The reach of the Internet may be global, but for hospital giant HCA-The Healthcare Co., the focus is on making it local.
Centering its consumer Internet strategy on the theory that the best brand in healthcare is the local hospital, HCA (until recently called Columbia/HCA Healthcare Corp.) is steering clear of the drkoop.coms of the world. Instead, the Nashville-based company is equipping its local hospitals with World Wide Web site content tailored to meet the needs of each community.
By working to connect clinical content to localized information and hospital services, HCA is attempting to make information more useful.
Executing this strategy, says HCA's Web guru, is what will make the hospital giant a winner in the Internet game.
"The winner in this space will combine world-class healthcare content from the Web and integrate it with local information about services, technologies and health programs," says Marty Paslick, HCA's vice president of Internet strategy.
Instead of opting for the name recognition of a healthcare site such as Atlanta-based Healtheon/WebMD or Austin, Texas-based drkoop.com, HCA went with an Internet partner that would be invisible to those visiting each hospital's Web site. In the drkoop.com model, hospitals offering the former surgeon general's content also display his logo, making it clear to visitors that the information does not come from the local hospital itself. In many cases, consumers requesting information from their hospital's Web site will be directed out of the site and into drkoop.com to see the content they're after.
HCA, Paslick says, wanted to "give the consumer a consolidated, cohesive view of information without zipping them all over the Internet."
When health information for consumers comes from their own hospital instead of a national dot-com, consumer traffic to the site increases and "the hospital can hopefully reach out and pull those patients into their doors," says Bill Reece, chief executive officer of HealthGate Data Corp., the Burlington, Mass.-based company HCA chose to provide Web-based content for its hospitals.
"If HCA is doing a private-labeled version of HealthGate . . . then I think that's a positive, appropriate strategy most hospitals are coming around to," says Douglas Goldstein, president of ehealthcare.net, an Alexandria, Va.-based strategic consulting firm.
Since last November, when the deal was signed, roughly 150 of HCA's 204 hospitals have gone live with HealthGate's content. HCA hopes to have content integrated into all its hospital Web sites by year-end.
According to a HealthGate filing with the Securities and Exchange Commission, HCA is paying HealthGate a $3.5 million annual license fee covering all products and services HealthGate provides over the life of the three-year contract. According to that same filing, HCA paid HealthGate $875,000 in 1999, representing 18% of HealthGate's revenue last year.
The consumer-focused information HCA selects for each of its Web sites varies depending on specialty services offered in certain markets and the customer bases served in those markets.
Specializing content by market is just one piece, Reece says. To offer value to patients and attract new ones, he argues, the online information must also link with services the hospital offers. For instance, when a patient logs on to her hospital's Web site for information on breast cancer, that information can and should be accompanied by the ability to schedule an appointment for a mammography, Reece says.
"In any Web service, delivering market share is going to depend on the ability of that site to close transactions," agrees Goldstein, who is also the author of e-Healthcare: Harness the Power of the Internet for e-Commerce and e-Care. "If you put up brochures that don't do anything, you're not going to build market share."
Results of an Internet study conducted by El Segundo, Calif.-based Computer Sciences Corp. earlier this year indicate that the brochures Goldstein mentions constitute the bulk of content on most hospital Web sites. Of 320 sites the technology services company surveyed, 57% offered purely informational resources that are often referred to in Web-speak as "brochureware."
Just 8% of the hospital sites offered patients the ability to schedule an appointment online.
Even content alone, however, appears capable of boosting traffic to a hospital's Web site. One of HealthGate's customers, 179-bed Montgomery General Hospital in Olney, Md., reports that traffic to its Web site increased some 900% in the first seven months of offering clinical content targeted to consumers.
According to information Montgomery General provided to HealthGate, the number of monthly visitors to its Web site increased to more than 20,000 in February from 2,100 in July 1999.
For HealthGate's basic package, a hospital like Montgomery would pay $55,000 per year, according to Reece. Prices go up from there for more content and additional features. If advertisers pay for presence on a site, any revenue generated by those ads is shared between the individual hospital (or hospital company, in the case of HCA) and HealthGate.
One reason many hospital sites do not yet venture far beyond content alone is that offering more interactive services is not an overnight proposition.
Building transactional capabilities involves much more than flipping a switch, Goldstein says. The progression to fully interactive Web pages will be a gradual one, he predicts, as health systems work to integrate their existing information systems with their Web sites, a process that will make possible online transactions such as appointment scheduling and completing pre-admission forms.
"There will be a big market to tie (together) all these disparate clinical systems on a common Web-based platform," Reece says.
HCA plans soon to launch an online bill payment service, as well as one giving doctors the ability to view test results online. But those projects are being completed by HCA and are not in conjunction with HealthGate.
"We don't do anything with HealthGate that actually touches our legacy systems," says HCA's Paslick. "Those activities are all done by our staff."
While Paslick downplays the extent to which HCA uses its Web sites as marketing tools, Goldstein believes that effective Internet strategies do play a role in attracting and retaining patients.
By offering interactive services and transactional capabilities, Goldstein says, hospitals are "building your brand and enhancing your relationships with patients because you're giving them what they want, which is convenient, easy access."
As a member of the struggling healthcare dot-com sector, HealthGate lost $16.7 million, or $5.46 per share, in 1999, compared with a loss of $2.9 million, or 76 cents per share, in 1998.
But the company's CEO says customers want a financially solvent partner and see HealthGate as more stable than other companies in its space.
"We're actually showing that we'll be cash-flow positive in the not-too-distant future," Reece says. "Our financial stability is starting to be good for us."