Here’s the transcript from last weeks podcast. It gives you a window into one of the hot areas at the moment, Health2.0 (perhaps I should trademark that quick!). The participants are three leaders of new online health focused companies, all of whom are relatively new and very ambitious. The original podcast post is here.
Matthew: Welcome to another THCB podcast. I’m Matthew Holt. Today is pretty exciting. I have got three of the leaders in what’s starting to be called the Health 2.0 movement. Those of us who were around the first time when things got crazy in Silicon Valley in the late 90’s when Netscape and Healtheon came on the scene are somewhat nostalgic for the days when you would go to parties and people would try to recruit you for a job just because you were standing around drinking. And those of us who have lived through the e-health bust are particularly upset about what happened next!But it looks like in the last couple of years, mostly in the last year or so, there’s a lot more interest in health care online, health care search, and health care information. And a lot of that has to do with what’s happened with the Google IPO and how successful Google has been creating a business out of search. Obviously a lot of the buzz in Silicon Valley and on the Internet in general has to do with that.But what I thought we’d do today is take a look at this Health 2.0 movement. So I’ve assembled three individuals who are leaders of companies, all of them at this stage relatively small companies, and all relatively new companies. But all of them are doing something very interesting in a slightly different segment of health care and health care online, or as it’s now starting to be called, Health2.0.And just before I introduce them, I’d also point out that just yesterday Dmitriy Kruglyak at HealthVoices started a manifesto called the Health Train, The Open Healthcare Manifesto, which is a new sort of manifesto promoting the idea of open health care. I’m one of the people who signed that, and I think it’s quite an exciting time in general for the concept of new types of open online heath care.So with that, let me tell you who I’ve got on the conference call with me. I have
- Dean Stephens, who is the president and CEO of Healthline, based in San Francisco,
- Tom Eng, who is the Chairman of Healia, based up in Seattle, and
- Chini Krishnan, who is the CEO and founder of Vimo.
And the good news here is that Vimo was until very recently called Healthia, but for the context of this conversation, thank God, changed it’s name. [laughter] And I had to let Chini come in because when I went to visit Vimo they gave me a T-shirt. And I’ll be expecting the other two of you guys to be sending one along soon. [laughter]Now with that, I want you each to give a brief introduction to your company.
In no particular order, we’ll start with you, Dean. Tell us a bit about Healthline.
Matthew, I appreciate you organizing this podcast. It’s great that
you’re pushing the envelope around what’s going on to improve health
information search online. Healthline
is a company that has developed a lot of significant technology around
search and navigation. What we’re trying to do is connect the dots for
people who want to go online and have a high-level question about a
particular disease topic, to help them navigate that disease topic to
many, many other concepts related to that topic, and ultimately into a
decision format where they can make a decision around what should they
do, around what the treatment options are, what type of physician
should they go to, and ultimately, take better care of themselves. But
also know where to go in the health system for better health care.
Matthew: Do you want to say a couple words about the type of user experience at Healthline?
With Healthline we’re looking to have people not just use a search box
to try to identify what are the results that they should be trying to
find on a topic, but to get them out of the search box and into other
ways of navigating the world of health information. We have these tools
called health maps, for example, that are created by medical
professionals to help guide people through very complex diseases to
topics that are relevant to that disease.
We also use what we
call query refinement tools to help take a topic and break it down into
its component parts so that people can refresh the results that they’re
looking for on a particular topic.
We also then branch people
into what we believe are highly vetted very well-written articles,
usually by physicians. And we bring that information in context with
what they’re searching. But we also offer the people the ability to
save that content, be able to comment on it, tag it with information
that they can then organize and send off to their loved ones or others
that they might be searching for.
We have learned that more than
a quarter of people that are online searching for health information
are actually doing it for other people, not just for themselves. In
that kind of scenario we’re trying to provide tools for people to
organize the health information world in a way that they can actually
help others find and access the information they’re looking for.
Matthew: That’s great. Now, Tom, Healia
has a slightly different approach. And I want to compare and contrast
in a minute. Why don’t you tell me a bit about how Healia started and
your technique for health care search?
