Remember the future? Less than two years ago, that was all we were talking about, it seemed, and that future was mostly online. Fast forward to today, and the grand visions of startup dot-coms are hanging by a thin fiber.
The most recent and most high-profile failure occurred last week, when Dr. Koop Life Care Corp., the consumer health Web site started by former U.S. Surgeon General C. Everett Koop, M.D., went under. Although no one questions that the Internet still has a vital role to play in healthcare, Dr. Koop was only the most recent evidence that having a solid business plan is bigger than any visions of the future.
Remember InLight Tech-nologies, founded by former Baxter International Chairman Vernon Loucks Jr. and his son David to market Internet services to patients? Gone dark.
How about Medicalbuyer .com, an online supply marketplace? Offline.
Or HealthNexis, a virtual hospital supply distributor backed by some of the leading hospital supply middlemen? Virtually gone, absorbed by Global Healthcare Exchange, an e-commerce site backed by the big players in healthcare manufacturing.
Still in business is WebMD, which provides Internet-based transaction processing and information services to the healthcare industry. Of course, that's a matter of opinion. Is losing $6.5 billion on a paltry $530 million in revenue in the first nine months of this year still "in business"?
Medscape, a classic story of the dot-com boom, is also still alive, though not really kicking. It was the result of a merger of MedicaLogic, a brick-and-mortar electronic medical records company with an actual product, with Medscape, an online clinical reference source for physicians. The combined company is a bust, losing $829 million through the first three quarters of this year and now hanging on with enough cash reserves to make it to the new year while it seeks a buyer.
Dr. Koop was formed in 1997 with a goal of developing software that would enable the full medical and insurance records of people to be accessed online throughout their lives. That never happened. Instead, the emphasis shifted to an online healthcare information site, drkoop.com. The company had the typical early success with an initial public offering, raising $420 million before its share price tumbled.
Earlier this year, following the typical path worn by other failed dot-coms, the company wandered into an unrelated business, home-infusion therapy.
Industry studies have pointed out that although most Web browsers use online health sites, they do so too infrequently to be of value to advertisers, the dot-coms' main source of revenue.
One area of value to advertisers may be sites directed at physicians. A survey of 400 physicians released earlier this month by the Boston Consulting Group found that the vast majority of doctors use the Internet as a tool for enriching their medical knowledge. More than two-thirds of physicians surveyed return regularly to two to five sites.
WebMD and Medscape were two of the top sites visited.