Profiles of E-health Businesses. 0010.Profiles of E-health Businesses.SNUH 1 E-health business...
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Profiles of E-health Businesses
Profiles of E-health Businesses. 0010.Profiles of E-health Businesses.SNUH 1 E-health business growth is being driven by the high degree of industry fragmentation,
0010.Profiles of E-health Businesses.SNUH 1 E-health business
growth is being driven by the high degree of industry
fragmentation, interaction costs and consumer/provider demand A
broad range of e-health business have emerged to facilitate
efficient interchange of content, commerce and interconnectivity
Significant opportunity exists for the development of high value
e-health businesses in Korea E-health business growth is being
driven by the high degree of industry fragmentation, interaction
costs and consumer/provider demand A broad range of e-health
business have emerged to facilitate efficient interchange of
content, commerce and interconnectivity Significant opportunity
exists for the development of high value e-health businesses in
Korea KEY MESSAGES
Slide 3
0010.Profiles of E-health Businesses.SNUH 2 Hospitals Care
centers Clinics Pharmacies Suppliers Insurers/funding bodies
DRIVING FORCES: FRAGMENTATION AND INTERACTION COST
Slide 4
0010.Profiles of E-health Businesses.SNUH 3 Continuum of care
Wellness-focus Case/Lifetime-oriented Integrated delivery networks
Capitation/casemix type payments Cost centres and prevention
incentives Focus on customer needs The recognition of opportunities
for process improvement and cost reduction is driving the
development of more integrated, consumer oriented and outcomes
focused health systems. Episodic Care Intervention Focus
Transaction-oriented Hospital/Hospital systems
Fee-for-service/global budget Revenue Centres/ intervention centres
Focus on internal needs DRIVING FORCES: FRAGMENTATION AND
INTERACTION COST
Slide 5
0010.Profiles of E-health Businesses.SNUH 4 Recognition of the
enormous growth in ability to access information Desire for greater
control/participation Increasing administrative and clinical
service quality expectations Significant take up of purchasing over
the internet DRIVING FORCES: CHANGING CONSUMER DEMANDS
Slide 6
0010.Profiles of E-health Businesses.SNUH 5 Ongoing information
needs high Patient data collection and management is arduous and
time consuming. Little information is captured as a by product of
care delivery Basic lack of integrated clinical information systems
Practice management systems demands are high for small practices
DRIVING FORCES: PROFESSIONAL INFORMATION NEEDS
Slide 7
0010.Profiles of E-health Businesses.SNUH 6 E-health business
growth is being driven by the high degree of industry
fragmentation, interaction costs and consumer/provider demand A
broad range of e-health business have emerged that facilitate
efficient interchange of content, commerce and interconnectivity
Significant opportunity exists for the development of high value
e-health businesses in Korea E-health business growth is being
driven by the high degree of industry fragmentation, interaction
costs and consumer/provider demand A broad range of e-health
business have emerged that facilitate efficient interchange of
content, commerce and interconnectivity Significant opportunity
exists for the development of high value e-health businesses in
Korea KEY MESSAGES
Slide 8
0010.Profiles of E-health Businesses.SNUH 7 Source:McKinsey
analysis Specific Description Create and aggregate content, build
communities, and offer value-added services Provide online commerce
solutions for product and service purchases Provide end-to- end
solutions and/or a combination of multiple services to various
healthcare participants Provide solutions to connect various
healthcare participants (information connectivity) Revenue model
Multiple revenue streams Advertising Sponsorships Subscriptions
Service-related fees Direct online commerce and off-line pull
Varies Mostly transaction-based revenues, also fees from
Subscriptions Licenses Services Business-to-consumer (health
products) Business-to-business Online insurance brokering Content
Commerce Customer information portals Physician/Healthcare
professional services Health plan/Hospital services Aggregate
Transaction/practice management services Online patient medical
records Online care services Connectivity Horizontal Vertical
E-HEALTH BUSINESS FRAMEWORK
Slide 9
0010.Profiles of E-health Businesses.SNUH 8 Source:McKinsey
analysis, News clippings Description Clinical information and other
health- related topics Examples OnHealth.com MayoHealth.com
iVillage.com Adam.com DrKoop.com DiscoveryHealth.com
Healthcentral.com Oxygens Thrive online E-HEALTH CONTENT: 3 MAIN
APPLICATIONS Content Customer information portals
Physician/Healthcare professional services Health plan/Hospital
services
Slide 10
0010.Profiles of E-health Businesses.SNUH 9 CONTENT CUSTOMER
INFORMATION PORTAL EXAMPLE: ONHEALTH.COM Source:Company financial
report and website, Hoovers, News clippings, Jupiter Analyst Report
9/99 Value Proposition Deep proprietary health content covering
both traditional and alternative medicines Partnerships with the
