Wygod Spoons Strong Medicine to Ailing WebMD
Facing "collapsed" share prices and losses "ballooning in the billions," WebMD Corp. is suffering from a number of financial maladies, but "seasoned" health care entrepreneur Martin Wygod may have a prescription for the ailing dot-com, the Wall Street Journal reports. Wygod, who became co-chair and then CEO of WebMD after selling his Medical Manager and CareInsite businesses to the company in early 2000, has begun "retooling" WebMD, slashing the company's staff from 6,100 to 5,000 employees and consolidating operations for the "far-flung agglomeration" of firms that make up the company into a New Jersey headquarters. In addition, he "greatly scaled back" WebMD's "grand Internet vision," refocusing the firm's efforts on selling software and services -- such as insurance claims processing -- to health plans and doctors. "This is the biggest challenge I've faced," Wygod said, adding, "[I]t's also by far the biggest opportunity." According to the Journal, the company remains an "ambitious bet" because doctors, often "strong-willed, autonomous and set in their ways," have proven one of the most "stubbornly elusive" markets for high-tech firms. But pointing out that 185,000 physicians already use WebMD's Medical Manager software, Wygod said he can "build on that base." He said, "We'll improve patient outcomes and bring down the expense of health care, [and] as a byproduct, the company will make a ton of money."
While WebMD has not "managed" to establish a "promised" online network for health care transactions, the Journal reports that "this isn't exactly another story about the death of an e-commerce pipe dream." Despite the "demise of dot-com mania," the company's clients and some major business partners have not "altogether abandoned it," and investors "hold out a little hope." The Journal attributes such support to the "persistent, widespread belief that...the Internet still holds tremendous unlocked potential" in the health care industry. Industry watchers also believe that with the help of Wygod, the firm may "turn things around" (Carrns, Wall Street Journal, 1/17).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.