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Revolution Health looking to sell?

Steve Case’s Revolution Health hasn’t quite lived up to the promise trumpeted in early days. Recent rounds of layoffs, changes in overall strategy, and the hiring of an investment bank to explore sales lead one to think that Revolution is closer to circling the drain that it is carrying the banner of a new approach to health care focused on the consumer.

However, one recent rumor about a merger between Glam and Revolution Health reminds us of the direction that health publishing (and potentially health care delivery) are likely to go if we believe that consumer decision-making is important.

As drug company ad budgets have buoyed Madison Avenue and increasingly entered consumer lexicons, women are important health care decision makers and natural combinations between women’s interests and health decision-making could start to chip away at the insurance- and pharma/device- dominated M&A plays, to add further variety to the technology players already rattling sabers at the gates.

The combination of consumer (women’s) focus and technology should bring enhanced openness, interoperability, and interesting new combinations to the traditionally stodgy and actuarial/engineering/statistics driven approaches that currently dominate the space. Outside of Glam, some non-traditional interests:

    * Hearst Media: Guidelines and other health publishing    * Microsoft: Vertical search (Medstory) and Electronic records (HealthVault)    * Google: Electronic records (GoogleHealth)

Health, with its hold on nearly 20 percent of the U.S. economy, is increasingly being explored by nontraditional interests. Seeing those players start to exert their interests in the field will make for some interesting dance partners and joint ventures in the time to come.

Vijay Goel is a doctor and former McKinsey & Co. consultant based in Los Angeles. He blogs regularly at Consumer-focused Healthcare.

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8 replies »

  1. We are making a difference. We’re saving our members hundreds of millions of dollars in supplemental healthcare benefits since 1992. Our company offers a service that is helping individuals and families across the country save precious dollars on their costly healthcare needs.

  2. I agree with previous postings that Rev Health tried to take on too much. What’s more, they just didn’t have the health care expertise to excecute well.
    I think all people really need is a simple way to find quality health care providers. See http://www.WhereToFindCare.com

  3. Vijay,
    Why do you think they kept trying a new flavor every month? Because last month flavors obviously were not working from the metrics perspective… Like you know, to be able to sell things for more than they cost to make.
    You are right that constant reorgs did not help stay focused. But contrast that with AOL’s early days when all mistakes were paid for by those $2.95 / hour connect charge cash cow. Or more recently Google with their massive PPC cash cow. Where are Health 2.0 cash cows?
    The fact that Revolution Health sifted through so many ideas with so much money says something about the economics of the space… I agree that greater focus on specific ideas might fare better, but the bottom line, something has got to give and we have not seen new economics that work. For the numbers on how it does not work today, look here:
    http://trusted.md/blog/hippocrates/2008/07/14/nephrologist_quits_medicine_to_blog_full_time_personal_vs_professional_use_of_social_media

    Perhaps the most profitable Health 2.0 business is the Health 2.0 conference 🙂

  4. Gregg,
    I do think the non-traditional interests should be welcomed to the space. Healthcare has been the playground of a very few to date…and its clear from the current situation that they don’t have the answers.
    My personal belief is that the incentives in the space are all wrong if we want to encourage healthy care vs. sick care. And “healthy” means something very different to most consumers than the doctors and administrators making paternalistic decisions for them. Alternate interests will allow consumers to align to platforms with different incentives.
    Dmitriy, I think your assessment is off-base. Revolution Health, with its string of strategic changes and layoffs/reorganizations never came close to executing anything revolutionary in a meaningful way. The company couldn’t decide if it was a holding company or operating co. Changes in management created “flavor of the month” approaches that got lost in the portal. Layoffs and reorgs created a constant change in strategic direction and hurt morale. You’re right in that they tried everything, but I would characterize it more as throwing spaghetti against the wall than sticking to their guns and having a strong set of insights and point of view. What did Revolution Health stand for other than saying that they were “revolutionary”?
    Tcoyote hit it on the head in saying this was a landgrab rather than a product introduction.
    If anything, this is a good reminder that disruptive change is about building a beachhead in Normandy rather than a distributed attack across all of Europe. There are beachheads to be taken…remember our current monstrosity evolved over 40 years and it will take decades to unravel and build an alternative. What we need is for the alternatives to take root and begin to prosper with evangelical followings.

  5. Anyone hyping “Health 2.0” should take note.
    If anything, Revolution Health troubles demonstrate serious problems with the sector rather the particular company. The hypothesis that the “Web 2.0” tech is somehow going to create viable new business opportunities in eHealth simply has not panned out.
    Revolution Health systematically tried almost every idea out there. Yet, they seem to have proven Warren Buffet’s quote that when a great management team meets a business with bad economics, the team invariably loses. The economics of this sector for the lack of better terms sucks.
    I am sure many people will disagree and I wish them luck proving otherwise.

  6. Vijay: Nice piece, perspective and levity. Why not welcome the participation of those “non traditional interests”? Certainly the SEC fits the profile with its May decision supporting proxy votes declaring a health care reform policy position. Why not get the entire food chain on the record? Lets turn on the lights?

  7. Do not have independent information, but would not be surprised if Rev Health flamed out. It’s “business plan” was a dogs breakfast of stale ideas redeemed solely by Steve Case’s formidable energy and ton of money itching to be wasted.
    Rev Health felt form inception a lot like a decade earlier catastrophic failure: Jim Clark’s Healtheon. People who make a load of money early in their careers literally pulse with testosterone, and look at healthcare like marketers used to look at China (if we could get every Chinese to drink a six pack of our stuff a week, etc.), a vast continent itching to be tamed by their unique genius.
    Listen to Case’s interview linked to this post in EconHealth- a textbook case of testerone poisoning- “iconic platform, must-buy network, category killer, consumer brand like Nike or Coca Cola.” Sheesh! Half-baked blather by a very smart person about an industry he neglected to do his homework enough to learn before he set out to “revolutionize” it.
    More like conquering Russia in the winter. Go home, Napoleon. Bring us something we can use.

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