Cleveland Clinic, Mount Sinai Cardiovascular Institute, the Scripps
Clinic, the International Diabetes Center, Harvard Medical School
Resident expert columnists Traffic driven to Onhealth.com from +600
different sites Business Model Revenue primarily generated through:
Advertising/ sponsorships E-commerce transactions Premium services
Content syndication Strategic Relationships Portal: AOL Digital
Cities, Infoseek/Go, GeoCities, Planet Direct, WebTV, Weather.com,
Myway.com, Snap.com, Yahoo!, MindSpring, About.com, Ask Jeeves,
Better Homes and Gardens Commerce: drugstore.com, The Vitamin
Shoppe, Amazon.com, ProFlowers, American Greetings, WholeFoods.com,
gazoontite.com, The Green Marketplace Company Snapshot Launched:
July 1998 Ownership: Public (Nasdaq: ONHN), Acquired by
Healtheon/WebMD Industry: Healthcare online content providers
Market cap:$75.0 million 1999 Revenues:$3.8 million Other:Most
trafficked health site on the web as of 2/2000, Best Health and
Medicine Website - US News and World Report Key Issues
Differentiation on proprietary health content is subject to fierce
competition from other health content, lifestyle-sites,
women-sites, and portals Description Customer-focused content
health site targeting women aged 25 to 54 Features include: Health
information and news Interactive tools Physician directory
Community discussion groups Live interviews Drug database Online
shopping Online classes Premium services
Slide 11
0010.Profiles of E-health Businesses.SNUH 10 Source:McKinsey
analysis, News clippings Description Web-based services to simplify
and enhance information access, communications, and training for
physicians Examples Medscape.com Physicians online Stanford SHINE
Medsite.com E-HEALTH CONTENT: 3 MAIN APPLICATIONS Content Customer
information portals Physician/Healthcare professional services
Health plan/Hospital services
Slide 12
0010.Profiles of E-health Businesses.SNUH 11 CONTENT
PHYSICIAN/HEALTHCARE PROFESSIONAL SERVICES EXAMPLE: MEDSCAPE.COM
Source:Company financial report and website, Hoovers, News
clippings Description Physician-focused portal and content site
designed to educate health care professionals with reference
materials, educational programs, tools, and services Features
include: Integrated search engine to retrieve abstracts and
full-text peer reviewed clinical medicine articles from +500
leading medical publications Next-day conference summaries Medscape
General Medicine: Internets first primary source medical journal
Programs to earn CME credit Daily and weekly specialty newsletters
Personal physician websites Money & Medicine: Online financial
resource center Medscape bookstore Specialty site for medical
students Palm Docs: Downloadable Palm organizer tools and resources
Value Proposition Largest single source of articles and news on
health topics Palm Docs enables physicians to create and retrieve
information in ways that fit into their workflow Business Model
Revenue primarily generated through: Advertising and sponsorships
Market research e-commerce Member fees Strategic Relationships
Commerce: BarnesandNoble.com, Drugstore.com Connectivity: Softwatch
Content: CBS, Healthcare Communications, MSNBC, National Data
Corporation, Reuters Health Information, TMP Worldwide/Monster
Board Company Snapshot Ownership:Public (Nasdaq: MSCP), Proposed
merger with MedicaLogic Industry:Healthcare online content
providers Market cap:$145.1 million 1999 Revenues:$11.2 million
Other:Boasts 1.7 million registered members worldwide Key Issues
Proposed merger with MedicaLogic will provide key technology for
creating online health records
Slide 13
0010.Profiles of E-health Businesses.SNUH 12 Source:McKinsey
analysis, News clippings DescriptionExamples Kaiser Foundation
Health Plan Cigna Web-based services to simplify and enhance
information access and communications to hospital/health plan
members E-HEALTH CONTENT: 3 MAIN APPLICATIONS Content Customer
information portals Physician/Healthcare professional services
Health plan/Hospital services
Slide 14
0010.Profiles of E-health Businesses.SNUH 13 CONTENT HEALTH
PLAN/HOSPITAL SERVICES EXAMPLE: KAISER PERMANENTE HEALTH PLANS
Source:Company website, News clippings, Jupiter Analyst Report 9/99
Description Nonprofit, public benefit corporations that contract
with individuals and groups to arrange comprehensive medical and
hospital services. KFHP, along with Kaiser Foundation Hospitals and
the Permanente Medical Group, is a part of Kaiser Permanente
Internet features include: Online doctor appointment registration
Online prescription refill requests Advice nurse Physician
directory Medical and disease information Discussion groups Health
education classes Value Proposition Offers more member services and
features than any of its HMO/health plan competitors Business Model
Overall goal is cost control, not revenue generation Strategic
Relationships Kaiser Permanente has 8.6 million members, creating a
low-cost channel for driving adoption of services Company Snapshot
Launched: 1997 (www.kponline.org) Ownership:Nonprofit Industry:
HMO/Health plans
0010.Profiles of E-health Businesses.SNUH 15 COMMERCE
BUSINESS-TO-CONSUMER (HEALTH PRODUCTS) EXAMPLE: PLANETRX.COM
Source:Company financial report and website, Hoovers, News
