Support service

Kaiser Permanente and IBM Corp. are rolling out Carepanion, a business entity designed to address the "lifecare needs" of the estimated 100 million Americans with chronic illnesses, conditions or disabilities.

"Lifecare is an emerging concept that embraces the support services and products that help people best cope with ongoing health challenges," says Peter Juhn, M.D., president and CEO of Concord, Calif.-based Carepanion. "The question is, how do we best address those patients' needs?"

The answer, according to Juhn, is the one-stop shopping Carepanion provides via a Web site and, for the unwired, a toll-free call center.

Customers can dial up or log on to order discounted products and services through Carepanion's CareProducts offerings. Patients can chat online with those similarly afflicted and glean information via CareCommunity, and alert friends and family to needs--from groceries to occupational therapy--by posting a private list on CareRegistry.

Juhn says the endeavor is intended to augment, not supplant, providers. "The way to really best leverage a tremendous technology like the Internet," he says, "is not to use it to replace the system of healthcare we have today but to use it in a complementary fashion to assist the healthcare delivery system in providing supplemental support."

Patients needing such support historically have looked to community agencies and loose networks of family and friends, says Walter Kopp, president and CEO of Medical Management Services, a San Anselmo, Calif.-based healthcare consulting company. "Carepanion provides a more secure and well coordinated safety net, with more services across the board."

In the fragmented e-health market, Juhn says Carepanion is unique in its wide array of offerings and its desire to keep Kaiser enrollees healthy and at home.

"The nonmedical care interventions are as important to health outcomes as the medical care itself," says Kaiser Permanente CEO David Lawrence, M.D. As is the case with screening and prevention, he says, facilitating consumer access to crucial nonmedical health determinants should reduce morbidity and mortality.

Lawrence says the not-for-profit HMO is expected to reap dual benefits of utilization reduction and increased value of stock it holds in Carepanion.

"That's value that you can then turn back to the members in enhanced services," he says.

Though the business model is not yet final, revenue likely will flow from per-employee subscription fees paid by employers offering Carepanion as an added benefit; concierge fees assessed for appointments scheduled by customer care agents; and a portion of negotiated discounts retained by the company, Lawrence says. No advertising is planned on the site.

Kaiser kicked $10 million into the startup, while IBM provided $5 million and core technology, Web site design and operation services. The HMO is actively seeking other investors and intends to hold a minority stake in the venture.

According to a survey by the Kensington, Md.-based National Family Caregivers Association, more than 54 million--26% of adult Americans--care for an elderly, disabled or chronically ill friend or relative. A General Accounting Office report in the mid-1990s pegged the growing number of citizens debilitated to the point of requiring daily living assistance at nearly 13 million, with only 2.4 million of those institutionalized. A 1996 study by the Institute for Health & Aging at the University of California, San Francisco for the Robert Wood Johnson Foundation found that 100 million have chronic medical problems.

Kopp says he considers the venture promising. It has "impressive" backing from Kaiser and IBM, targets an enormous market of ill and disabled patients, offers a variety of services and features a developing business model with multiple revenue streams. "If one dries up, you've always got another one," he says.

"I think they have good potential."

Josh Fisher, e-health analyst with WR Hambrecht + Co. in San Francisco, is less enthusiastic. "It looks really early, and no one in this segment has made any money yet," he says. "But there's definitely a need there."

But because the concept behind Carepanion is "cutting-edge," gauging its viability is difficult, Fisher says. "The business model hasn't been proven yet by anyone. It could work."

Gordon Manashil, M.D., physician-in-chief of Kaiser Permanente San Rafael (Calif.) Medical Center, says he could have used Carepanion in 1996 when an accident rendered his 22-year-old son paraplegic. "I personally faced the difficulty of these issues, and it's tough. You're just thrown into something you have no idea how to negotiate."

Medicare beneficiaries constitute 15.2% of the center's patients, Manashil says, and many encounter similarly challenging scenarios when discharged. "These are our patients that have aged-in, for the most part. I see this as one more obligation we have to our members, (and) I'm happy to see it."

Carepanion was first available in September to Kaiser enrollees in the San Francisco Bay Area and will be open to the HMO's 8.6 million enrollees in 11 states and the District of Columbia by spring. Nonenrollees in those states will be able to use Carepanion's concierge services, and all consumers can now order products and participate in CareCommunity.

The enterprise is accessible at www.carepanion.com or by dialing a toll-free number to reach a call center manned by Dallas-based Beryl Companies agents who help consumers navigate the Web site, locate service providers and schedule services ranging from house cleaning to food delivery.

Carepanion addresses a gap in the healthcare system, which traditionally has focused on disease management rather than illness management, says Dennis Mihale, M.D., a Tampa, Fla.-based managing principal for IBM's healthcare consulting division. "We don't do as good of a job post-care."

Surgical patients, for example, are typically given a handful of brochures from unfamiliar home health and medical supply companies when discharged from the hospital, says Mihale. "We might send a patient home--when they've just been through the equivalent of a 15-round boxing match--believing that the system is going to be there for them with education and support. But physicians often don't get feedback when the system breaks down."

Mildred Ernsberger, 76, suffers from emphysema and rheumatoid arthritis and is homebound. Ernsberger, a retired Kaiser optician living in San Rafael, struggles to maintain independence and make wise buying decisions within the constraints of limited transportation options. "I was able to get to just one medical supply store, and I was shocked at the prices," Ernsberger says. "I like the idea of having a choice."

Cooperative buying power drives down costs for consumers like Ernsberger, says Juhn. "We're actually labeling ourselves C-to-B (consumer to business)."

Juhn says an example of the downward pressure of aggregate purchasing on price is a product intended to encourage a largely unwired clientele to access the enterprise online: a Compaq computer with free Internet service available for $150 less than the same PC on the computer company's own Web site.

Another feature Juhn jokingly refers to as "e-guilt" is Carepanion's capacity to bring far-flung relatives into the care-giving circle. Family members who are geographically close to those needing assistance often carry a disproportionate amount of responsibilities, he says, while those farther away contribute less.

"Distance becomes less of a viable excuse," Juhn says. "If you can't be there to actually help Mom, maybe you can buy her a hospital bed."

Mihale expects Carepanion to help supply ancillary services to patients in rural areas, where an HMO may have only one such contracted provider in an entire county. A reverse auction arranged through the portal would ensure delivery of what a patient needs, when they need it, he says.

Online discussions among those with similar conditions should not only reduce patient anxiety but also elevate and streamline patient-provider dialogue, Mihale says. "Rudimentary questions impinge on already-brief office visits.

Having those basic questions answered beforehand results in a better quality experience for both the patient and the doctor."

Ernsberger says chats hosted by Carepanion may meet psychological needs of the homebound and their caregivers. "Some don't do well with isolation emotionally," she says.

As pressure grows on the "sandwich generation"--adults caring for children and parents simultaneously--demand for businesses like Carepanion will only increase, Juhn says. "Unfortunately, this is going to be a growth industry because of demographics."