MEDICAL RECORDS: Medscape Hopes to Gain from Digital Push

      After its recent merger with MedicaLogic, Medscape is poised to "capitalize on" the health industry's push to convert records from paper to digital form, CEO Dave Moffenbeier told the Dow Jones Newswires/Wall Street Journal in an interview. The Health Information Privacy and Portability Act (HIPPA) gives patients the right to access their records, including the ability to alter inaccurate information and to know who else has accessed the information. But with only 4% to 5% of patient records in electronic format, Moffenbeier said, "If you have paper records, it will be a nightmare. It will cost more ... to become HIPPA compliant than to become Y2K compliant." Medscape provides medical record services in both client-server and online formats, in addition to clinical information for physicians and patients. Currently, about 10,000 physicians use the client-server system, called Logician, and about the same number use an "application service provider version of Logician." After 15 years of developing software to digitize medical records, Medscape holds a "dominant position" in the industry and hopes to offer some products for free; the company also plans to offer more sophisticated applications for a fee, including "Medscape Mobile," a drug reference guide and medical drug calculator that operates on a Palm system. Already, Medscape has installed systems for New York University Medical Center, Yale-New Haven Health Systems, Arkansas Blue Cross Blue Shield and Baylor College of Medicine. Moffenbeier added, "There is a lot of paper out there, but there is a movement toward digital for a lot of reasons, and [Medscape is] in the best position to take advantage of that when it takes off." Analysts expect the company to post revenue for the year of $35 million to $40 million, and Moffenbeier said Medscape should break even "on the basis of" earnings before interest, taxes, depreciation and amortization (EBIDTA) (Stepankowsky, 9/25).