clippings, Jupiter Analyst Report 9/99 Value Proposition
Convenient, 24/7 shopping with product selection that includes
+28,000 SKUs Recent alliance with ePhysician allows for doctors to
transmit prescriptions via ePhysician technology to PlanetRx
pharmacies First e-commerce site to offer scanner functionalities,
enabling customers to scan bar codes of products to purchase from
the website Business Model Revenue primarily generated through:
Sales and related shipping costs Strategic Relationships Commerce:
McKesson, HBOC, Bergen Brunswick Portal: Women.com, AOL, Netscape,
BabyCenter.com, Time, Inc., Yahoo!, iVillage Content/services: FOX,
Health Network, Healthcentral, DrugDigest.org, The American Society
of Health-System Pharmacists, AllHealth.com, Medline Company
Snapshot Launched:March 1999 Ownership:Public (Nasdaq: PLRX)
Industry:Drug and Health Product Retailers Market Cap:$195.3
million 1999 Revenues:$9 million Other:Chairmans choice recognition
award - EARL Awards 2000, excellence in online and in-store
retailing Key Issues Acquisition of YourPharmacy.com completed key
revenue strategy by becoming the exclusive online pharmacy to
Express Scripts 36 million plan members for 5 years Unlike its
competitors, PlanetRx will have to build a brand name without the
assistance of a consumer-branded partner Description Retailer of
prescription drugs, non-prescription drugs, personal care products,
beauty and spa, vitamins, herbs, nutrition, and medical supplies
Features include: Expert consultations Online communities with
direct links to disease-specific websites (e.g., diabetes.com)
Shopping lists Secure storage of customers prescription history
E-mail reminders Newsletters Drug and Interaction information
Slide 17
0010.Profiles of E-health Businesses.SNUH 16 *Company
descriptions provided in the following pages or in appendix
Source:McKinsey analysis, News clippings Description Business
trading community for healthcare products and services Examples
CimtekMedical medibuy.com* Neoforma.com* Medline.com Omnicell.com*
SciQuest.com Proposed Unnamed (J&J, GE Medical systems, Baxter
International, Abbot labs, Medtronic)* newhealthexchange.com
(AmeriSource, Cardinal Health, Fisher Scientific, McKesson HBOC,
Owens & Minor) E-HEALTH COMMERCE: 3 MAIN APPLICATIONS
Business-to-consumer (health products) Business-to-business Online
insurance brokering Commerce
Slide 18
0010.Profiles of E-health Businesses.SNUH 17 The B2B landscape
Web enabling infrastructure B2B Services Web-based business process
enabling systems PSM SCM DescriptionExamples Providers of
web-based, XML-enabled purchasing automation software Providers of
web-based, XML-enabled logistics improvement software THE B2B WEB
INFRASTRUCTURE AND SERVICES LANDSCAPE
Slide 19
0010.Profiles of E-health Businesses.SNUH 18 B2B Services
DescriptionExamples Firms facilitating management & delivery of
website content Providers of software that translate information
from an internal computer system into XML, transport it across the
internet, and finally reconfigure it into a format that can be
understood by a partners system Providers of auctioning
tools/software The B2B landscape Web enabling infrastructure
Software providers Content management Auction solutions XML-based
application- integration Web-based business process enabling
systems THE B2B WEB INFRASTRUCTURE AND SERVICES LANDSCAPE
Slide 20
0010.Profiles of E-health Businesses.SNUH 19 The B2B landscape
Web enabling infrastructure B2B Services Application service
provider/ outsourcing agents DescriptionExamples ASPs host software
and provide other services to various companies for a fee Clients
avoid cost investments Clients pay for services as needed Third
parties managing select functions in the web development process
e.g., web hosting, fulfillment, billing etc. Web-based business
process enabling systems Software providers THE B2B WEB
INFRASTRUCTURE AND SERVICES LANDSCAPE
Slide 21
0010.Profiles of E-health Businesses.SNUH 20 The B2B landscape
Web enabling infrastructure B2B Services DescriptionExamples
Tools/services to conduct real time, bulletin board, or sealed bid
auctions Auctions THE B2B WEB INFRASTRUCTURE AND SERVICES
LANDSCAPE
Slide 22
0010.Profiles of E-health Businesses.SNUH 21 The B2B landscape
Web enabling infrastructure B2B Services DescriptionExamples
Markets created by aggregating a number of suppliers and buyers
Aggregators Auctions THE B2B WEB INFRASTRUCTURE AND SERVICES
LANDSCAPE
Slide 23
0010.Profiles of E-health Businesses.SNUH 22 The B2B landscape
Web enabling infrastructure B2B Services DescriptionExamples Online
market making by matching buy and sell orders between multiple
suppliers and buyers Exchanges Aggregators Auctions THE B2B WEB
INFRASTRUCTURE AND SERVICES LANDSCAPE
Slide 24
0010.Profiles of E-health Businesses.SNUH 23 The B2B landscape
Web enabling infrastructure B2B Services DescriptionExamples
Community of interest focused on vertical industry segments
providing a forum for information sharing, news, and creating
exchanges Communities Aggregators Auctions Exchanges THE B2B WEB
INFRASTRUCTURE AND SERVICES LANDSCAPE
Slide 25
0010.Profiles of E-health Businesses.SNUH 24 Opportunity for
