Healthcare communications and marketing news and information

Late last week, the Washington Post announced that Steve Case’s Revolution Health Network initiated discussions to merge with EveryDay Health.  According to the Post, “the new company would be one of the world’s most visited online health information networks.”  The announcement has generated interesting reactions from a range of observers, including Dmitriy Kruglyak and Matthew Holt.  Earlier this week, Kruglyak and Holt got into a bit of a public spat.  At the heart of their disagreement is whether Revolution Health’s downfall indicates that the “Health 2.0* movement” has major fundamental problems.

Kruglak argues that “Health 2.0 represents irrational exuberance around unproven healthcare ideas that do not have a sustainable business model.  The intended use of the term is to confuse and distract the listener from questioning the validity of the concept.  The term should not be used for proven projects to avoid the negative association.”  

He urged his readers to “ditch the hype and focus on proving their claims with metrics.”  

Holt quickly fired back, calling Kruglyak’s analysis “weak” and uninformed.  Rather than focusing Health 2.0 on the numerous companies that are trying to leverage a range of new technologies for profit and power, he believes it is about:

“Participatory change in how consumers/patients/citizens relate to each other, and to the health care system using new technologies.”  He rejects the argument that his upcoming Health 2.0 conference is about “hyping the creation of a standalone industry in which every new venture would be successful.”

Health 2.0’s Challenges: Hubris & Bad Business Models

My point in outlining Holt and Kruglyak’s argument is that it crystallizes two very important challenges many Health 2.0 companies face: hubris and bad business models.  John Grohol, who has been around the block a few times as creator of Psych Central, a sixteen-year-old online directory of mental health resources, had a lot to say about Revolution Health’s demise.  Grohol wondered why “only a year and a half into this grand challenge to change the U.S. healthcare system are they looking for a buyer? And, what happened to their commitment to seeing this through?”  I’ve heard a number of CEOs of health technology start-ups talk about how they are going to build the killer app that completely transforms healthcare.  When I hear this, I shake my head and think they might be biting off more than they can chew.

Regarding bad business models, Xconomy published an interesting article recently about how physician social network Sermo has signed deals with most of the world’s major pharmaceutical companies.  The company’s CEO, Daniel Palestrant, said something I am sure he will repeat to people at the Health 2.0 conference this October: “You will not pay your bills with ads by Google.”  

Hubris and bad business models are what Kruglyak focuses on when he critiques the Health 2.0 movement. I happen to think his critique is valid and would venture to guess that Holt would concur.  However, I also agree with Holt that dismissing the Health 2.0 movement because one company failed is not a good idea. 

Successful Health 2.0 Companies Will Significantly Impact Fundamental Health System Problems

I do not believe Revolution Health will be the only company in the Health 2.0 marketplace that goes the way of the dodo during the next few months.  However, I am not ready to throw the baby out with the bathwater.  Emerging media and social technologies will continue to impact healthcare because of the societal changes it has generated both in the United States and around the world.  The Health 2.0 movement will endure because the fundamentals support it.

I believe the companies that will survive over the long term will be those that successfully help to clear the four major clogged arteries feeding the failing heart of the health system.  Just as physicians must use a combination of drugs to treat heart failure, no one company-created techmed will solve the system’s many woes.  The four areas I think are in the most need of improvement are illustrated in the diagram below.  They are:

 

 

 

 

 

 

 

 

-Medical Decisions: This includes decisions about what medications physicians should prescribe and how to manage end of life care cost effectively.

-Information Sharing: Providing valuable health data and education to consumers, providers, payers and others.

-Medical Technology: Tools that help prolong lives, reduce administrative costs and meet emerging health needs.

-Funding: Ensuring scarce health resources are allocated effectively and finding ways to stop breaking the healthcare budget.

To be successful, Health 2.0 companies must find clear ways to demonstrate to established health industry players that they can make a real impact on the four major problems I outlined above.  In the long run impact, not advertising dollars will determine company survival. 

Unfortunately, my travel schedule will not permit me to attend the Health 2.0 conference this year.  However, I will watching it from afar and wish Holt and his fellow conference organizers luck.

*I must admit that I’m not a big fan of the term Health 2.0.  However, I spend a lot of time framing concepts in my marketing communications consulting work.  Given this, I think Holt did a good job helping people to quickly understand how and why emerging technologies are impacting healthcare by encouraging the broad use of the term.  I use it because it is useful.