Ending unnecessary medical care isn't just good sense and sound economics; it's a fast-growing business-and one the American Hospital Association stands to benefit from financially.
Health Dialog, a for-profit patient education company with David Wennberg at the head of its data-analysis subsidiary, finished 2003 with revenue of $48.5 million-up 42% from $34.2 million in 2002-and is expected to finish out 2004 with $92 million in revenue, which would represent a 90% increase from the previous year, said its chairman and chief executive officer, George Bennett.
Health Dialog develops patient-education videos, Web pages and coaching tools with information licensed from the not-for-profit Foundation for Informed Medical Decision Making, co-founded by John Wennberg, director of the Center for Evaluative Clinical Sciences at Dartmouth Medical School. John Wennberg, widely known for his research on striking variations in healthcare utilization across the U.S. (See cover story, p. 6), is also David Wennberg's father.
Royalties from Health Dialog's sales support the foundation's research and development, said Shannon Bagley, business manager for the foundation. Its rapid growth has prompted the privately owned, 9-year-old Boston company to hire Morgan Stanley to evaluate a public offering and has transformed its operating loss to a profit within the past two years, Bennett said. The company would not disclose specific net income or loss figures.
That boom may eventually mean a healthy return for the company's early investors, including the AHA, which six years ago put $2.5 million into Health Dialog, then known as Fairview Medical Services Corp.
The AHA has no intention of selling its stake in the company, said Richard Wade, the Chicago-based trade association's spokesman. "We're confident that it will turn out to be a good monetary investment, at some point," Wade said.
AHA officials endorsed Health Dialog's mission of educating and empowering patients, publicly and financially, fully aware that it may not yield a return for years, he said. It has not paid a dividend to date, he said. "We made an investment in an idea," Wade said.
Health Dialog's Bennett serves on the board of the AHA's for-profit subsidiary, Health Forum. Jonathan Lord briefly joined Health Dialog as its president after leaving his post as AHA chief operating officer in 1999 (Nov. 1, 1999, p. 3). Lord left Health Dialog to join Humana in 2000.
In 2003, Inc. magazine listed Health Dialog among its 500 fastest-growing private companies, citing the company's 860% increase in sales revenue from 1998 to 2002 as reason for ranking it at No. 192.
Health Dialog isn't the only company eager to package and market patient-friendly medical information to U.S. employers, insurers, health professionals and individual consumers. Pressure to curb spiraling healthcare costs has created a niche market, known among its proponents as "information therapy," that has attracted interest from health, technology and policy not-for-profits, government agencies and entrepreneurs.