valueDrivers Reduce interaction/ process costs Order processing
Sales, marketing, and customer service Buyer search/purchasing
Standardize IT and business processes Reduce supply chain costs
Optimize Lean inventory management Reduction in errors/rework
Enhanced production planning/yields More efficient distribution
Increase market efficiency Broad product/price information on
availability, control over unauthorized buying New market-making
mechanisms, e.g., exchanges reverse auctions, demand aggregation
Increase revenue Increase value capture from current customers
Reach new customers Enable new products/services 1 1 2 2 3 3 4 4
THERE ARE ACTUALLY FOUR DIFFERENT SOURCES OF VALUE IN B2B
COMMERCE
Slide 26
0010.Profiles of E-health Businesses.SNUH 25 Percent
Source:McKinsey estimates Cost of purchased materials and services
100% = Total costs Electronics Mini computers/PC Vehicles Refinery/
energy Other commodities Financial institutions Service industry
Pharmacy 80-85 80 75-80 70 30 50-60 50 40 85 60 THE PORTION OF RAW
MATERIALS AND SERVICE PURCHASE IN TOTAL COSTS
Slide 27
0010.Profiles of E-health Businesses.SNUH 26
CommoditiesSpecialties Standardized products Many suppliers Grey
zone products Tightly specified products Few suppliers MANY
DIFFERENT TYPES OF PRODUCTS ARE TYPICALLY PURCHASED BY A
COMPANY
Slide 28
0010.Profiles of E-health Businesses.SNUH 27 Frequent Spot
decisions Immediate needs Many purchasers Online bidding to
negotiate contract Strategic negotiation with suppliers Catalog
sites Aggregation tool Exchanges Catalog sites Aggregation tool
Exchanges CommoditiesSpecialties Standardized products Many
suppliers Grey zone products Tightly specified products Few
suppliers DIFFERENT PURCHASING SOLUTIONS AND METHODS REQUIRED FOR
DIFFERENT PRODUCT TYPES - TYPICAL OVERALL SAVINGS 25-30%
Slide 29
0010.Profiles of E-health Businesses.SNUH 28 COMMERCE
BUSINESS-TO-BUSINESS EXAMPLE: NEOFORMA.COM Source:Company financial
report and website, Hoovers, News clippings Description Provides
B2B e-commerce services for medical products, supplies, and
equipment Features include: Shop: 400,00- product listings from
13,000 suppliers across 10,000 categories; users can send e-mail
RFQs Auction: Online and live auctions, appraisals, and liquidation
of >1,000 items of used, refurbished, and surplus equipment
Planning: Allows users to design a facility online - provides
shopping list to address complexity and 3-D tour to visualize plan
Information: Regulatory library, trade, and customer resources,
news personalized by specialty external links Career: Job search
and posting Value Proposition Multi-supplier marketplace for health
care professionals (purchasing managers, administration, doctors)
Buyer enablement focus, managing shopping lists track buyer
behavior to allow repeat one-click ordering Business Model Revenue
primarily generated through: Listing and transaction fees charged
to suppliers for confirmed orders from shop Commission from online
auctions Strategic Relationships Partnering with SAP to integrate
into mySAP.com marketplace - provides seamless link from SAP
back-end to Neoforma Partnered with Healtheon, MD On-Line.com,
ECRI, University of Chicagos Duchossois Center for Advanced
Medicine, and World Telehealth Purchased auction company, General
Asset Recovery (8/99), to provide brick-and-mortar auctions Company
Snapshot Ownership:Public (Nasdaq: NEOF) Industry:Medical Products
Distribution Market Cap:$485.8 million 1999 Revenues:$1 million
Other:Announced merger with Eclipsys Corporation (provider of
end-to-end health care information solutions) and HEALTHvision
(provider of Web-based solutions to health care organizations),
3/2000 Key Issues The medical products marketplace is highly
fragmented, and estimated to be worth $140 million Merger created
exclusive 10-year deal with Novation LLC (product buying consortium
for 6,500 hospitals worldwide) giving Neoforma.com access to 1/3 of
all US hospitals Lack of investor confidence over the recent
announcement of planned acquisition of Eclipsys plummeted
Neoforma.com share prices J&J/GE Medical Systems announcement
over global health care exchange venture is troubling because GE
Medical Systems is a venture investor in Neoforma.com
Slide 30
0010.Profiles of E-health Businesses.SNUH 29 Source:McKinsey
analysis, News clippings Description Online selling of health
insurance Examples eHealthInsurance.com Channelpoint.com
Healthaxis.com E-HEALTH COMMERCE: 3 MAIN APPLICATIONS
Business-to-consumer (health products) Business-to-business Online
insurance brokering Commerce
Slide 31
0010.Profiles of E-health Businesses.SNUH 30 B3. COMMERCE
ONLINE INSURANCE BROKER EXAMPLE: HEALTHAXIS.COM Source:Company
website, News clippings Description Provides internet solutions for
health care insurance marketing, sales, and payor connectivity;
end-to-end solutions for the health insurance industry Features
include: Customer Services: online platform, allowing customers to
shop for, buy, and service health care plans Applications
Solutions: Web-based software applications for transaction
processing, internet enrollment, online access to plan and claims
data, technology infrastructure management, and data capturing
services Value Proposition Only e-health care company servicing
