Healthcare technology companies, whether by inspiration or desperation, have caught the Internet bug. That could make it easier for physicians -- even in small practices -- to buy and use technology.
Feeding the industry's online craze has been the proliferation of computer products and upstart Internet companies targeting healthcare.
Exhibits at the Feb. 21-25 Healthcare Information and Management Systems Society conference in Atlanta featured more Web sites than a musty attic. While last year's HIMSS exhibitors barely acknowledged the Internet, this year companies at the industry's major annual shindig had the zeal of new converts.
Most companies were premiering their Internet-based products at HIMSS. Others, such as Cerner Corp. and McKesson HBOC, have recently invested in Internet startups.
"What prompted (the online craze) is the speed and simplicity" of the technology, says Judith Faulkner, president of Epic Systems of Madison, Wis.
Epic, which sells mostly to large, hospital-based systems, used a man in a Spiderman outfit to premiere its Web-based practice management system at the conference.
Part of the speed and simplicity is in training people to use a system. Because more physicians are using the Internet, familiarizing them and their staffs with a browser-based system takes much less time than teaching them a proprietary system.
With an Internet-based system, practices don't have to set up an in-house network, which would drive up costs. Instead, they buy or lease computers, and an off-site computer handles the grunt work of storing and transferring information.
For those reasons, some healthcare technology companies say an Internet-based system can be a savior for a physician practice that wants to stay small and independent.
Access to technology is one major reason smaller groups merge or ally with larger groups such as hospital-based systems, independent practice associations and physician practice management companies.
Some companies are offering Internet-based practice management systems that cost as little as $100 per computer per month for hardware, software and the ability to order discounted supplies. Small or start-up companies looking to break into healthcare often offer such products.
The inexpensive rates for Internet-based systems make it easier to demonstrate that technology can be a money-making tool, or at least not a money-losing one, says Jeffrey Kessler, vice president of development and marketing for Maple Grove, Minn.-based MedServe Link.
"(Doctors) are under such cost-containment (pressure)," Kessler says. "If you can't show an improvement in the bottom line, it's a tough road." The privately held healthcare technology company did not release sales figures.
On the other hand, companies that traditionally have concentrated on large, hospital-based systems say the Internet can be a savior for anyone wanting a cheap, easy way to send information from building to building. Even some of the newer Internet-based businesses are concentrating on this market.
Pam McFarland, spokeswoman for Axolotl Corp., Mountain View, Calif., says there's no reason a smaller group can't use her company's Internet clinical-messaging system. "Of course, we would like the big sales," McFarland says. "It takes (the same amount of) work to sell to 300 (physicians) as to 25."
Epic's Faulkner says that while her company will continue focusing its sales on integrated delivery systems, the lower-priced Internet products mean it's viable for a smaller group to become an Epic customer.
Conversely, Epic could hook into that smaller group and ride its growth to an eventual larger sale. "A lot of (small practices) plan to grow, then transfer to (an in-house) client-server product," Faulkner says.
Most of the available Internet products are related to practice management and communications; there is still enough concern about medical records privacy to prevent a huge push into the clinical arena.
The fact that many of the large integrated delivery networks already are sold on the Internet, at least for some uses, may help technology companies' sales.
According to the GartnerGroup, an information technology consulting firm based in Stamford, Conn., a study of 162 networks revealed that 92% were connected to the Internet in 1998, compared with 53% the previous year. The most frequent use, at 64%, was for marketing, such as having a home page or sending out health tips and educational information.
However, only 9% of networks surveyed used the Internet for sharing information, and that's the market companies are going after.
Another group believes it can find salvation through the Internet, and that's the computer companies themselves.
The weeks following this year's HIMSS conference were not good to the largest healthcare technology companies. Among the setbacks:
Spokeswoman Lesli Howard says McKesson HBOC will not attend next year's HIMSS convention in Dallas because it conflicts with the company's sales meetings and because it occurs so soon after the end of the company's first quarter, March 31. HIMSS moved the 2000 convention to April from late February because regular attendees said they would be busy focusing on Y2K-related problems.
Technology companies also faced the specter of Healtheon Corp., a Santa Clara, Calif.-based company that exchanges healthcare information among patients, doctors and health plans. At HIMSS, Healtheon's booth featured a 7-by-14 blue display with the slogan, "Internet & Healthcare, Here & Now."
Charles Saunders, M.D., Healtheon's medical director, says he feels as if his company is responsible for the Internet mania gripping HIMSS. Internet-only Healtheon's emergence in two years from obscurity to celebrity may have converted some companies. Healtheon claims it has linked 67,000 physicians to a network that includes major insurers, employers and hospital systems.
The company is backed by Silicon Valley's most prominent venture capitalists and Wall Street's biggest stock underwriters.
"If we were in this space alone forever, it means it's not a good idea,"
Saunders says. "There will be a lot of me-too companies. The water is safe now."