Sure, I’d be happy to do that. There’s a couple of things that we do
and focus on, which we believe is fairly differentiated in the
marketplace. One is the quality of search results, and second is the
ability to personalize results in a way that is meaningful and relevant
for individual users. As you may know, health information quality and
the relevance of those results and information is a very criterion for
what people are looking for in health information online.
way that we do it… Several methods are used in terms of providing
high quality results. One of the ways we do this is to use quality
algorithms that actually look at the nature of content on the page and
make some assessments of its information quality. The other methods
that we use to implement quality entail assessments of both the content
as well as other factors about the page that may indicate or correlate
with quality. In terms of the ability for us to personalize those
search results, we use other algorithms that look at the nature of the
content of a page and make some assessments of whether that particular
piece of content is more relevant for a particular audience. That is,
is it more relevant for a man versus a woman? Is it more relevant for
different age groups or different racial or ethnic groups? To date,
we’re the only search engine, health care or otherwise, that does this
kind of categorization.
The other thing that we do that is a
little bit similar to what Healthline does, but not quite, is the
ability for us to embed intelligence within the search engine, so that
it serves almost as a trusted health librarian, if you will, to help
guide consumers to the right articles or links. For example, what we do
is we use semantic technologies to suggest alternative search results,
as well as alternative search terms, to the user based on the semantic
type of the query. There’s also other things that we do that are built,
so to speak, under the hood, that allow people who may not be expert
users, allows that novice user to search as efficiently as a health
There are many other things about what we do
that I could elaborate on further, but in general, what we do again is
focus on two major things: Quality of the results, and second, the
ability of that user to personalize their search results in a way that
they can’t do elsewhere.
Great. Thanks a lot, Tom. I don’t know if you’re getting the same thing
as me, but we’re getting an echo. It all goes to show that although the
Health 2.0 movement may be vibrant, the Web 2.0 movement and its major
bits of IT, including Skype, isn’t always perfect. [laughter] Hopefully
it’ll be good enough for people to understand what we’re saying.
Chini. Tell me a bit about Vimo, because you’re not quite in the same
business as the other two. You’re more of a transaction technology at
the moment, but you’re doing some other interesting things around that.
So give us a sense of what Vimo’s doing.
Chini Krishnan: That’s exactly right,
Matthew. You pointed out quite rightly that what’s going on over the
last two or so years is a real renaissance, where the Web 2.0 movement
is meeting CDH and the search for health care and consumers’
empowerment in looking for health related information online. Now,
there are various types of information that one could look for online.
I think if what you were doing was more search related, and you wish to
look for information on cancer or heart disease or diabetes or what
have you, then search engines such as Healthline and Healia are
certainly fulfill that and take differing and different approaches to
that and I think that’s what they do.
What it is we do is of course different. We are very much focused on
the creation of a free market place for the purchase of outside
assistance products. So our view is that healing and the majority of
all health purchases are fundamentally information related. What it is
we’re doing online is to create an online free market for the purchase
of healthcare products and the healing and fundamentally information
products, we think the way to do it is to look at the comparison
shopping paradigm. That’s why when you’ll see our tagline, you’ll see
that we call ourselves the company that’s about “comparison shopping
for health”. And that’s pretty much what we do, so what you can do
today at the moment is to shop for doctors and health insurance and
HSAs and hospitals and so on and so forth. Now clearly some of those
categories have more actionable and clearer price information than
others, and our challenge and our mission is to constantly advance the
state of the art so that the information we provide you on our site is
actionable in a very direct and purchase oriented manner.
That’s a great explanation. So let me say a couple more things about
some of the distinctions I see coming from the outside between your
different organizations, different approaches. Obviously you’re all
within the same general paradigm which is that consumers, patients,
people-call them what you will, are going online in record numbers and
although instead of first wave, the stuff that I was reporting on back
at my Harris Interactive days and IFTF days, the first wave was to be
going online and looking at information from either trusted or
non-trusted sources. Increasingly, they are willing to get into the
information that they want and use that in an active way, whether it’s
to look after themselves or to buy health insurance or to go pick a
doctor or find more information about a particular type of care or
treatment. We’re really seeing a renaissance and a growth in that.
are a couple of little wrinkles I want to point out. The first one is
that Dean, you’re sort of a veteran of Health 1.0 as well as Health 2.0
in that Healthline has been around in a couple of different iterations.
