The American Hospital Association's foray into healthcare information is expected to boost declining revenues, but the new unit is looking beyond the hospital sector to make or break its success.
The new for-profit data subsidiary, Healthcare InfoSource, will operate out of the AHA's Chicago office, focusing on innovative and faster ways to transmit information to an estimated 12,000 customers-including about 4,600 hospitals and healthcare systems represented by the AHA. MODERN HEALTHCARE disclosed the AHA's plan to start the subsidiary in April (April 21, p. 3).
"One of our key goals in our first year of operation is to provide vendors and providers with more timely information," said Deborah Frett, vice president of the AHA's data and information business group. Frett has been named president of Healthcare InfoSource.
"What we are doing is creating a company that will serve the broad healthcare market," she said. "We already have over 12,000 customers who actively purchase stuff from us, but we want to look at a larger healthcare market than that."
Healthcare InfoSource will continue to offer information products in print, such as The AHA Guide to the Health Care Field, and it also will make them available on CD-ROM, diskettes and a World Wide Web site. In addition, it will create and market new products.
"We'll be coming out with a new product in midsummer, and that will provide some of the data in terms of hospitals, alliances and networks in electronic form," Frett said.
She said Healthcare InfoSource will have a "very aggressive business plan," but she wouldn't disclose its budget or projected revenues.
Governing Healthcare InfoSource will be a board with four outside directors and three AHA staff representatives. One of the AHA executives was Paul Boyke, president of AHA Services, but he unexpectedly resigned last week (See story, this page).
The AHA has been looking for revenue-generating opportunities as hospital industry consolidation causes its revenues from membership dues to continue to fall (Oct. 7, 1996, p. 50).
The AHA's dues revenues dropped 6% to $57.9 million in 1995, according to the association's most recent financial information. That was the lowest dues total since 1992, when it was $52.8 million.
As of July 31, 1996, the AHA had 4,433 hospital members, down 150 from the previous year.
Part of Healthcare InfoSource's business plan will center around intensive sales and marketing. "We'll have a lot of emphasis on the nonhospital provider side and the vendor side," Frett said.
Healthcare InfoSource products will be pitched to physician groups, managed-care companies and large employers.
Healthcare InfoSource eventually will employ 22 full-time-equivalents, but most of them will come from the association's existing data and information business unit.
"When it's all said and done, we'll still have 460 people," said Richard Wade, AHA senior vice president for communications.
The AHA's restructuring in recent years has decreased the Chicago office work force to its current level of 257 FTEs. The association has 72 FTEs in Washington. All told, it has 460 FTEs with subsidiaries.
Healthcare InfoSource is the AHA's third subsidiary. Its other units are AHA Services, which operates the association's other for-profit businesses, including its publishing company; and the not-for-profit American Organization of Nurse Executives.