Some thoughts on e-health from the e-Healthcare Market Reporter:
THE RISE, FALL AND SLOW RECOVERY OF e-HEALTH
-- INGREDIENTS FOR e-HEALTH SUCCESS --
A year ago, it seemed the sky was the limit for e-health ventures. Financing was flourishing, partnerships were forged and the media was abuzz. Today, the market is a lot more skeptical of the next big app. The financing "El Dorado" has all but dried up, and jobs are being cut to compensate -- not the land of milk and honey once envisioned, according to an article that appeared in the October 1 issue of "e-Healthcare Market Reporter."
So what happened? Speakers at Internet Health Care Forum 2000 in Washington, D.C., attempted to explain the rise and fall (and slow recovery) of e-healthcare, reported The Managed Care Information Center's "e-Healthcare Market Reporter" (www.themcic.com/24trial.htm).
"Being early is akin to being wrong," explained Ben Rooks, executive director of equity research, CIBC World Markets, New York City. Rooks said many companies rushed into the space without a business plan, finding the stock market a cruel place.
It's been a slow trajectory for companies to devise business models that show "traction," said Seth Frank, vice president, AG Edwards & Sons, St. Louis. And, a lot of these companies never delivered what they promised, he added.
INGREDIENTS FOR e-HEALTH SUCCESS
What a business must do is generate revenues and earnings for shareholders, Rooks said. A scary fact is a lot of e-health companies that are thinking of going public don't know how the enterprise will make money.
"Technology is great, I love technology, but the question to ask at the end of the day is how you're going to make money for your shareholders," Rooks said.
What has been missing in the e-health space, according to Frank, has been a combination of strong leadership, corporate relationships to execute a business model, and an understanding of healthcare. For example, online pharmacies hit the Internet in full force about a year and a half ago, and while it may have seemed a "no-brainer" on paper, no online pharmacy at that time had land-based relationships, or relationships with pharmacy benefit managers (PBMs).
It is important for those looking to make money in e-healthcare to understand the tried-and-true adage of quality vs. quantity -- it's quality that generates earning, said James Baker III, managing director, Sun Trust Equitable, New York City.
"[e-Health] is an awfully crowded area," Frank added. "If [your product] is so proprietary, why's everybody doing it?"
Baker agreed, adding e-health companies shouldn't hesitate to "knock off that low-hanging fruit" to focus their offering to the market. What is most important is proving you can deliver a quality service better than anyone else. |
