HEALTHEON/WEBMD: E-Health Dominance Still Questioned
Despite "acquiring and partnering with dozens of companies to become a Grand Central Station of sorts for the transmission of health care paperwork over the Internet," Healtheon/WebMD's ability to streamline its many units into "a single, viable product line" remains unclear. Although the Atlanta-based company says it is linked to some 80,000 physicians, the number who are paying for its online insurance claim services and the number signed up for the free online health information remains unclear. Daren Marhula, senior research analyst at U.S. Bancorp Piper Jaffray, said Healtheon must overcome a number of hurdles before it can "meld its disparate empire into a single organization" and prove it can profit by selling its Internet-based insurance claims.
Not Yet the Leader of the Pack
Many analysts are concerned about Healtheon's failure to lure three of San Jose Valley's largest medical groups into its programs. Executives from Camino Medical Group, Palo Alto Medical Foundation and San Jose Medical Group, cited various reasons for their reluctance. Ernie Wallerstein, vice president of the San Jose Medical Group said his organization is "satisfied with its existing electronic links to insurance firms." One problem with Healtheon is that "they want to charge you money," he said, adding, "If they can find some way to get transactions fees paid by insurance companies (then the group would consider signing on)." Ed Bierman, Internet manager at Palo Alto Medical Foundation, cited privacy concerns. Healtheon was "so aggressive in trying to sell their product," he said that they "weren't going through the proper channels and (directly approached) our physicians when I said to go through me." Marhula, who is tracking Healtheon's competitors, said, "There are areas where other e-health companies are definetly stronger and going to give Healtheon/WebMD a strong run for its money. It's too early to say that Healtheon's won this game" (Harris, San Jose Business Journal, 3/6).