When I met it back in 1998 or 1999, it was called YourDoctor.com,
and it was mostly focused in those days in creating content to be
accessed by the health maps. And you now have this kind of hybrid
between trusting content that lives in your world and content you view
in other worlds whereas Tom, over here you’re kind of more trying to
qualitatively rank content that’s not generated by you, it’s more of a
pure search function. And Chini, at Vimo you’re also introducing the
concept of consumer generated reviews and to review your doctors and
dentists, what have you. So to a certain extent, you’re all there in
the mix or the integration of content that’s personalized and in some
cases created by consumers, and then sort of moving that towards
action. Is that a fair way to describe the paradigm and what do you
want to comment on how you think that’s going to evolve over the next
year or so at your site?
Our view is that consumerism is gradually year by year becoming more
and more prominent in healthcare. Having been in the health care
industry for over 20 years, its clear to me that the consumer is being
pushed as well as pulled into much more of a central decision making
function role in health care, and the reason is in part, they are
having to take on more responsibility for paying for the purchase of
health care, meaning a higher co-pay, higher portions of the premium,
contribute to etc, etc.
So, consequently, as consumers get more
energized around, "Hey, we need to find better value for our money
because we’re paying for more or this", there is consequently a growing
demand for better quality information. And the place to go for that is
online. It is not to get it from your doctor or in the office. We all
know that the doctor is not reimbursed to educate patients, they have
very limited time. Consequently, that is not a good source for
information. That is why you see that there is a bulge of people going
online for information before they go to the doctor’s office, looking
for information, and then consequently as soon as they leave the
doctor’s office they go right back online again. There’s another bulge
of people seeking information.
So, consumerism is advancing in
health care like other industries and so you are seeing a consequent
growth in the demand for different kinds of information like Chini is
providing, and Vimo. Purchasing health insurance directly or looking up
a physician or dentist and what other indicators might be around them
as individuals locally. That’s just a consequence of consumers needing
to have to take charge because they’re having to pay more of it.
One of the things that has been kicked around a lot, of course as you
know, is this whole Web2.0 business. I think in terms of health care,
and where we’re at in the cycle of health care, and public health as
well, it might be Web2.0 for health right now in 2000, mid-2000s, but I
think that Web2.0 is going to be part of, at least, Web10.0, in that
we’re so early in the stages of this whole process that even
envisioning what is going to be possible in the future is a hard thing
and a complex issue to think about.
I think the things in the
short term that are evident by the most recent trends in health care,
public health, as well as the technology of industries, include the two
things that we really focus on. One is information quality, and the
quality of data to make informed decisions. The second, again, is the
relevancy of information. Trying to find that gem, that nugget of
information that is most relevant to our personal situation and
situations. So, I think those two things will ring true as we go
forward from Web2.0 to Web5.0 to Web10.0, whatever you want to call
these things. But, I think those two things will be pivotal in how we
frame future applications and future goals that consumers will have.
think also that, to build on what Dean had mentioned, I believe, is the
fact that health care as an industry, as you know, moves a lot less
quickly than other industries do. And as a result, sometimes that is an
advantage and sometimes it is a disadvantage. Its an advantage in that
we can learn from mistakes experienced by other industries, and learn
from them how to provide better applications and better user
experiences. Of course its a disadvantage in that sometimes we’re not
as innovative or novel in the way we frame applications or produce
products for consumers. And so at Healia, at least, what we try to do
is focus on the consumer and what the user needs are and try to provide
that compelling user experience. But I think again, going forward, that
by focusing on issues of information quality and the relevancy and
personalization of information we’ll all be successful in that regard.
Yeah, lets open up a little bit around the issue of personalization
relevancy because I think that this is really what this whole thing is
getting at. There are two things going on. One is that we are trying to
get at "what does the information mean for me in my particular
condition, in my particular family and health situation?" And the
second one is about "How do I interact with the system?"
Chinni, tell me a little bit about how you are seeing people in Vimo
start to comment, rate and talk about their doctors. Again, I can give
some other examples. There is a review site in the San Francisco bay
area called Yelp, which has been very successful reviewing restaurants.
Of course, now we have a lot of doctor reviews on it, too, which is a
competitor of yours even though you would not perhaps think of it.
Chini: We would think of them as a partner. No, I think you raise some wonderful…
Matthew: Ah, the web thing, everyone is a partner, right? There are no competitors!