both the consumer and B2B marketplaces Company Snapshot
Ownership:Public (Nasdaq: HAXS) Market Cap:$74.4 million 1999
Revenues:$77.5 Industry:Online health insurance Strategic
Relationships Carrier Partners: Aetna US Healthcare, Blue Cross,
Celtic, Fortis, Peoples Benefit, Provident, Security Life Insurance
Network Partners: First Health, CAREington, PCS Health Systems,
Prudent Buyer PPO, Private HealthCare System Affinity Partners:
AOL, Lycos, CNET, Snap!, 98point6, SPAN, PersonalMD, NCA,
Insurance.com, Care City, DOCSDepot.com, USA Rewards, Ask the
Doctors, BizOffice.com, Student Advantage Business Model Revenue
primarily generated through: Commission
Slide 32
0010.Profiles of E-health Businesses.SNUH 31 Connect providers
and consumers with healthcare organizations, including payors,
hospitals, laboratories, and pharmacies CareInsite.com
Claimsnet.com cybear cymedix Allscripts proxymed.com
Source:McKinsey analysis DescriptionExamples E-HEALTH CONNECTIVITY:
3 MAIN APPLICATIONS Transaction/practice management services Online
patient medical records Online care services Connectivity
Slide 33
0010.Profiles of E-health Businesses.SNUH 32 CONNECTIVITY
TRANSACTION PRACTICE MANAGEMENT SERVICES EXAMPLE: CAREINSITE.COM
Key Issues CareInsite has the right payor-focused model and a
strong management team Potential significant competition on the
horizon with payors currently developing a competing consortium
CareInsite needs to aggressively develop a substantial customer
base Source:Company financial report and website, Hoovers, News
clippings Description Provides health care network and e-commerce
services to enable the exchange of clinical, administrative, and
financial information among physicians and their patients, and
affiliated health plans, providers, and suppliers Services include:
Transaction RxInsite: prescription communication Laboratory
communication Managed care communication: claims, eligibility,
referral and pre- certification authorization Content Messaging
Value Proposition Integration of payor-specific benefit rules and
guidelines with patient- specific information at the point of care
serves to control costs and improve health care quality Extensive
management experience in clinical process automation, health care
transaction processing, and benefit management System built with
existing, well-proven software and system interfaces (licensed
Cerner technology) Business Model Revenue primarily generated
through: Sales and implementation services Company Snapshot
Launched:February 1999 Ownership:Public (Nasdaq: CARI)
Industry:Medical Practice Management and Services Market Cap:$1.8
billion 1999 Revenues:$1.4 million Other:Medical Manager
Corporation, which was purchased by Healtheon/WebMD, owns 69%
Strategic Relationships THINC Cerner Horizon Blue Cross Blue Shield
AOL
Slide 34
0010.Profiles of E-health Businesses.SNUH 33 Aggregate medical
information from various sources to rebuild patient medical records
MedicaLogic.com HealthMagic.com WellMed MedicalRecord.com
PersonalMD.com Healinx.com Source:McKinsey analysis
DescriptionExamples E-HEALTH CONNECTIVITY: 3 MAIN APPLICATIONS
Transaction/practice management services Online patient medical
records Online care services Connectivity
Slide 35
0010.Profiles of E-health Businesses.SNUH 34 CONNECTIVITY
ONLINE PATIENT MEDICAL RECORD EXAMPLE: MEDICALOGIC.COM Key Issues
AboutMyHealth.net is still in beta test mode Needs to quickly and
aggressively expand its physician base in order to expand its
customer base Source:Company financial report and website, Hoovers,
News clippings, Jupiter Analyst Report 9/99 Description Provides
web-based storage and management of medical records, as well as
related products and services Products and services include:
Electronic medical records for physicians (Logician) Personal
health portfolio for consumers through AboutMyHealth.net
Health-related content and e-commerce Internet health record for
integration of physicians electronic medical records and consumers
personal health portfolio Value Proposition E-health care products
connect patients and physicians in a way that enhances quality,
delivery, and cost-effectiveness Business Model Revenue primarily
generated through: Advertising and sponsorship through
AboutMyHealth.net Prepaid licensing and monthly fees from
physicians Strategic Relationships Alliances: LabCorp, to directly
link lab results and corresponding EMRs, CVS.com, drugstore.com,
PlanetRx.com, Envoy Content: HealthGate Customers: Baylor College
of Medicine, Providence Health System, Oregon Health Sciences
University, VHA, Wake Forest Baptist Medical Center Company
Snapshot Ownership:Public (Nasdaq: MDLI) Industry:Healthcare online
content provider Market cap:$415.5 million 1999 Revenues:$19.7
million Other:Proposed merger with Medscape (Nasdaq: MSCP)
Slide 36
0010.Profiles of E-health Businesses.SNUH 35 Online
consultations and Internet-enabled telemedicine services to
customers iPhysicianNet.com Medwired HealthHero.com Alere.com
Source:McKinsey analysis DescriptionExamples E-HEALTH CONNECTIVITY:
3 MAIN APPLICATIONS Transaction/practice management services Online
patient medical records Online care services Connectivity
