized medicine's stance

Late last year, the battle for control of online health care information heated up when the AMA and six other medical societies announced the creation of Medem Inc. (, a for-profit venture. The San Francisco-based startup will provide physicians with individual Web sites packed with consumer health information. Instead of having patients surf the Internet for questionable information, physicians can refer them to their own Web sites, which will contain state-of-the-art, peer-reviewed information produced by Medem in partnership with participating societies. Doctors will pay $70 a month for each individual site, or get the service free if they agree to a sponsored site with advertising.

Medem reasons that patients trust their individual physicians, who in turn rely on their medical societies for credible information. While physicians can already get free Web sites from companies like Inc. ( and Physicians' Online (, Medem hopes that the caliber of its content will give it a big edge over the competition.

The quality of consumer health information on the Web is a concern because the accuracy of that information fluctuates wildly. Articles in recent issues of both Cancer and Pediatrics claimed that almost half of surveyed Web sites contained wrong or misleading information.

Besides positioning individual physician sites as the source for top-notch medical content, Medem's business model will allow patients to send e-mail to their doctor's office and schedule appointments. (Eventually, physicians will be able to use their Medem site to file payment claims and verify enrollment eligibility. See "Coming soon: a deluge of offers to wire your practice," this page.)

Initially, however, Medem's focus will be to provide consumer health information that is produced and endorsed by medical societies. "Our goal from the get-go has been to put individual physicians at the hub of health care information," said Edward S. Fotsch, MD, Medem's president and chief executive officer. So far, 10,000 physicians have signed up for Medem's services, he said.

Medem is in part a response from professional societies that saw their presence on the Web slip. Last year, for instance, the AMA's site ( lost ground to for-profit startup sites, dropping from more than 320,000 visitors a month in February, 1999, to only 200,000 visitors in December.

According to Dr. Fotsch, Medem is a natural evolution for medical societies. "Each society wanted a presence on the Web but knew it didn't have the wherewithal to be the recognized voice of medicine," he explained. "The solution was to say, 'We better man together—because if we don't, we don't know whom we'll be doing business with.' "

To date, seven societies have signed on: the AMA; the American College of Obstetricians and Gynecologists; the American Academy of Pediatrics; the American Academy of Ophthalmology; the American College of Allergy, Asthma & Immunology; the American Psychiatric Association; and the American Society of Plastic Surgeons. While they have contributed several million dollars, Dr. Fotsch claimed that Medem is still seeking capital in "the tens of millions of dollars." Though there are no immediate plans for an initial public offering (IPO), he said, there may well be one in Medem's future.

The vision of an umbrella organization representing medicine on the Web, however, does not appeal to everyone, and Medem has yet to sign up a primary care society. Both the College and the American Academy of Family Physicians have declined to participate "at this time," said Walter J. McDonald, FACP, the College's Executive Vice President. Dr McDonald did agree that physicians need to take control of Web-based health care information.

The College is considering other strategies, such as partnering with a for-profit Internet venture to distribute educational materials. In addition, the Board of Regents next month will consider establishing a marketing and communications committee to help the College navigate in the new business environment.

Competition heats up

While some medical societies are pinning their hopes on Medem, several established medical Web sites are stepping up their Internet efforts. Two of the biggest sites run by respected medical institutions are InteliHealth (, a for-profit partnership between Johns Hopkins Medical Center and Aetna U.S. Healthcare, and Health Oasis (, which is run by the Mayo Clinic.

Both sites are poised for expansion. InteliHealth may soon be spun off as a separate entity and seek additional capital. Mayo has formed a for-profit company called Health Oasis Inc. and raised capital through an investment partner to launch a more extensive site.

Mayo officials see a major difference between their site and other for-profits. "Physicians' mission is to help people improve their health and assess their needs, not to sell them something or put out information just because an advertiser will pay them to," said Patricia S. Simmons, MD, the Mayo pediatrician who heads up the clinic's new Internet initiative. Without physician ownership and leadership online, Dr. Simmons maintained, health care information will serve the highest bidder, not meet patients' needs.

The Mayo and InteliHealth sites have so far held their own, but the pressure is on from major e-health care players with huge promotional budgets. Last summer, for example, launched a $25 million advertising campaign; by year's end, it was getting more visitors--more than 4 million—than any other consumer health site.

Sites are also swapping money and stock to build strategic alliances. Medscape Inc. (, for instance, is now allied with CBS News, while Healtheon/WebMD ( is partnering with both CNN and Rupert Murdoch's News Corp. (At press time, Healtheon/WebMD also acquired OnHealth to strengthen its position with consumers.)