Well, they are really horizontal and I think they do a lot, they do a
few things, they are good at one percent of the thing we do and they
could use a lot of the work that we have done. That aside, I mean let
us put your question in context here Matthew. I think as you look at
first of all, the rise of the consumer movement in healthcare and the
quest for information online, I mean I would kind of divide that
information into like four or five different categories.
there is originally created authorized content. I mean content created
by doctors and hospitals and various sorts of specialists that you
would consider authoritative and the definite of word on certain source
of subjects. I think that is one type of content.
The second, of
course, is the rise of search produced content where the objective
there is to give you sets of content, sets of links that are through
the specifics of the subject that are likely to be most relevant for
your needs. If you search well or have your preferences set well, then
presumably the search does it magic and you will get good results.
there is a third category of information, which what I would call
directory information about doctors, about hospitals, about health
insurance plans, about HSAs, where each of these entities is
categorized by the attributes that matter, whether it is price or
quality or the services they perform or where they are or how many beds
they have in the hospital or what have you. All of that is very
important as the user gets to the purchase point and indeed exemplifies
a lot of the basic information that we show.
Then there is a
fourth category of information, which is user created information,
which is users talking to other users, doing reviews, creating
communities and sharing their informal impressions with each other.
That is useful because users, only users, can fulfill a void, a certain
type of void. For example, we tell each other that look this so and so
doctor may not look as good on paper but if you want this specific
procedure than he is really the best out there and there is really no
one comparable to him or point out various softer things about
languages the doctor may speak at the office or the hassles associated
with that or what have you.
These are four smaller features that
would ultimately matter to consumers as they take the information and
then attempt to make this information actionable. Our view at Vimo is
that we are doing everything possible to enable user communication. We
allow users to review and create communities of their own, talk to each
other. We offer users all sorts of alerts and all sorts of proactive
push-up dates on things they care about.
So for example, if you
were to say look here are my three doctors and I would like to stay
abreast of those doctors and we would let you know if the doctor for
example changed their address or picked up or dropped an insurance
carrier, or for example, got into some sort of disciplinary action that
changed your outlook on that doctor and we just see information being
delivered in more push, community relevant, oriented ways as being
critical to the empowerment of consumers.
Matthew: You are getting at a really
important point there, especially with the sort of bevy of information
about physicians coming both from structured databases such as
disciplinary databases and medical licensing but also information from
consumers about whether or not the receptionist was rude to them or
whether it is a nice place to wait and the stuff that really matters.
If you look at people’s, not so much enjoyment of but, use of
healthcare services as a whole, all of that sort of stuff matters. In
my mind there are two major problems in some ways that sort of
Health2.0 movement is going to run into or is running into.
One is that the other side of healthcare data information which is
when you’re making a selection amongst different types of procedures
and definitely between different providers, a lot of times the
information you want to know—and I always use my left knee and my
skiing injury as my example with you—the information that you actually
want to know is “what proportion of people having visited this knee
surgeon for this type of ACL repair actually went back skiing again a
year later?” And that kind of outcome is which is highly specific to
individual providers and individual conditions, is quite often hard to
find.And then on a wider scale, I think, Dean and Tom, you’ve
both had experience with this and I’d like to know where you think this
is heading, is that you can talk about personalization tools and there
are obviously healthcare systems, we have Kaiser in this area and Palo
Alto Medical Foundation, who are providing information from their
systems out to their patients. But the vast majority of healthcare
organizations in this country are still really way behind the curve in
providing information about what happened to their patients, and to
people in the community. How do you see these two things starting to
play out, because I can see a real possibility that faced with
organizations like yours and the power of the web, what if healthcare
organizations and providers and health plans are going to start wanting
to duck under the covers rather than actually meet this head on? Is
that how it’s going to start playing out from the healthcare
Tom: You have an excellent point,
Matthew. It brings up a couple of thoughts in my mind. One, let’s just
step back a little bit. I think in terms of the healthcare provider
organizations and how they react to this whole, all these societal
trends if you will, in consumerism and equal access to data that was
traditionally hidden from their views, I think what is happening now is
that, from my read of the industry, is that most of these
organizations, at least the major ones, have recognized that is an
unstoppable trend and they need to open up a lot of those kinds of
resources and data. But I think the thing to keep in mind as well as
they start doing this and provide more services to consumers and be
more open with them as in terms of sharing information, the thing to
keep in mind that I think is very important is that the fact that when
we talk about outcomes data, as you know there’s tremendous variation.