Slide 37
0010.Profiles of E-health Businesses.SNUH 36 Source:Company
website, News clippings Description iPhysicianNet establishes a
physical and internet-enabled electronic presence in physicians
private offices, enhancing communication between pharmaceutical
companies and physicians Products and features include:
Interactive, real-time PC-based videoconferencing system
e-Detailing: real-time detailing, allowing pharmaceutical company
sales reps to communicate directly with physicians in their private
offices High speed telecommunications lines Value Proposition
Provides a cost-effective and efficient e-commerce communication
channel between the pharmaceutical company and other health care
professionals Using iPhysicianNet.com can result in a five-fold
increase in the number of effective detail calls by a
pharmaceutical representative Business Model Revenue primarily
generated through: Services Strategic Relationships Connectivity:
Hitachi Data Systems, x-ChangeMag.com, Axolotl, Rhythms
NetConnections Customers: GlaxoWellcome Company Snapshot
Ownership:Currently private, IPO filed Feb 2000
Industry:Internet-enabled health care services Key Issues
Considering expansion into onsite medical conferencing, remote peer
consultations, and other conferencing services CONNECTIVITY ONLINE
CARE SERVICES EXAMPLE: iPHYSICIANET.COM
Slide 38
0010.Profiles of E-health Businesses.SNUH 37 Source:Company
website, News clippings CONNECTIVITY OTHER EMERGING AREAS Private
online education Patient communities Virtual personal clinics Home
testing/monitoring Teleradiology Telepathology Telepsychiatry
Private online education Patient communities Virtual personal
clinics Home testing/monitoring Teleradiology Telepathology
Telepsychiatry Broadband access and new voice and video over IP
technologies will enable telemedicine and other virtual
healthservice growth.
Slide 39
0010.Profiles of E-health Businesses.SNUH 38 Source:McKinsey
analysis, News clippings Description Provide end-to-end solutions
or combination of multiple services to various healthcare industry
Examples Ventro.com E-HEALTH AGGREGATOR: 2 MAIN APPLICATIONS
Aggregate Horizontal Vertical
Slide 40
0010.Profiles of E-health Businesses.SNUH 39 HORIZONTAL
AGGREGATOR EXAMPLE: VENTRO.COM Source:Company financial report and
website, Hoovers, News clippings Description Builder and operator
of vertical B2B e-commerce marketplace companies; Purchases
products from suppliers and resells them to customers
Products/services include advanced search engines, transaction
software, and systems integration capabilities Health care-related
companies: Promedix: customers purchase products from medical
product manufacturers with a single purchase order; 500 specialty
suppliers represent over 325,000 SKUs Broadlane: high volume
hospital and medical supplies, still in the development phase Value
Proposition Different approach to e-commerce, focusing on
end-to-end solutions tied to hospital ERP systems, rather than just
a website making ordering and inventory management more efficient
Lower sales and marketing costs, as well as improved inventory
management and product delivery for suppliers Streamline business
processes, increase productivity, and reduce costs throughout the
supply chain Business Model Revenue primarily generated through:
Resale of products Commission from sales Strategic Relationships
(for Broadlane and Promedix) Tenet Healthcare/ Buypower (JV to form
Broadlane, exclusive purchasing agreement with Promedix)
Connectivity: VWR, Commerce One, Concur Technologies, IBM, Ariba,
SAP Recently acquired SpecialtyMD.com Company Snapshot
Ownership:Public (Nasdaq: VNTR), Formerly Chemdex Corporation
Industry:Multi-sector internet marketplace companies Market
cap:$1.1 billion 1999 Revenues:$30.8 million Other:Ventro is the
parent company to 5 online companies - Chemdex (specialty chemicals
in life sciences), Amphire (food services), Promedix (specialty
medical items), Broadlane (health care supplies), and Industria
(process-plant supplies) Key Issues Strong management team Key to
success will be to rapidly expand hospital/ GPO base. However,
hospitals and GPOs may be reluctant to share pricing Critics say
that Ventro focuses too much on back-end solutions, thereby
underselling the importance of front-end features Market is waiting
for Ventro to prove its model
Slide 41
0010.Profiles of E-health Businesses.SNUH 40 Source:McKinsey
analysis, News clippings Description Provide end-to-end solutions
or combination of multiple services across the healthcare industry
Examples Healtheon.com E-HEALTH AGGREGATOR: 2 MAIN APPLICATIONS
Aggregate Horizontal Vertical
Slide 42
0010.Profiles of E-health Businesses.SNUH 41 VERTICAL
AGGREGATOR EXAMPLE: HEALTHEON / WEBMD.COM Key Issues
Healtheon/WebMD has a first-mover advantage, an attractive service-
based business model, an experienced management team, and key
strategic partners Substantial increased competition has been posed
by established technology companies and fast internet start-ups
Execution is in question, due to the rapid acquisition of different
immature and untested business models Dependent on a few major
partners and customers for large percentage of revenues
