Image via WikipediaAs we hear more and more about various Health 2.0 company launches, its interesting to see what’s happening to the first wave of companies claiming they would change healthcare (post the Web 1.0 pack including Healtheon/WebMd, HealthMarket, HealthAllies, etc.)
As I posted recently, Revolution Health appears to be going the way of Steve Case’s previous company AOL. Traffic has tailed off (yikes! that looks scary) and the company’s hired a bank to explore options. Given that they’re not IPO or acquisitions, its a safe bet to assume that management doesn’t see much opportunity in the property.
Recently checked in on Xoova (formerly Doctors Direct), which I hadn’t heard much from in 2008 and their website hasn’t come up in a few days. Have they joined the deadpool? Anyone hear anything from them of late?
Even Sermo, which rocketed to 70,000 physician profiles hit some bumpy patches, as their initial monetization approach appeared similarly intrusive to the Facebook Beacon model. Ahhh, the smell of pharma money and what it does to customer value propositions…long term impact TBD, but the company claims it hasn’t hurt growth to date…
Things appear to be going better in the world of dentists, where ZocDoc (former colleagues of mine at McKinsey) appear to be growing into new verticals and are talking of expanding out of Manhattan. However, it looks like they may be the next generation of 1800 Dentists, as their affiliate fees would indicate come interesting per-lead revenue from the dentist market.
Commission Structure
Dentist Appointment
$13.50 Completed Appointment CommissionDermatologist Appointment
$10 Completed Appointment CommissionPrimary Care Appointment
$3 Completed Appointment Commission
I’d be curious to hear which Health 2.0 companies that have launched in the last few years appear to be gaining traction.
It will also be interesting to see what business models emerge from Health 2.0 (and are included in that definition). Jay Parkinson’s Hello Health certainly isn’t an ad-supported web company, but an interesting hybrid between web tools and physical practice. Health Shoppr, which will launch by end of year is focusing on the cash-pay market (a la Expedia) to bring service, niche specialization, and reputation into the health care discussion in a mix with pricing.
Its a big space with many problems. Should be interesting to see where the solutions emerge…and the dark horses attack the flanks.
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August 12, 2008 at 4:44 am
[...] or perhaps something meaningful and disruptive, a posting on Consumer-focused Health Care entitled Whither Health 2.0? suggests that things are not going swimmingly for many of the Health2.0 companies out there. These [...]
August 13, 2008 at 5:41 am
I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you down the road!
August 14, 2008 at 1:20 pm
Vijay,
Great post – I found it via Matthew Holt’s THCB. I’m product manager for Kosmix RightHealth and (for better or worse) our site is usually counted as part of the Health 2.0 crop of properties that exploded on the scene 2-3 years ago.
Our site attracts over 10 million unique monthly visitors; over the past 8 months, we’ve been hard at work at a brand new version of the site. We are in the business of organizing the best of the health web and bringing it onto one page that is easy to consume and understand; we are working with partners as diverse as MyDailyApple, BodyMaps, NBC Universal, ADAM, FatSecret and several others. Would love to hear your feedback. I’m at saumil AT kosmix DOT com.
August 14, 2008 at 1:21 pm
Oops, forgot to enclose a link: http://righthealth.kosmix.com/topic/migraine is a good place to start checking out RightHealth.
August 15, 2008 at 4:51 pm
Vijay,
I think these companies are all facing the same challenge: making money. How do you scale a company when:
1) The majority of consumers “purchase” healthcare through their employers/insurance.
2) Federal and state regulatory laws make it illegal to do what we would consider normal course of business (eg rebates, discounts, referral fees, etc) in any other consumer space. Eg Zocdoc’s commission as you’ve described would be illegal in CA.
3) Healthcare delivery is still a local proposition.
4) And frankly, the vast majority of medical professionals (supplying information, prices, etc.) don’t really care what Health 2.0 is doing because it doesn’t solve their pain points.
(Apologizing in advance for my next comment)
I saw your back of the napkin drawing and it raises issues. Some of today’s Health 2.0 companies are using very similar models and are not seeing traction. The model is also close to a handful of VC funded Health 1.0 companies that launched and crashed during the dotcom era.
I’m sure you’ve thought through a lot of these issues and I hope you succeed and prove to be one of the startups that succeeds in this market, paving the way for more consumer healthcare companies.
August 15, 2008 at 7:40 pm
Couple of points on your post about Revolution Health:
- Revolution Health’s “New Year’s Resolution Goals” seemed to work really well and traffic really picked up for the 1st QTR ‘08. I haven’t heard anyone really give me a good reason (including Revolution Health themselves) why traffic on revolutionhealth.com took a nose dive in mid-May and has stayed there since.
- Traffic and site visit though to CarePages has been very steady and consistent this entire year. In fact, it looks like it has even perked up a bit recently. I know that Revolution Health has signed up over 170 hospitals to offer this service to this patients. Thing is I can’t imagine their CPM rates are that great since it is still a social networking site.
- Extend Health was supposed to contend with the likes of eHealthInsurance eventually but it has been a real dog from the get go. Revolution Health totally underestimated how important and complicated the whole health insurance market is including the important role that broker agents play.
- RediClinic is growing gradually but the brutal reality about retail clinics is that it takes about 24 months at a minimum to become profitable (longer if you purchase a bunch of equipment and have higher costs), their profit margins on non-cash paying patients just aren’t that great, and it is going to be a tough go for retail clinics that aren’t associated with a provider delivery system or a chain drug store/retailer in the long-term.
Basically, Steve Case and the others at Revolution Health bought into the hype regarding consumerism that people like Herzlinger and others were pushing hard circa 2001/2002 and thought the passage of the MMA Act in 2003 with the creation of HSAs would move the US quickly to a world of high-deductible, cash-paying patients.
Well, it hasn’t played out like that and it didn’t help that Revolution Health didn’t execute well or really have a coherent strategy it seems besides largely relying upon a model where their customers would be patients in individual health insurance products with high deductibles.
August 18, 2008 at 1:49 pm
[...] created for various industres. There was a land-rush and the spectacular bust. We may be seeing the beginnings of something similar occurring now in the Health 2.0 [...]
September 21, 2008 at 7:44 pm
[...] Whither Health 2.0? Recent failures cast shadows… [...]