Variation in both outcomes for a specific procedure and geographic
regions in that state, different demographic groups, etc. One thing
that we don’t have right now, no one has right now at disposal, is how
do you relate those kinds of things to people on an individual level?
I would hazard to guess, that we do not collect the data that could be
used to really individualize recommendations for a particular procedure
or medications even. This whole promise of personalizing medicine,
we’re only at the very early, early stages of that, and until we get to
the point that there is actually technologies that can actually collect
information on a very refined individual level, I think that the
outcome’s there, the promise of that will not pan out, at least in the
near future. So I think that’s something we need to keep in mind.
I think the other point I want to make is in hearing a few folks
talk about what they’re doing and what they perceive of as in the
industry and trends, is the fact that I think sometimes we may be
putting undue emphasis on focusing decision making around your
services. What I mean by that is I would guess that a lot of
decision-making made on a daily basis by individuals is not made in the
context of a healthcare visit. It’s actually made in the context of
everyday life. For example, decisions about what you do, whether you
need to take the stairs or the escalator or elevator on a daily basis,
or what you eat, for example. All of those are health-related decisions
that are made almost transparently and routinely by people that I think
where health search and other kinds of information would be extremely
valuable to them. But, so the question here is how do we ensure that
whether the decisions made by people in the health care context are
also aware of the other decisions, the multiple decisions that are made
outside the healthcare context. So I’d like to put those ideas out to
people as well for them to think about.
That’s great, and I can tell you have that public health background,
Tom, because you’re thinking big thoughts about how people should look
after their general healthcare. I’m always concerned that we have these
great ideas about public health and great ideas about health
information and all the rest of it, but we try to put them into
practice and the healthcare system swallows it up and kind of spits it
out the way it’s always done, which is why we end up with things like
practice and outcome variations as you mentioned.
you’ve been around in this business for a while. What’s your sense of
how, if you like, the end undifferentiated mass of American
providers… I’m not talking about the kind of outliers like the
Cleveland Clinic or Kaiser, but the typical community hospitals and
physicians, are going to deal in the future with things like
Healthline, Vimo and Healia?
I think what we’re seeing, particularly by the larger health care
organizations, and this isn’t just the hospitals and health systems,
but if you look at the major payers, the big health plans, and this
includes the federal government, they’re finally starting to walk the
talk. They’ve talked about providing more information to the public for
them to make better decisions, but I think they’re now serious about
providing much more what they call transparency to quality and pricing.
Tom’s point, you’re not going to be able to differentiate very easily
one primary care internist versus another, but you should be able to
determine, because the data is available, whether that orthopedic
surgeon is better at doing knees than at doing hips. You also should be
able to determine whether Sequoia Hospital, how that hospital in the
Bay Area, does on heart surgery, let’s say, compared to local
competitors Mills Peninsula or Stanford.
The data is now
becoming publicly available around those types of procedures. They’re
very expensive. They’re not always elective. Information can now get
into the hands, in a transparent way, to consumers through health
search and through other sites like Vimo, where you can access
information to help steer you a likely better provider that might give
you a better outcome than you randomly picking a physician or relying
on your local physician to give you advice.
The thing we’ve been seeing, and it’s also showing up through health search, and this is at Google
as well as the vertical health searches, is that there is now some
efforts to move people to better quality services, regionally as well
as nationally and internationally. While that won’t be a large
percentage of the people, local health care will be locally consumed,
there is going to be a portion of people who are willing to travel for
better health care.
In the old world that was going to
Rochester, Minnesota to the Mayo Clinic or going to Cleveland for the
Cleveland Clinic. I think you’re going to see a lot more movement
nationally and internationally to better providers based on the quality
of information and the pricing of that information that’s going to be
now transparent to the community at large through the Internet.