Source:Company financial report and website, Hoovers, News
clippings, Goldman Sachs Description Healtheon:Uses an
internet-based information and transaction platform to create
Virtual Healthcare Networks (VHNs) that facilitate and streamline
interactions among participants in the healthcare industry (i.e.,
providers, payors, employers, laboratories, pharmacies, patients)
Services include enrollment and eligibility determination,
referrals and authorizations, laboratory and diagnostic test
ordering, clinical data retrieval and claims processing WebMD:
Provides physicians with administrative transaction services,
medical new s and research, CME credit, customized web sites and e-
mail accounts, and career services (WebMD Practice). Provides
customers with free health and wellness news and information,
support communities, interactive tools, and online shopping (WebMD
Health) Value Proposition Community for physicians, health care
professionals, and consumers Offers both information exchange as
well as support for complex transactions for disparate participants
across geographic boundaries Offers freedom from expensive
proprietary systems and technology Business Model Revenue primarily
generated through: Non-internet, network- based transaction
services, development, consulting, and IT management services
Software licensing fees Advertising Subscription fees Strategic
Relationships Recently acquired Kinetra, pending acquisition of
Medical Manager and CareInsite, OnHealth.com See attached pages
Company Snapshot Integrated website launched:Nov 1999
Ownership:Public (Nasdaq: HLTH) Industry:Vertical Internet
solutions, Internet and Intranet Software Services, Healthcare
online content Provider Market cap:$3.5 billion 1999
Revenues:$102.1 million
Slide 43
0010.Profiles of E-health Businesses.SNUH 42 *First quarter,
2000 Source:McKinsey analysis, Hoovers Market cap (in $100
millions) 12356789102035 N/A MARKET CAP RANGES FOR VARIOUS E-HEALTH
BUSINESS APPLICATIONS* Specific Business-to-consumer (health
products) Business-to-business Online insurance brokering Content
Commerce Customer information portals Physician/Healthcare
professional services Health plan/Hospital services Aggregate
Transaction/practice management services Online patient medical
records Online care services Connectivity Horizontal Vertical
4
Slide 44
0010.Profiles of E-health Businesses.SNUH 43 E-health business
growth has been driven by the high degree of industry
fragmentation, interaction costs and consumer/provider demand A
broad range of e-health business have emerged that facilitate
efficient interchange of content, commerce and interconnectivity
Significant opportunity exists for the development of high value
e-health businesses in Korea E-health business growth has been
driven by the high degree of industry fragmentation, interaction
costs and consumer/provider demand A broad range of e-health
business have emerged that facilitate efficient interchange of
content, commerce and interconnectivity Significant opportunity
exists for the development of high value e-health businesses in
Korea KEY MESSAGES
Slide 45
0010.Profiles of E-health Businesses.SNUH 44 Source:McKinsey
analysis, Websites, News clippings Select Companies / websites
HealthOK, DrCyber, Crezio, Medion, Doctor21, Webhospital,
Healthcare, Healthpia, InternetPost, HealthInfo, HealthKorea,
DoctorKorea emedicals Carecamp Concentration of e-health activity
Kimsonline, MediGate, Opendoctors, MediKorea, Medipark*, Mdhouse,
MediNPharm CURRENT E-HEALTH COMPANIES IN KOREA Specific
Business-to-consumer (health products) Business-to-business Online
insurance brokering Content Commerce Customer information portals
Physician/Healthcare professional services Health plan/Hospital
services Aggregate Transaction/practice management services Online
patient medical records Online care services Connectivity
Horizontal Vertical
Slide 46
0010.Profiles of E-health Businesses.SNUH 45 E-HEALTH OFFERINGS
BY SELECTIVE HOSPITALS AND MEDICAL CENTERS IN KOREA Source:Websites
Hospital/Medical center Kyungpook University Medical Center
Hospital/Medical center Service Information Reservatio n Services
Health Informatio n Patient Queries Information and services
offered Kangnung Hospital, Asan Foundation Kangnam Sungshim
Hospital, Hallym University Medical center Kyunghee University
Medical Center Ahnam Hospital, Korea University Medical Center
Severance Hospital Ghil Hospital, Ghachun Medical University Asan
Medical Center Samsung Medical Center Kangnam St. Marys Hospital,
The Catholic University Medical Center Hanyang University Medical
Center
Slide 47
0010.Profiles of E-health Businesses.SNUH 46 CONTENT CUSTOMER
INFORMATION PORTAL EXAMPLE: HEALTHOK.CO.KR Source:Company website,
News clippings Business Model Revenue primarily generated through:
Advertisement Membership Commission from commerce Online marketing
Sales (e.g., through providing internet solutions for pharmacies)
Strategic Relationships Connectivity: Oracle, Netro21 Content:
Mediservice, Korea Vitamin Information Center, Roche Korea, Cell
Biotech Customers: OnnuriHealth (drugstore chain) Company Snapshot
Launched: 1/2000 Ownership: SK Corporation Industry: Online
healthcare content provider Other:HealthOK is a part of the
