The anti-Dimitriy!

Certain people have accused Health 2.0 of being a bubble. Others of us have responded that it’s not. I don’t think either side in that argument has claimed that health care needs a bubble. But Forbes columnist Sramana Mitra thinks that a tech bubble in health care would be a great thing. In particular it would produce many more AthenaHealths and PatientsLikeMes

Certainly a provocative read!

15 replies »

  1. Thanks. I do see a lot healt Women of interesting and innovative tools entering the marketspace in “Health 2.0,” like health-focused search engines and health social networks. But I either see few people using them (compared to alternatives), or if lots of people are using them, they have absolutely zero business plan.

  2. I was there during the last e-Health bubble and a part of one of the companies of the time, drkoop.com, in 1999.
    For the record, this is looking a lot like those times. Back then it was the EMR. Now it’s the PHR. Back then it was about turning page views. Today it’s the same. Back then, the valuations on these companies was insane. I don’t see the difference today.
    I do see a lot of interesting and innovative tools entering the marketspace in “Health 2.0,” like health-focused search engines and health social networks. But I either see few people using them (compared to alternatives), or if lots of people are using them, they have absolutely zero business plan.
    In fact, many of the business plans in this space can still be summarized by the South Park underpants gnomes:
    1. Gather together millions of people/page views.
    2. ???
    3. Profit!
    And surprisingly, otherwise smart VC firms are still funding these cash sucking machines.
    Just my two cents…

  3. @Matthew: Puuuhlese! It is pretty clear who you are referring to. I have not promised anything to you and the things happening under the radar are none of your business.

  4. Why does Dmitriy think I was referring to him when I was clearly referring to Dimitriy? What an ego! But we await great things from Dmitriy this year…as promised last year! Ha, ha

  5. The logic here escapes me. We have a convoluted, wasteful healthcare system, where doctors cannot get paid properly and patients cannot get proper care. So what do we do? We build new companies to help doctors and patients navigate the broken system. Wouldn’t it make more sense to fix the system so that a patient can get proper care without a Health 2.0 fancy navigation system and doctors can get paid without having to go through a series of ever more complex hoops?
    Everybody is now talking about the need for Healthcare IT in physician offices and hospitals. How about Payer IT? Shouldn’t we demand that payers adopt better IT, so the entire reimbursement system is simple and straightforward. How about standardization of claim adjudication systems and fee schedules? How about paying for coordination of care instead of the current procedure driven model?
    Someone needs the courage and determination to take a look at the entire health insurance sector and figure out its exact contribution to better, more affordable care, other than funneling large amounts of money out of the system. Instead, we are investing in new companies that are extracting even more wealth out of the healthcare sector by making both doctors and patients pay for services that should not be needed.
    It’s like having a broken highway system and instead of fixing the pavement, we are all busy investing in R&D for new car models that can smoothly drive over potholes.

  6. Wendell, thanks for your comments. I agree with everything you said as well. If you want to dig deeper into the real story behind “Health 2.0” and what are the REAL dynamics and outlook for this space I recommend reviewing the posts from my blog over from now back to the original post re: Revolution:
    IMHO, what I published on my blog requires no further elaboration. I view my mission educating people about bubbles largely completed and ready to focus on different projects this year.

  7. Верный Дмитрий: Thanks for the reference to your note. Skimmed it and tend to agree, certainly in regard to Revolution Health.
    An aside regarding that is that Steve Case is the epitome of a consumer goods huckster who randomly happened to latch onto AOL and rode it to frightening bubbledom by pure luck of the draw.
    Smart, money-oriented individual, but consumer huckster at heart. His foray into healthcare was well-intentioned – based on frustration of seeking treatment for a terminally-ill brother – but based on the nonsense that brought him his fortune. Much like AOL’s combination with Time-Warner that has brought an otherwise vibrant company to its knees and lost tens of billions of dollars in retirement savings to many, Revolution Health is in fact a net liability, so its equity is already less than zero.
    I will take a look at the articles you reference in your note.

  8. Wendell,
    Months ago I wrote a post, explaining what Health 2.0 REALLY is and proposed my own defintion: Revolution Health: Heralding the Demise of “Health 2.0”?.
    This should tell you everything you need to know. Health 2.0 is an artificial construct that has no meaning in the real world. Just like Athena is just a debt collection agency, most other “Health 2.0” companies can be boiled down to simple meat-and-potatoes terms, but that would leave nothing useful to contribute for people like Mr. Holt, would it?
    No I am not False Dmitriy, I am True Dmitriy. LOL. Yes, I am Russion-speaking, Ukrainian-born Jewish American.

  9. I think Mr. Holt provides a good service with this web site, but I do not understand what Health 2.0 is even having read the Health 2.0 FAQ. What is it?
    Dmitriy: Вы русскйи? Вы Лжедмитрий?
    Don’t know the history of this disagreement. AthenaHealth is effectively a debt collection agency. What is new and improved about that? Nothing wrong with what it does, but that is it.

