The American Hospital Association is taking a second shot at marketing e-commerce services to hospitals, a move that follows its unsuccessful attempt last year with an ill-fated technology partner.
Last week, the AHA announced it had partnered with Denver-based telecommunications giant Qwest Communications to build a healthcare information hub for AHA members and to offer hacker-proof network services.
Citing the need for a "common technology infrastructure" in the healthcare industry, the AHA said it believes it can capitalize on hospitals' growing need for secure online communication with one another, other insurers, physician offices and other groups. So far, however, the AHA has no takers.
"Do we have exact customers now? No," said Tony Burke, president and chief executive officer of AHA Financial Solutions, the for-profit AHA subsidiary that provides professional services. "We have an interesting and compelling marketplace."
As part of its deal with Qwest, the AHA is in a revenue-sharing agreement and receives an unspecified portion of the proceeds Qwest generates from hospital customers. The AHA does not provide technology or services directly but instead connects hospitals with the resources Qwest and other vendors provide, Burke said.
The AHA attempted to tap the online marketplace in September 2000 when it announced a partnership with Darwin Networks, a Louisville, Ky.-based computer network company that later declared bankruptcy and left the AHA on the lookout for a new partner, after spending $850,000 on the failed venture (April 4, p. 5).
The Qwest partnership will help ensure that hospitals "have access to the right infrastructure to facilitate adoption of (online) technologies," Burke said. He said the AHA has not been actively pursuing potential customers, and that a full-fledged marketing effort will soon kick off.
Often preferring to do business with the software and telecom vendors already in place in their organizations, hospitals may be slow to take the AHA up on its latest offer, observers said.
"The good thing is, there's a lot of name recognition with the AHA," said Michael Davis, vice president and research director of the healthcare practice at Gartner, a Stamford, Conn.-based research firm. "The bad thing is, I don't think AHA has the resources to push these services into their member base."
Under its new agreement with Qwest, the financial details of which Burke declined to disclose, Burke said the AHA hopes to build an online healthcare portal its members can use to access industry information.
The 4,600-member hospital association also plans to help healthcare organizations build secure connections with business partners as part of complying with patient privacy regulations mandated by the Health Insurance Portability and Accountability Act of 1996, which go into effect in April 2003.
Burke said the AHA believes Qwest has the resources and staying power to make this e-commerce venture a more successful one than its last. Qwest "is a tier-one player in the marketplace," Burke said. "They have a large, very significant national presence."
Gartner's Davis said it would be difficult for the AHA to gain a foothold in a market already occupied by a large field of vendors. "If you're a hospital looking for (online) services, the first place you look is to your existing enterprise vendors," he said.
Unless it has a strong, dedicated sales force to sell the Qwest services to hospitals, "I don't see the AHA being a driver of these types of products in this market," Davis said.