The customer is king –but not yet the patient

The Economist has a special report this week on how the internet has empowered customers. Dell’s chief marketing officer is quoted as saying, “I am constantly amazed at the confidence level and sophistication of the average consumer.” There is tremendous technical detail and commentary available about computers and other consumer products, and customers have become savvy about their choices. According to the article, when Dell makes a price change on its website it sees an impact within one minute. Consumer oriented companies are now at the mercy of their customers.

Alas, things aren’t like that in health care. Quality data is rudimentary and spotty. For example, a $7.95 profile of my physician on HealthGrades tells where he went to school, what languages he speaks, and whether he has any malpractice judgments against him. So what? The new Hospital Compare website goes a little further with quality data on hospitals, but is limited in scope. (To be fair to the health care system, this is more information than you can easily find on accountants, lawyers, or consultants.)

Now AOL founder Steve Case has announced plans to invest $500 million of his $825 million net worth in launching a new consumer oriented health care, wellness, and resorts company, according to Business Week. Case is motivated by the death from brain cancer of his older brother, Daniel Case III.

[Case] saw for himself just how difficult it is for even the privileged to make well-informed decisions about their care. Case… is interested in [companies] that provide online data about the price and quality of doctors and those that make available electronic medical records; he’s considering everything from high-end personalized health coaching services to clinics housed in Target stores. As he says: “Health care is monumentally complex, confusing, inefficient, and inconvenient. Meanwhile it’s the biggest industry in the country, and everybody hates it.”

Case is not the first tech entrepreneur to look at health care and think he can make things better. I’m reminded of Jim Clark (of Silicon Graphics and Netscape fame) who started Healtheon amidst grandiose talk about revolutionizing health care. He ended up with a successful business formed by mergers and acquisitions, but we’re still awaiting the revolution.

April 4, 2005

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