Report Predicts Good and Bad News for Industry in 2001

The ehealth industry is expected to top $2.4 billion in revenues this year and $3 billion in 2002, even though the field continues to lose money, according to a new report from New Rochelle, N.Y.-based Corporate Research Group Inc. According to the report, titled "Seizing the EHealth Market Opportunity," ehealth generated $1.77 billion in revenues last year (nearly 80% higher than 1999) but experienced a four-fold increase in net losses to top $4 billion. CRG says new HIPAA regulations and increased Internet use will further stimulate growth in 2002 and beyond. CRG President Carl Mercurio said that "old-line" health care organizations will increase Web activity and, in many cases, purchase stand-alone ehealth companies at "bargain prices." However, the report offered words of caution, noting that "many more pure-play ehealth companies will fail" in the upcoming year (AHA News Now, 1/8).