Physician, Heal Thy Web Site

Smart Business, December 2000
by Thomas Claburn

Hook up the stock price of Drkoop.com or Healtheon/WebMD to a heart monitor and any doctor would tag and bag it.

For privately held Medem (www.medem .com), an online heath network founded and financed by the American Medical Association and other medical groups, quarantining itself from public markets buys the time to build a business and market its greatest asset: trust.

"I don't think anyone in the e-health space would say they have better information than the American Academy of Pediatrics on pediatrics issues," says Dr. Edward Fotsch, Medem's CEO and a veteran of rival Healtheon. "I think the societies offer tremendous value."

Medem builds physician Web sites, and Fotsch says, "Our business model is to create a secure patient–physician network that has information 'from trusted sources' and to facilitate communications between docs and patients." Drkoop.com doesn't provide the latter. "I don't think secure messaging, for example, has much meaning for Drkoop.com. It's absolutely critical for us."

Fotsch says it's too early to tell if the Web changes the balance of power among patients, physicians, and insurers, but he predicts interests will align. "It's not hard to imagine a scenario in which a pharmaceutical company and a health plan get together to fund an online information delivery program 'approved by the medical societies'. And docs are happy to enroll their patients because they are confident in the clinical message. I think the patients are going to love it. I have yet to hear a patient say, 'I am tired of getting spammed by my doctor's office.' "