OKcashbag business by SK Corp Key Issues HealthOK, along with
PharmOK, are currently SK Corps main e-health businesses
Description Customer-focused health care information Features
include: OK Clinic: Information regarding symptoms and treatment
for ~140 diseases and illnesses; online health care professionals
answer patient queries Healthmall Ask the pharmacist Specific
health-related topics (e.g., diabetes, vitamins) Healthfinder:
Provides links ~1,800 health care-related sites Clinic and pharmacy
directories CyberER Post office
Slide 48
0010.Profiles of E-health Businesses.SNUH 47 CONTENT
PHYSICIAN/HEALTHCARE PROFESSIONAL SERVICES EXAMPLE: MEDIPARK.COM
Source:Company website, News clippings Value Proposition One-stop
internet services for physicians and other health care
professionals Provides the latest medical information Provides
links to relevant academic associations Business Model Revenue
primarily generated through: Advertisement Management/ operations
contracts Strategic Relationships Connectivity: Onnet Content and
connectivity: 16 medical professional associations Company Snapshot
Launched: 3/2000 Ownership: M2 Community Industry: Online
healthcare content provider Other: Medipark is a spin-off business
of Medison (Korean medical device manufacturer); Majority investors
include Medison, Medidas, Onnet, Terasource Venture Capital Key
Issues Company admits that the business model of Medipark.com is
not to generate revenue but to create substantial network of
physicians which can be used for other businesses Description
Information portal for physicians and other healthcare
professionals Features include: Online library Training, lectures,
and conferences Personal member websites E-mail services Customized
news Cyber communities
Slide 49
0010.Profiles of E-health Businesses.SNUH 48 COMMERCE
BUSINESS-TO-BUSINESS EXAMPLE: eMEDICALS.CO.KR Source:Company
website, News clippings Description Medical product distributions
and clinical testing service for small, mid- sized hospitals
Features include: Product purchasing Inventory management
Management analysis Automatic ordering Electronic settlement Online
laboratory tests Strategic Relationships Connectivity: Bit
Computer, Brain Consulting, Medidas, SCL Exclusive contract with 3M
Korea SK Global sponsors MediGate, the online doctors community
Company Snapshot Announced:12/99 Ownership:SK Global
Industry:Medical products distribution Value Proposition High
quality medical products at lower price enabled by integrating
telecommunication technology and distribution network Guaranteed
quality product/outcome backed by highly recognized SK brand
Efficient process management through proprietary program which can
be installed to any existing system Possible delivery of products
within 24 hours Business Model Revenue primarily generated through:
Commission from sales Advertisements Key Issues Catalog information
available through website, but customers are required to use
proprietary software for services Business is still in the nascent
stage of development Currently limited offering with only one
manufacturer per product
Slide 50
0010.Profiles of E-health Businesses.SNUH 49 Value Proposition
High quality medical supplies at lower prices Business Model
Revenue primarily generated through: Advertising Commission
Membership fees VERTICAL AGGREGATOR EXAMPLE: CARECAMP.COM
Source:Company website, News clippings Strategic Relationships
Samsung Corporation, Unitel, Medimedia, Medicamp, Gil Medical
Center, Soonchunhyang University Hospital, Hallym University
Medical Center, Cha General Hospital, Paik Hospital GE Medical,
Medimedia Korea (Vivendi) Company Snapshot Launched: 4/2000
Ownership:Currently private Industry:Vertical Internet Solutions
Other:Majority investor is Samsung Corporation with 53%;
carecamp.com owns 50% of Medipharm (chain of 1300 drugstores) Key
Issues Business is still under development Description Provides B2B
e-commerce solutions, as well as health and disease information for
physicians Proposed features include: E-marketplace: provides
opportunity for hospitals, drugstores, medical wholesalers, and
retailers to purchase and sell medical equipment and supplies
through auctions Telemedicine: online care services linking members
and cyber doctors Cyber hospital: health and disease information
accessible to members, physician communities Online shopping:
health products and beauty supplies
Slide 51
0010.Profiles of E-health Businesses.SNUH 50 Extensive
opportunities exist for E-health commerce and connectivity business
in Korea The focus of commerce and connectivity activity should be
directed to high value areas, particularly those reducing
fragmentation and interaction cost Hospitals/clinics should
actively explore concortia opportunities that drive mutual benefit
rather than developping me-too solutions Extensive opportunities
exist for E-health commerce and connectivity business in Korea The
focus of commerce and connectivity activity should be directed to
high value areas, particularly those reducing fragmentation and
interaction cost Hospitals/clinics should actively explore
concortia opportunities that drive mutual benefit rather than
developping me-too solutions CONCLUSION