Matthew: It seems to me that you’re
hinting at there is that you’re going to seeing an international trade
in medicine, certainly a national trade, and there adjustment that will
follow in regional trends in health care. So it no longer is just
Gerald Ford going to the Mayo Clinic, but instead it’s people comparing
what’s happening and what kind of activities are going on, what kind of
services are being delivered a state or two over, or maybe across the
border in Canada or India or wherever else.I can see that
starting to pick up, and obviously people are getting smarter about
better things like better outcomes, different approaches to different
conditions and the rest of it. The more information is delivered about
that, the more you’re going to see people starting to vote with their
feet. And also employers in some cases, and payers. And this isn’t, by
the way, just American payers. There have been some foreign payers
which have been helping people go across borders to get different types
of care. And a lot of that is just the flip side of giving people more
information about what’s going on.I think there’s one thing we
should mention… You brought up the dreaded word of "Google," so I
think we should talk a little bit in the last sort of fifteen minutes
of the conversation about how the three of you perceive that your
business model is going to develop, and how the business of online
health care is going to interact with the business of off-line heath
care. And by that I mean not so much what the effect’s going to be, but
more of how is the money flow going to work, and how are you guys going
to make money, and how is it going to change the way that healthcare
organizations see their business flows?I assume being the
reason you guys got a second round of restart funding several years
after your first launch, and, both Tom and Chini, I assume the reason
you guys got your venture capital funding is not because venture
capitalists in Silicon Valley are known for charitable acts, or at
least not charitable acts with their businesses. [chuckle]. They saw
the IPO results from Google and some of the others and thought well,
that looks like a pretty good business there.So, give me a
quick sense of where you think in a year to two years out you
individual business models and the business models of companies like
yours will be. What is the business model that you all think will
dominate Health2.0 in the next 12 to 18 months?
Chini: Matthew, we have made a very
specific bet, and that is that if you look at our business model, you
know we really are all about comparison shopping and the way our
business model works is that when consumers shop for specific sorts of
services, like health insurance as an example, we turn around and refer
them to real brokers or real carriers that would then compete for their
business. In that sense we are really a bridge between the online and
the offline world. Our view is that this is a very powerful business
model, and if you look at a lot of excitement around the Internet,
centered around lead-based businesses, affiliate marketing,
cost-per-acquisition based models etc., it’s a hugely powerful trend in
the entire business of search marketing as a whole and of course health
in particular.The other thing we like about this model is that
we see ourselves at the cusp of a huge market, and being able to
execute in a very efficient manner. We think that referral-based
business models in general and health 2.0 are going to be extremely
powerful and would rival more general advertisement-based businesses
over time because they’re more actionable.
This is Dean, following up on Chini’s comments. I think all the web 2.0
companies, both in healthcare or not in healthcare, have learned the
lessons of the Internet bubble days where advertising was used as a
primary source. I think as we’ve built our company to be not only a dot
com website, but also to have the technology that can be modularized or
made into components that be licensed to other organizations that also
have consumers as healthcare customers and constituents, we see a world
We will always have advertising and the match making
of putting buyers and sellers together and that being monetized, but
that will evolve into having also strong components in continued
technology, licensing to calls for action and, as Chini was saying,
referral relationships that can be monetized.
You’ll see in the
future companies are going to have diversified revenue streams and be
flexible in the marketplace where partnerships will be forged between a
company like ours and network partners that can monetize the customers
in ways that go beyond advertising depending on the model of the
In terms of business models going forward for health 2.0, I think those
have evolved with time as they have with the 1.0 versions. I think I
mentioned earlier one of the advantages of healthcare being somewhat
slower to adopt information technology and web 2.0, if you will, is
that we learn from other industries what works and what doesn’t.
Clearly Google has shown that advertising does work in the search
engine area. Going forward, obviously that would be one of the major
pivots from which we would build a business.
But we’re really
focused on building our business and our growth with partners–partners
to represent healthcare organizations to employer groups, to websites,
and health groups. Our focus is to build value and try to meet the
business needs of those groups, and I think by working with them we can
grow and build a reliable business.
A word of caution here, as
all of us know: as we evolve, and as health 2.0 and 3.0 evolve, those
business models will also evolve, so we need to be quick and nimble and
conscious of those market trends. We are certainly looking at those
trends and adapting to those business models as we go forward.
Well, my next question is leading off what Tom just said. In five years
time, do you think there will be a separate web based healthcare online
business segment, or will this all be subsumed back into the offerings
of the major healthcare players and the insurance and provider side? In
other words I’m asking you guys if your business is going to go away or
where you are going to end up?
Well, let me make another point here that I think is also important. I
think there are going to be other offline businesses that get into the
online healthcare stakes with consumers.
Take for one example
the publishers – publishers of medical encyclopedias, of journals, of
other services that have been offered just in the offline world. Those
companies, some of which are big international players like one of our
investors who is looking at moving their resources more online and more
looking at the consumers as a new segment to sell their services to.
