An Atlanta-based start-up company with $40 million in backing will launch an Internet-powered service this week that consolidates all physician communication needs-from electronic billing to 24-hour medical links for patients-at one source.
Its principals are the latest to chase the elusive promise of the Internet as the gateway to electronic commerce, reliable medical information and trusted relationships between providers and patients.
The new company, called WebMD, is counting on advances in Internet and telephone communications management to organize a physician's phone, fax, voice mail and e-mail traffic into a universal "in-box" accessible by phone or personal computer.
During the past 10 months, the company also has rounded up a cavalcade of medical content and service providers to route their World Wide Web sites through WebMD. The aim is for physicians to use a "medical mall" of Internet access instead of having to keep track of a fistful of Web addresses and spend time seeking them out one at a time.
The lineup of service partners includes Atlanta-based HBO & Co., which invested $10 million and will provide a 24-hour call center for patients; Envoy Corp., which provides electronic billing, eligibility verification and patient and physician referral services; and Thomson Healthcare Information Group, which offers a range of medical reference databases including Physicians' Desk Reference.
Prime movers of the start-up effort include two hard-chargers brimming with recent success, one as a high-profile promoter and the other as a medical entrepreneur:
Billy Payne, 50, the Atlanta attorney who spearheaded the city's successful campaign to host the 1996 Centennial Olympic Games and became the effort's chairman and chief fund-raiser. He's vice chairman of WebMD, in charge of strategic development, as well as the head of a technology firm supplying the platform linking telephones to the Internet.
Jeffrey Arnold, 28, who founded a cardiac arrhythmia monitoring company four years ago with a $25,000 family loan, eventually attracted $13 million in venture capital and sold the company for $25 million in July. That sale is part of the $40 million raised for WebMD, which Arnold founded; he now is its chairman and chief executive officer.
The strategy, Arnold said, involves making WebMD an indispensable tool with which physicians can run their business, then providing them with individual home pages containing practice information and links to WebMD's medical information sources. That establishes physicians as reliable medical sources and draws consumers to the sites of WebMD's partners, he said.
Payne said the Internet is used widely to search for medical information, but reliability is a problem.
Web sites such as InteliHealth, a venture between Johns Hopkins Health System and Aetna U.S. Healthcare, have gone out on their own to supply that reliability, but they still compete with hundreds of sources. InteliHealth is among the WebMD content partners.
"In the healthcare industry, nobody has captured the confidence of the public at large," Payne said. He said the initial push to attract physicians would result in the credibility and name recognition necessary for WebMD to gain public confidence and act as a magnet.
The harnessing of physician and consumer audiences remains anyone's grab at this point, he said. "The first company that succeeds in this-we have another Microsoft story on our hands."
WebMD isn't the only contestant, though. In fact, a chief competitor is in WebMD's backyard.
An Atlanta-based company called Medcast Networks beat WebMD to the news media by a week, taking out a full-page ad in the Sept. 28 New York Times that summarized a medical information service for physicians.
The start-up is part of Greenberg News Networks, founded by Alan Greenberg, the former editor of Esquire magazine. The company said it has raised $22 million in venture capital and will develop an editorial operation as well as a partnership with Johns Hopkins.
But Arnold said WebMD is the first to have a product that can go live nationally. Among its first customers is Memorial Health System, Savannah, Ga. In addition, Aetna U.S. Healthcare has signed a contract to use WebMD as the access route for Envoy's electronic eligibility services, Arnold said.
Memorial agreed to pay WebMD's monthly $30 fee per physician to bring the service to the 150 physician practices it owns. That fee includes access to an automated answering service and message management service. Among the features: a capability to convert e-mail so physicians can call in and get Internet-transmitted messages read to them over the phone.
Aetna U.S. Healthcare's 60,000 physicians will have an option to pay $25 a month for a connection to Envoy through WebMD, which includes the use of a network-connected PC. Physicians now pay that much for a single-purpose point-of-service terminal, similar to a credit-card approval machine, to make electronic queries and transactions.
WebMD also plans to sell advertising sponsorships and sign contracts with other nonmedical Web site purveyors, such as on-line stock traders, that are attracted to the core physician customer base.
Meanwhile, Payne said he'll be in charge of selling Fortune 500 companies on the benefits of bringing health and wellness information and services to their employees. Quick access to medical databases, plus such services as 24-hour nurse availability by phone, could "contribute positively to their days at work," he said.
The nurse triage service is provided by HBO & Co.'s Call Center Group, formerly National Health Enhancement Systems. WebMD also has licensed the service's clinical content and automated patient test results products.
HBO & Co. last week moved to significantly expand its call-center business by agreeing to acquire Access Health in a stock swap valued at more than $1 billion (See related story, p. 38).
Other service and medical content providers in the partnership include:
Matria Healthcare, a Marietta, Ga.-based provider of obstetrical home-care and maternity management services. Matria is the firm that purchased Arnold's cardiac monitoring business, moving into that area as well.
National Jewish Medical and Research Center, Denver, which specializes in respiratory, allergic and immune system diseases.
HealthGate Data Corp., a Malden, Mass.-based medical database company specializing in patient care, biomedical research and education.
iXL, an Atlanta-based technology company that provides Web page development, design, production and training.
Premiere Technologies, Atlanta, which provides the communications platform linking telephones, fax machines, computers, pagers and voice mail using any telephone or PC. The company has a 12% equity interest in WebMD, and it's the parent of the firm, called Orchestrate.com, that Payne heads.