Still other sites are reaching for instant credibility through physician superstars. Medscape pulled off a coup by hiring George D. Lundberg, MD, the deposed editor of the Journal of the American Medical Association, as its editor-in-chief. The name of former surgeon general C. Everett Koop, MD, is so synonymous with medicine-you-can-trust that his site—which raised more than $84 million during its IPO—is simply

Can sites from medical societies and institutions like Mayo survive in such a competitive environment? "I'm in the minority of [investment analysts] in that I'm not prepared yet to say that the game is over," said Raymond G. Falci, senior managing director of the investment firm Bear, Stearns & Co. Inc. "I think there's going to be a fair number of different niches and room for many different specialty areas to co-exist."

Pitfalls online

Unfortunately, Dr. Koop's site illustrates what can go wrong when medicine goes online. According to reports in the New York Times and Metro Times Detroit, the site failed to note that Dr. Koop received commissions on products sold and patients recruited for clinical trials through the site. Further, published a list of hospitals that it touted as innovative, but did not disclose that each had paid $40,000 for the endorsement. ( now claims that such practices have been changed or made explicit.)

For many in medicine, the notion of a for-profit medical society venture raises the specter of the AMA's botched 1997 deal with Sunbeam Corporation. The AMA agreed to endorse Sunbeam home health products, but it canceled the deal after protest from the medical community.

Dr. Fotsch pointed out that Medem is a far cry from endorsing another company's products. Yet organized medicine faces other hurdles in entering the world of online health information. The most significant is how to ensure the credibility—and protect the integrity—of editorial content.

Mayo's future site will accept content only from Mayo's 2,000 physicians. Some of the content on is written by staff at institutional partners such as Scripps Clinic, Cleveland Clinic and Mt. Sinai Medical Center. And while InteliHealth employs nonphysician writers and editors, all content is approved by a team at Johns Hopkins.

Even with credible content, there are other issues, such as ensuring that editorial material isn't swayed by advertisers or linked to specific products. Mayo solves the problem by not permitting links to ads or product ad placement with articles. Other health care Web sites are drafting advertising guidelines to be published this month. Medem may have to resolve that issue among its users since medical societies have different policies on direct-to-consumer advertising

And Medem faces other potential pitfalls. While the site's sponsoring societies will retain editorial control over all content, there may be problems getting different organizations to agree on exactly what information to put on the Web. Because different medical societies have different protocols, some wonder whether medicine really can speak with one voice online.

It is just one more hurdle that organized medicine will have to clear as it tries to play catch-up on the Internet.

"The argument is very compelling that a physician-sponsored health care information portal would have appeal both to patients and physicians," said Mr. Falci from Bear, Stearns. "The flip side is that it's become a very crowded field."

Coming soon: a deluge of offers to wire your practice

If you haven't yet been swamped with offers for free Web sites, prepare for an onslaught.

Physicians are once again being courted as gatekeepers. This time, however, it's not by insurers, but by e-health care companies. Internet startups want not only to fulfill your patients' information needs, but also help you electronically file claims, verify your patients' health care coverage and order equipment online.

The business of physician Web sites is a wide-open multimillion dollar industry. According to AMA data, only 27% of physicians in 1999 had their own Web sites, up from 17% in 1997. Yet experts expect that figure to soar within the next few years as physician practices increasingly use the Web in their practices.

Clinical and administrative services are likely to shift online. Experts predict that faster connections will revolutionize the role that Internet-based video—which patients will access through physician Web sites—will play in clinical care.

Then there is the Health Insurance Portability and Accountability Act, which will phase in standardized medical information systems by 2002. Analysts expect this legislation to sharply accelerate online "business-to-business" transactions—filing insurance claims, processing referrals or eligibility requirements and ordering supplies. Companies that provide the technological tools for those transactions will collect fees on each one.

According to a survey published in January by the Cambridge, Mass.-based Forrester Research Inc., health care business transactions may hit $348 billion by 2004. Kaiser Permanente is leading the trend, recently announcing that it will spend $2 billion to move all of its administrative functions online and connect its hospitals, clinics, physicians and purchaser groups.

How will individual doctors be affected? Analysts say that few of the existing health care Web sites will be able to turn a profit without such business-to-business fees. As a result, more are expected to enter this market and offer physicians incentives to get wired.

Healtheon/WebMD is positioning itself as the largest provider of physician business services. It has been busy acquiring electronic claims processing companies, as well as a host of other medical service providers, and forming an alliance with Humana Inc.

But both the Medem and Mayo Clinic sites also plan to offer online electronic business services. "That will be a natural extension," said Edward J. Fotsch, MD, Medem's president and chief executive officer, "but we would look for partners to do that, not invest Medem's money in trying to create those services."

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