And, so I think one of things that is going to happen here that we
haven’t seen yet is the introduction of more players in the online
health market with services that may have always tried to keep off the
web, away from the consumer, but now see that as an opportunity, given
the web, to allow all kinds of things to occur, so that’s one.
then two, in terms of are there going to be sustainable businesses that
just are primarily on the web and independent of the major traditional
powers of healthcare be it the plans or be it health systems, five
years is a long way down the road here, Matthew, but I would venture to
say yes that we will be sustainable online businesses because I think
what’s happening is if you look just at the financial institutions
market, people are moving online. They do most of their banking online,
and what’s going to happen is that if healthcare consumption, we see a
lot of this online efforts by consumers in the future too. Not
necessarily just about, we’re not just talking about buying physician
services or hospital services, but the world of people making buying
decisions, and financing it, and all of it on the web in terms of all
of their beauty needs, and home health care products, and measurement
testing, and vitamins, and supplements. All that will be purchased
online. And a lot of that will be monitored online. Personal health
records. I think you’ll see that the consumers will not… no longer
rely on the physician. The owner of the medical record… It’s going to
move to the person, to the individual person. It will be an online
service. Those are just some thoughts about where I think the future
I’m going to put my perspective on this question. I think not only,
Matthew, will there be a viable health 2.0 business segment five years
from now. I would say reasonably there will be a viable segment for
that for 50 years.
And I think again we are at just at the very
embryonic stages of where we are going in terms of the marriage of
technology, specifically information technology, and health and public
health, and so I think the tradition has been, history has shown us
that, the whole slew of innovative ideas and innovative companies that
address areas and functionalities and tools and products that big
traditional companies have not done well, traditionally have not done
well in, so I think that innovation as it has in the history, rests
with the small companies, start-ups, and I think that healthcare is not
going to be any different than other industries in that regard, so I
see not only a very rosy picture, but I see that it is going to explode
beyond our imagination in 50 years from now.
So I essentially concur with both Dean and Tom. The only thing that I
thought might be interesting to add there is I’m also seeing the
opposite trend, which is traditional providers and health insurers
providing more and more specific functions online, so in that sense, I
think the nation of online technology and Internet technology both from
convenience standpoints as well as research and purchase efficiency
standpoints for all of us here to make the healthcare delivery system
as a whole more efficient is I think an inevitable trend and pretty
irreversible. I mean there’s already multi-million dollar companies out
there whose sole charter is to provide information online to consumers
and various others, so I think it’s going to be a huge category, it’s
going to be a standup, separate, distinct category that various
analysts and so on in four to five years time are going to call a
Matthew: Interesting to hear. I fully
expected you to go the other way, about the fact that big players would
by default would have to co-op Health2.0. You might argue that’s what
happened to the emerging consumer-rated health plans. Definity Health,
Lumenos and others were all pretty quickly sucked up by the big
traditional health plans who realized that they had a new business
model they had to get a hold of pretty quick. The cynical question
would be, are you going to be independent? Are you all going to be part
of some bigger health plan or health organization? Or are you, like
everyone else in Silicon Valley, going to end up working for Google?
You guys don’t have to answer that last one!
Well, there’s an anecdote, Matthew, that Google was offered ten million
dollars by Microsoft, and they turned them down, and that was a good
Matthew: Not for Microsoft, it wasn’t.
Chini: For Google it was.
Absolutely. Great. Let’s just close with a questions about that. Let’s
just talk about Google for a second here, because Google has got its
Google Co-op, which is in some ways directly competing with at least
Healia and Healthline. There’s a lot of speculation about what other
features that Google, Yahoo and Microsoft and others might be adding.
Traditionally, they brought in a lot of other companies to do that. It
seems that every time I look around there’s another Health 2.0 company.
