This month, healthcare is hoping to get something it hasn't had since the 1996 glory days of physician practice management companies -- a sizzling sector on Wall Street.
The sizzle could come from healthcare information service companies planning to launch initial public offerings, following the success of Healtheon Corp. But recent declines in Internet stocks may dampen investor enthusiasm.
Atlanta-based WebMD scheduled its offering for the week of May 3, while Elmwood Park, N.J.-based CareInsite is expected to hit the market midmonth. Also in the waiting room is Austin, Texas-based drkoop.com, which has filed for an IPO but has not announced when it will be priced.
The three companies offer Internet-based information and communication tools to doctors, patients and others in healthcare. Drkoop.com is the most consumer-oriented; WebMD focuses on providing information to physicians and patients; and CareInsite will offer electronic commerce between providers, patients and insurers.
CareInsite, owned by plastics maker Synetic and software developer Cerner Corp., won't exist until its IPO is completed.
Not that CareInsite is too far behind everybody else. Most companies offering healthcare information over the Internet have started up in the past six months as physicians have gotten more comfortable with the technology and the general public more demanding of online healthcare information.
Some big players expect this to be big business. On April 14 Bloomberg News reported that Microsoft Corp. would spend $300 million for a 27% stake in WebMD, meaning the Redmond, Wash.-based software giant expects WebMD's IPO to be worth at least $1.1 billion. Not bad for a company that started up in October.
Analysts believe WebMD and the like could have the same huge run-up that has greeted other Internet companies.
Santa Clara, Calif.-based Healtheon has yet to turn a profit. But the company, which sets up information links between patients, providers and insurers, grew from an IPO price of $8 in February to a high of $61.75 on April 16, before falling to $49 on April 19.
That's when investors started selling off many Internet stocks, proving what PPMs already knew: Hot stocks can go down.