When a crew member of a seafaring supertanker falls ill, a pint-sized company in Owings, Md., whips out its virtual medical bag.
Dispensing 24-hour-a-day medical advice by radio to ships at sea and advising ill and injured foreign travelers are core activities for the 17-year-old company, Medical Advisory Systems. To date, those two specialties have been its bread and butter. "It's why we make money," explains Ronald Pickett, MAS founder, chairman and president.
The $3.3 million gnat of a publicly traded corporation has posted profits in each of the past nine years. In 1998, MAS cleared a little more than a half-million dollars, or 14 cents per share.
But if Pickett's sprawling plans for this quiet little business are even marginally on target, MAS soon will become appreciably richer by yanking the multibillion-dollar global franchise for medical information out from under the noses of the nation's healthcare systems, HMOs and physician practices. It will do that by combining Internet and telephone advice services, such as through a newly marketed subsidiary called Doc-Talk.
To most of Wall Street, MAS remains a well-guarded secret. Research analysts have yet to initiate coverage of the company. But one New York money manager whose healthcare fund holds MAS stock expects share prices to soar in the coming weeks as news of the strategy trickles out.
Hyperwhat? According to people who follow e-commerce opportunities, healthcare providers who don't know a hyperlink from a hypodermic needle are about to be left in the dust. "To me, the Internet is almost perfect for healthcare, because the Internet's all about moving information," says David Friend, a managing director at Watson Wyatt Worldwide's Boston office and the author of a soon-to-be-published book tentatively titled Healthcare.com.
Hospitals are getting beaten at their own game as fast-paced Internet companies swipe business, whether it be managing medical records, reading X-rays or providing medical information. "They're being Amazoned, and they need to wake up," Friend says, referring to the success of on-line bookseller Amazon.com.
A flock of multimedia-savvy entrepreneurs, such as MAS' Pickett, are already figuring out how to tap the wallets of an information-hungry public.
David Talbot, a New York-based money manager who runs a healthcare fund for private investors, first bought MAS over-the-counter at $6 per share. Today the fund's largest position is in MAS.
"It's a very exciting story of a ship-to-shore medical company that all of a sudden has the catbird's seat for the dial-a-doc business internationally," he says.
As newcomers get a whiff of the abounding opportunities, MAS is sprinting ahead of the pack. "First-mover advantage," as Pickett calls it, is critical.
Cutthroat business. There are, of course, other companies-and potentially hospitals and physician groups-nipping at Pickett's heels. MAS' biggest threat is drkoop.com, the World Wide Web site named for the popular former U.S. surgeon general, C. Everett Koop, M.D. (Sept. 14, 1998, p. 76; June 14, p. 62).
And InteliHealth-a 3-year-old Internet healthcare company that provides consumer health information and is backed by Aetna U.S. Healthcare and Johns Hopkins University and its three-hospital system-exemplifies what providers can do if they marshal their resources (April 19, p. 36).
Talbot, for one, is betting on MAS. He says the company has several key advantages that spell success.
One is an exclusive relationship with America's Doctor, an anchor tenant on America Online's health page. America's Doctor's chat service is staffed by MAS' 24-hour team of 120 physicians, who answer medical questions posed by AOL customers. (Unlike the ship-to-shore telemedicine business, the company informs consumers but doesn't dispense advice.) Pickett says his doctors handle about 3,000 inquiries per day.
Under the deal begun last fall, America's Doctor pays MAS a cost-plus fee to staff the chat service. America's Doctor's three-year agreement with AOL, the nation's largest Internet service provider, promises to be lucrative. In the first half of 1999, MAS chat center revenues topped $1.5 million.
"Our company will net $19 million over the next four years under that contract," Pickett adds.
MAS also is an equity investor in Owings Mills, Md.-based America's Doctor, controlling a 14.5% stake in the fledgling Internet company. With plans to go public soon, America's Doctor could significantly boost MAS' return on its initial $2.5 million investment.
MAS also negotiated an exclusive button on America's Doctor's Web site, which serves as the portal for its Doc-Talk medical information service. The company is negotiating for links to other Web health sites.
All in all, the America's Doctor contract gives MAS a sprinting start over the competition, Talbot says. "Three years on the Internet is an eternity," he adds.
MAS has a few other tricks up its sleeve.
Beginning this month, Doc-Talk will begin gunning for business among people who aren't active on the Internet or who would just as soon pick up the phone and chat with a physician. Using a toll-free number and a 900 number for repeat callers, Doc-Talk will ring up more business by charging modest fees for medical information. Pickett says he hopes to spin off Doc-Talk into a publicly traded company.
MAS also intends to take its medical advisory services global through an affiliation with SACNAS International, a Paris-based company that helps foreign travelers navigate the medical systems of other countries. The plan is to develop international call centers staffed by MAS to provide medical information in much the same way as MAS works through America's Doctor.
All of Wall Street may soon know about MAS. On July 28, the company vaulted from relative obscurity into the big leagues of corporate America by commanding a spot on the American Stock Exchange. Formerly an over-the-counter stock, MAS' move to the AMEX under the symbol "DOC" should improve the stock's liquidity and increase the company's exposure, Pickett says.
In its first days on the AMEX, MAS traded at about $18.