How long do you think the period we have now, where there are new
venture back players working out the technology and working out the
market is going to go on? And how long before it’s going to do what’s
happening to the other aspects the first ground of the web and is now
starting to happen in search with Google, that you start to see really
dominant players in that sector? Do you think we have six months, two
years or five years while this sorts itself out? I’ll go around to the
three of you and then it’ll be the closing comment. Dean?
think there’s it’s hard to say whether there’s a two year or five year
shake out. We’ve got Revolution Health Care Group that’s going to be
announcing their portal I think fairly soon and everybody’s kind of
anticipation what’s Revolution going to do? It’s like the second coming
And WebMD I’m sure looks at them as a direct competitor; it’s hard to
gauge how that will impact them. Healthcare is a two trillion dollar
business. It’s approaching two trillion just in the United States alone
and it’s in a major crisis. So I think there’s a tremendous opportunity
to drive billions of dollars, hundreds of billions of dollars, of
inefficiency out of this industry. It’s not only here but Japan, China,
England, Canada, all these countries are also facing healthcare crises
right now. So I think there’s going to be a demand as a lot of new
companies come in and occupy niches or spaces that need to be addressed
with new, innovative ideas. So I think there’s going to be a
proliferation of more companies, I think they’re going to get more
focused on very niched aspects of transactions in healthcare, and
different types of services that can be moved from offline to online to
help us take better care of ourselves. But I see I don’t see any
consolidation or real dominance in healthcare for some time by a few
players. We’ve only seen it really in one industry and that’s the
health plan aspect where there’s been some definite concentration in
that industry. But because healthcare is such a locally driven service,
you’re going to have a very disaggregated, unorganized, disenfranchised
world with 50 million uninsured Americans running around looking for
services. So a complex world needs a lot of different answers.
Matthew: Great. Tom?
That’s an excellent point, Dean. I’d like to emphasize a couple of
those. I think in terms of consolidation in the industry, I think
there’ll be some consolidation of certain niche areas perhaps but again
healthcare and health in general is as you know not only the largest
sector of the US GDP but probably the world’s GDP. I think I’ve seen
some predictions that in about ten years or so it’s going to be a four
trillion dollar industry in the US alone so it’s going to escalate and
when the stakes are that high there will be some interesting innovators
in that area.
I think another thing that we always focus on is
to be successful in terms of our competitors, be it Google or other
companies as well, what we do that we think is going to be very
important to us and for all small technology companies and businesses
is by focusing on what the user needs are. So at Healia we have a
fanatical focus on consumers, what they need, providing the best
experience that we can. And by focusing on that I think eventually
we’ll be successful in that regard.
So I’d like to note that for
any innovator or entrepreneur thinking about the health business, I
think by focusing on those things and in our case also by focusing on
the quality of what we do as well as the ability for us to personalize
the experience for users I think we’ll all do better by looking at
Matthew: Great. Chini, what do you think is going to be the solution to the consolidation problem in the next two years?
Chini: Well I think that in addition
to what Dean and Tom said, which I think makes sense, I think that the
timing of any shake-out or like given is always notoriously hard to
predict. I think if and when it were to occur it would be very much
correlated to the gentle macroeconomic conditions. Capital in general
getting tighter or not. I think that we are at least a few years away
from such a situation. That’s number one but number two regardless of
the fact that I think there are new companies popping up every day,
which I think is a good thing, in the end you got to have a strong
business model and provide genuine, sustainable, real value to your
core customer and all the other issues will sort themselves out. And
the trend of online search being a good thing, which of course is
exemplified by Google’s success, in the end is a great thing for
Matthew: That’s great and I’m totally
with you. I think that probably got lost the last time around in the
Web 1.0 boom if you want to call it that. Where people kind of forgot
about the fact that you were actually trying to build something that
would sell and get some money for. And as Tom mentioned, a great user
experience helped you in doing that rather than just having a nice
idea. I think people are much more realistic this time around. We’re
also on the second curve of the hype cycle now and people are much more
understanding about and realistic about the potentially huge impact
these research tools, these transaction tools are going to have. So I
think we’re on the cusp of something really exciting and I’ll be
watching this carefully and of course if any of you guys have got the
perfect business model for The Health Care Blog, I’d like to hear about
it. [laughter]OK, with that we’re going to wrap. I’d like to
thank Dean Stevens from Healthline, Tom Eng from Healia, and Chini
Krishnan from Vimo. Thank you all for waiting through that interesting
technical difficulty when you couldn’t hear what I the hell I was
saying. Especially thanks to you Chini for taking over as the moderator
while I was writing you questions online.
Chini: No problem. I appreciate you taking the time to put this together. I think it’s very exciting.
Great. I hope next time we won’t have this Web 2.0 technical
difficulties. By the time Web 3.0 comes around, we’ll be laughing about
this one. With that, I want to thank you very much and I look forward
to meeting you all again soon.