  10. @Brian Klepper:
    I think it is pretty clear that Health 2.0 bubble is in the earliest stages of bursting. Revolution Health is the most spectacular flameout, but we are already seeing the next tier of disappointing outcomes (DailyStrength, Xoova, etc). A lot more are struggling with cash balance running low and no revenue coming in – time will clear them out. In 2009 the term “Web 2.0” is becoming toxic in technology community and “Health 2.0” will follow soon.
    You are right there is lots of opportunity in rejiggering the $2.6 trillion healthcare system. However this has nothing to do with “Health 2.0”. Each of the sub-segments you mention has its own dynamics and has been slowly and steadily adopting web technologies for years. “Web 2.0” can have only the very minimal impact, as the real driving forces of impact are elsewhere: regulations, incentives, consumer & provider behavior.
    Let me put it this way. Wikis or wisdom of the crowd will not magically re-invent pay-for-performance or auto-adjudication. New incentives and a lot of technology gruntwork will.
    Very good points – giving the reality check on real drivers. Still I would question how much impact the web technology will have in “connecting the dots”, how fast it will happen and will anybody be able to make money on it.
    @Punit: How are the tools you mention are different from “simple” collaboration technologies? People are mostly innovating in the ways to beat the same dead horse. How has any of these social health technologies met the hype?
    P.S. Ironically, this year I have planned to stop spending time commenting on Health 2.0, aka beating the dead horse. Just when I thought I was out, they pull me back in!

  11. Bubbles emerge in markets when the underlying technology cannot sustain the marketing hype. This might be the case if Health 2.0 were to consist only of simple collaboration technologies like blogs and wikis, however, a whole new wave of social technologies (like connotea.org and jumpernetworks.com) are emerging that will expand the reach of Health 2.0 collaboration to actually begin to meet some of the hype.

  12. I think that we are on the cusp of a wave healthcare innovation. However, entrepreneurs in the healthcare consumer space do still face legal and regulatory hurdles that will limit the size and scope of their businesses. So we may not see the bubble-like activity Sramana Mitra advocates.
    I do agree with Brian that there is a “blue ocean” sized opportunity in helping the healthcare system become more efficient. When web services start connecting the dots between doctors, hospitals and insurance companies and build successful businesses we’ll see acquisitions, mergers and perhaps even a few IPOs.
    Plug: feel free to read my post on this from a couple of days back, “Building a Healthcare Bubble”, http://remakinghealthcare.com.

  13. Hi Brian
    Quite agree
    I think we are only scratching the surface of what will be done
    We run a site called the icarecafe which provides a space for patients and caregivers to share information and ideas
    It seems to be working really well so far
    Best wishes

  14. The ventures described by Ms. Mitra are bubbles only if it is a foregone conclusion that they’ll burst. But there is no reason to believe that, in an industry as rich in market vacuums as health care is, these are flash-in-the-pan opportunities.
    As a class, I’ll admit that I’m less optimistic about ventures that are social in nature because they typically must find funding streams that are not from the users. Not impossible, as , like PatientsLikeMe and Sermo have shown, but often difficult.
    On the other hand, in an industry where half or more of all cost – $2.6 trillion in 2009 – is waste, ventures that focus on pricing/performance transparency, streamlining transactional processes and aggregating data/knowledge to provide decision support offer huge potential. In an extension of Ms. Mitra’s example with AthenaHealth, consider the fact that, in the era of PayPal and 98 percent auto-adjudication of claims, hospital and physician Days in Accounts Receivable still are running 55 and 36, respectively. What is the opportunity to drive those down to 3 or 4 days. Or, as anyone who has ever glanced at the Dartmouth Atlas wonders, what’s the business opportunity associated with creating point of care tools that actually reduce unwarranted variation by helping clinicians always make the best decisions.
    Health 2.0 (or Web-Based Health or whatever you want to call it) is still in its infancy, but it is already organically reaching into every area of health care business. Supply chain firms and hospitals are using Web-based tools to aggregate information about the value of products they sell or need. Hospitalist firms are using them to more efficiently manage the schedules and care decisions of their clinicians. Clinic firms are using them to bring together information and to make it available to their patients.
    Web-based processes cost a fraction of what client-server transactions do, and facilitate a far greater reach across traditional organizational boundaries.
    Ms. Mitra is right. The foundational tools are already here and the opportunities, particularly in health care, are, for the most part, immense and as yet unexploited.

  15. RULE #1: Learn to spell my name right
    RULE #2: If you want to use terms like “anti-Dimitriy”, understand the historic context:
    RULE #3: When are you people going to learn? Bubbles lead to net destruction of wealth and are great mostly for assorted scam artists who use irrational exuberance to cover up the lack of the tangible value actually created. What is the net $$$ value generated from Health 2.0? No, Athena does not count, it was started before your fad. Seems like Health 2.0 conference is the only successful business in this space – congrats on milking the hype.
    BONUS RULE: Forbes should stop hiring clueless and conflicted people to write op-eds. Instead pay attention to real journalism that still appears there, like the recent piece on Venture Capital’s Coming Collapse
    JUST FOR LAUGHS: TheOnion also thinks bubbles are good for the economy. I think Health 2.0 would fit right at home with the list they are proposing here: Recession-Plagued Nation Demands New Bubble To Invest In
    FINAL NOTE: Good luck with IPOs and M&As!